7 emerging trends that might re-shape how business is done in East Africa

COVID-19 completely flipped the script for businesses in Africa and across the globe. Although many businesses currently operating might already have plans in place to survive the changes that came about, good business leaders need to look at ways of staying in business.

There has therefore never been a better – or more important – time for businesses in East Africa to consider pivoting their model, offerings or services to suit the changing shifts in consumer behavior.

This article looks at 7 emerging business trends during this period that are expected to outlast the pandemic and could alter businesses – for the better.

1.       Remote Working

Remote working has been growing as a trend for some time but the Covid-19 pandemic has proven to employers of desk-based workers that working from home (or anywhere) can be done. It may even make people more efficient and productive. The realisation has been so profound that many firms, both large and small, might be getting rid of their offices completely.

In addition, with the popularity of online shopping, the prevalence of social media use, the implementation of 4G and possibly 5G networks, and the increasingly sophisticated computers available on the market, it seems that having a commercial space is no longer a requirement for building a thriving company. Businesses can easily facilitate transactions from the comfort of their own home or virtually anywhere in the world.

It does come with its own challenges though. Employees would have to be well equipped for these remote working conditions and would probably have to invest in desks, office chairs and reliable internet access. And then there is the question of productivity and consistency.

One more change that we could expect to become more permanent, is more flexible work schedules. This is due to parents who must also keep an eye on their children while working from home, making it more challenging to work according to traditional office hours. A flexible work schedule is a logical step when combined with an increase in the number of employees working from home.

2.       The role of technology has grown in businesses

One aspect that is sure to play a larger role in business, is technology. While many people that have avoided the use of technology in the past are now being forced to learn and make use of available tools during the pandemic. The number of meetings held on electronic platforms at the start of the pandemic has grown with leaps and bounds. Following this huge increase in virtual meetings, many businesses have made good use of the opportunity to host online conferences.

The fact that it allows for a much larger audience and can be broadcasted worldwide, has boosted its popularity. Attending e-conferences in the future might become the new normal and business travel as we knew it could be a thing of the past.

Automation is also likely to be accelerated where possible to reduce the risk of spreading diseases through employees. For years, businesses have been working toward automating repetitive jobs through algorithms, machines and possibly robots and researchers have found out that this kind of automation is easier to implement during economic downturns.

As a consequence of the current circumstances, companies might automate much faster. This is not necessarily good news as automation could also spell disaster to a number of jobs.

3.       A permanent switch to cashless payments

Most East African countries were already on their way to becoming a cashless society through mobile money. The pandemic and social distancing have led to an even more widespread adoption of cashless payments.

When the pandemic began, cash had already been on the decline in some East African countries such as Kenya where many were preferring to use Mpesa or Airtel Money to pay for goods. COVID-19 has accelerated this move away from cash. Wariness of microbe-ridden banknotes has seen contactless payment become a spontaneous public health standard.

A key advantage of cashless payment is that individuals have records of every transaction which can be useful. But information about a user’s own behaviour never truly belongs to them. And, as author and scholar Shoshana Zuboff notes in her work on surveillance capitalism, the suppression of privacy is at the heart of this business model with a built-in tendency to test the limits of what is socially and legally acceptable in terms of data collection.

4.       A (bigger) push for online services

With national isolation measures leading to consumers spending more time at home, it’s unsurprising that e-commerce has experienced a significant bump. Recent data shows that sectors such as online retail, and food home delivery have soared despite a general decline in discretionary spending.

But this isn’t necessarily all due to COVID-19, say experts; rather than being the direct result of reduced face-to-face dealings, it’s more indicative of a growing appetite for shopping online. For a significant portion of time, potential consumers are now glued to their phones. People clock in around three hours a day on average on their phones according to a recent study published in the journal Human-Computer Interaction. Further people check their mobile phones about 58 times a day.

Companies that are flexible in their future offerings, especially with the integration of online sales and services, are expected to fare far better post-coronavirus.

5.       The Gig Economy

The global gig economy is currently sized at $193 billion and it is growing at a projected annual rate of 17.4% according to a Mastercard study on Digital Divide in East Africa. By the end of 2023, it is forecasted to be worth $455 billion. It includes 40.7 million freelancers on digital platforms across the globe, generating $193 billion in gross volume and $127 billion in disbursements to freelancers.

More freelancers are entering the gig economy sectors such as uber and safe boda, professional services, handmade goods and household services. This is likely to accelerate worker participation and financial growth in this sector. By 2023, the number of freelancers and gross volume are expected to grow by 12% and 17% respectively.

In the context of East Africa, gig work acts as a buffer against unemployment. It facilitates youth participation in economic opportunities. Flexi-work opportunities open doors for entrepreneurship. Improved livelihoods are a direct result of access to frequent gigs, which may provide stable incomes.

6.       Younger Entrepreneurs

Covid 19 has created economic conditions that have made it hard for Millennials to find good-paying jobs. So, many are seeking non-traditional career paths like going into business and becoming “survival entrepreneurs”.

These “survival entrepreneurs” of tomorrow will be younger than ever and as history shows, this kind of entrepreneurship is more durable than startups created by entrepreneurs who are affluent and have good PowerPoints.

7.       More Specialized Business Training

The new normal is becoming a permanent part of the way we conduct business. This means that people will have to upskill in order to adapt to a changing world. We will likely see a rise in novel job titles. It can also be expected that employers will start to train their employees in aspects relating to online meetings – think proper code of conduct.

This trend is likely going to continue for the forseable future. According to recent analytics statistics, more and more companies will demand data-driven decision-making. Many will ask for online specialised courses such as managing remote teams or how scaling ventures work.

WHAT DOES THESE TRENDS MEAN FOR YOUR BUSINESS

During this time, we have heard many people saying: “This too shall pass”. The answer to the pandemic might lie in a vaccine yet to be discovered or it could be through the ‘herd immunity’ strategy that many health experts refer to.

Two general groups of consumers can be identified based on how the pandemic affects livelihoods. Firstly, we have those who have lost their jobs or now earn smaller salaries. It is estimated that between one and three million people will lose their jobs during the current period. This will cause an increase in the demand for more affordable products. In addition, African economies are expected to shrink by between 6 and 10%, which will only exacerbate the situation for cash-strapped consumers.

The other group of consumers are those who feel that they have more disposable income due to increased opportunities. These group is now able to pay more attention to luxury products and their health. This increases demand for niche products for these consumers.

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