Kenya’s 13 Biggest Digital Trends Of The Past Decade
The past decade in Kenya has been one of massive paradigm shifts where digital trends are concerned and to a large extent, the mobile phone is has been a key driver. Mobile sits at the epicenter of many of these seismic scale shifts that have progressively transformed how consumers, businesses, and even government operates across the board. Mobile, it seems, is everything digital in Kenya, and beyond. To be more precise, below is a list of the 13 biggest digital trends in Kenya during the past decade:
The Exponential Rise of Mobile Money Disrupted Financial Services
No one is quite sure how or why this happened but Kenya is unquestionably the leading global market where mobile money is concerned, thanks to the runaway success of Safaricom’s M-Pesa. One just has to look at their M-Pesa statements to see how transactions ebb and flow through their M-Pesa accounts for a myriad of all sorts of lifestyle essentials. The truth of the matter is that most of Kenya’s banked and unbanked use M-Pesa as their de facto means for paying for anything and everything, online and offline, all the time.
The numbers do not lie. As of the Communications Authority’s latest quarterly statistics report for Q1 2019 – 2020 covering the period July to September 2019, Kenya has 32.63 million mobile money subscribers. That’s simply massive given that Kenya has a population of approximately 50 million, suggesting a penetration of more than 65%. Indeed, much of Safaricom’s market leadership at this juncture can be attributed to M-Pesa which creates a ‘lock-in’ effect for most of their subscribers.
In the last decade, mobile money has also become a key enabler of the digital economy in Kenya. Indeed, the majority of e-commerce transactions are done via M-Pesa transactions, ahead of debit or credit cards. We also use M-Pesa to fund credit and debit cards, as well as offline transactions that traditionally would have been done in cash. Indeed, banks had to go beyond their traditional mainstays as the biggest casualties of the M-Pesa tsunami and re-jigged their value propositions to stay relevant to consumers and businesses. Disruption happens.
A special mention needs to be given to the rise of fintech mobile apps that lend money via M-Pesa to consumers and businesses in Kenya. Mobile apps such as OKash, Tala, Branch and others are all underpinned by their use of M-Pesa to disburse loans and also to receive repayments. Many of these apps use a credit scoring algorithm that uses non-traditional models to determine if the loan applicant qualifies for a loan or not, usually in a matter of seconds, using first and third-party data sources. This has been massively disruptive in Kenya’s financial services sector and has seen banks like Barclays Bank and Equity Bank scrambling to create competitive offerings to remain relevant in the marketplace.
Smartphones Became Affordable, Powerful and Ubiquitous
At the start of the decade, having a smartphone in Kenya made you one of the ‘digital elite’ in terms of using a mobile phone that cost a fortune compared to the majority of feature phones available back in 2010. At the time, the market was dominated by Nokia’s Symbian smartphones and to some extent Samsung who had just launched its Galaxy range of Android-powered smartphones. It was the early days and mobile apps were only starting to gain traction.
A year later, a landmark moment was when Huawei launched its IDEOS smartphone in Kenya in conjunction with Safaricom at an unprecedented price of only Kes. 8,500.00! This was the smartphone that was affordable for the masses and boy did it sell like hotcakes! Over 400,000 units sold and this was the tipping point in terms of smartphones starting to outsell feature phones at scale in Kenya.
During the last few years, we saw the arrival of even more affordable smartphones like Safaricom’s NEON range that retails for as little as Kes. 3,500.00 (brand new) with some free data thrown in for good measure – imagine that! Therefore, as a result, we now have smartphones that are even more inexpensive than some feature phones and we also have mid-range smartphones that feature-for-feature are almost on par with the latest high-end iPhones and Androids.
One of the biggest transitions of the last decade where smartphones are concerned in Kenya is that Transsion Group through their mobile brands like Tecno, Itel and Infinix is now the largest mobile device manufacterer in Kenya ahead of the likes of Nokia and Samsung. How things change so rapidly in a market that was once clearly one of the most important in Africa for Nokia.
Mobile Apps Became The Launchpad To The Kenyan Digital Lifestyle
Thanks to the rise of smartphones in Kenya, we now live our digital lives out via the myriad mobile apps running on our smartphones. Many of us use a mobile app for nearly every conceivable use case to enable our digitally powered lifestyles. If you need to bank, there’s an app for that, if you need to be entertained, there is an app for that, if you need a mobile loan, there’s an app for that, if you need to connect socially, there’s an app for that. The list goes on and on, whether its Glovo, Sendy, Uber, Tala, OKash , Branch or Opera Mini, we have an app for everything.
In the early part of the decade, mobile apps that had been developed by global brands, mostly from silicon valley, dominated the smartphone ecosystems. However, since then, we have seen a proliferation of mobile apps from every corner of the planet and increasingly we are seeing local mobile apps that cater to a unique Kenyan digital consumer experience. Safaricom took notice and launched an M-Pesa API that enabled local and international mobile developers to integrate payments to the M-Pesa platform. This has been a gamechanger.
The reality is that mobile apps have transformed the digital consumer experience in Kenya to such an extent that every major brand operating Kenya either has an app or is in the process of implementing. However, the irony of mobile apps is that less than 5% of them ever become commercially on a global basis so it can be something of lots of misses for every hit? That’s not deterring anyone and the apps will keep coming in Kenya even if they are not ultimately successful – it’s too big an opportunity to not try when pretty much every Kenyan today has a smartphone.
Sports Betting Via Mobile Platforms Exploded
In 2014 sports betting in Kenya took off with a bang thanks to SportPesa (initially) and closely followed by the likes of Betin, mCheza, Betika, etc. Until that point, the majority of sports betting in the country happened via traditional betting shops using a conventional approach. This all changed when SportPesa launched a mobile-based sports betting offering that utilized mobile money to fund bets and pay out winnings via USSD and SMS user interfaces. This enabled everyone who had a smartphone or feature phone, to place bets, to win or lose, with nearly instantaneous results from a financial perspective, thanks to mobile money.
Almost 6 years later, it’s clear that sports betting is well entrenched in Kenya with millions of users and a myriad of sports betting companies operating to-date. However, due to tax-related issues, SportPesa and Betin, as well as a few other sports betting companies, are no longer operational. In addition, new regulations launched earlier this year by the Betting Control and Licensing Board (BCLB) have made it increasingly challenging for sports betting to operate in Kenya.
Whatever happens, going forward, sports betting primarily via mobile platforms in Kenya has changed the market considerably with many companies in the space like OdiBets and Betika dominating the fast-growing and highly controversial sector. It also goes to show that there is still room for innovation in Kenya’s mobile ecosystem where mobile money and innovative new mobile offerings can scale exponentially in a relatively short period of time.
Fixed Data Subscriptions Proliferated Throughout Kenya
Since Kenya got its first undersea submarine fiber optic cable in the form of The East African Marine System (TEAMS) in 2009, the proliferation of the broadband Internet in Kenya has been relentless. Initially, many dedicated Internet connections were delivered via wireless technologies such as WiMAX (as is still the case in areas not covered by fiber-based last-mile connectivity) but during the last few years, Fiber To The Home (FTTH) and Fiber To The Business (FTTB) Internet connectivity has grown massively.
What is interesting to note is that according to the Communications Authority’s latest quarterly statistics report for Q1 2019 – 2020 covering the period July to September 2019, Kenya has 385,318 fixed data subscriptions. The main players in this space by quite some margin are Safaricom, Zuku (Wananchi Group) Jamii Telecommunications and Poa Internet. A big driver of growth has been the growth of fixed Internet connections in peri-urban and rural areas of the country.
Fixed broadband Internet, especially to the home, has been a major driver of evolving consumer behavior due to the affordable fixed cost and unlimited data. This is driving the adoption of video-on-demand and other Internet offerings so that many consumers are ditching digital terrestrial and satellite television offerings in favour of Internet-based alternatives like YouTube, Netflix and ShowMax.
Mobile Data Gets Ubiquitous, Affordable & Fast(er)
At the start of the decade, 3G was all the rage as far as broadband was concerned with Safaricom leading the charge in terms of being the first mobile network in the country to adopt it. In a couple of years thereafter, all the mobile networks adopted 3G and this became the norm. It seems almost laughable that 3G seemed fast back then and we actually thought 4G would be a pipe dream of sorts and not necessarily needed. How wrong we were.
In December 2014, Safaricom launched 4G in Kenya. The difference between 4G and 3G was like night and day and was the only mobile network in Kenya for a few years thereafter, Safaricom milked its first-mover advantage for all it’s worth. Although 4G is now well entrenched across all the mobile networks in Kenya being Safaricom, Airtel, Telkom Kenya and Jamii Telecommunications, Safaricom recently announced plans to ensure that it supports 4G across its entire network nationwide in the coming years.
As of this writing and according to Communications Authority’s latest quarterly statistics report for Q1 2019 – 2020 covering the period July to September 2019, Kenya has 52 million mobile data subscriptions, meaning over 100% penetration, even though most mobile users in Kenya usually have 2 or even 3 mobile data subscriptions at any given time. A major trend in this area is that most of the mobile networks offer increasingly affordable data bundles that enable consumers and businesses to stay connected all the time even when they are off-network on fixed data networks in their places of work, at home or other locations.
Social Media Became Where Kenyans Live Their Digital Lives
Social media has become inextricably woven into the very fabric of the digital lifestyles of the Kenyan consumer. The numbers are hard to come by but we know for a fact that Facebook has approximately 10M monthly active users (MAUs) whereas YouTube has over 5M MAUs and Linkedin has around 3M MAUs. Twitter (apparently?) has over 2 million MAUs whilst Instagram has probably in the region of 5M MAUs? Whatever the actual numbers are, we can more or less extrapolate that Kenya must have between 15M to 20M social media users across all the major platforms.
It seems somewhat remarkable that social media has become so intrinsic to the digital lifestyles of the modern Kenyan consumer across every demographic, psychographic, geography and age group from their teens all the way to senior citizens. Indeed, as I always like to note, even ‘Cucus’ (Grandmothers in Kikuyu) are on Facebook because that is the only way that they can get to see their grandchildren’s photos on a regular basis (true. story!). The rise of social media in Kenya in the last decade has also seen the emergence of digital influencers who wield massive consumer influence thanks to their large numbers of ‘followers’.
To keep up with this trend, media, brands and even Government has had to develop social media strategies that enable them to connect with the Kenyan consumer at scale in an efficient, contextual and cost-effective manner. However, the caveat to social media is that it is a conversational platform and it is for this very reason that it has been both a blessing and curse for many stakeholders in Kenya? It depends on which side of the equation you are on but at the end of the day, it’s where more often than not that the Kenyan consumer is most engaged when it comes to digital platforms.
Government Services Went Digital On iTax & eCitizen
During the last decade, one of the most significant developments has to be that the Kenyan Government went online for a myriad of citizen and organizational focussed services. To be more specific, the Kenya Revenue Authority (KRA) launched iTax in 2013 which meant that ALL Kenyans and Kenyan organizations would be required to file their taxes online. This one move meant that essentially ALL Kenyans had to go online to do their taxes in one form or another. Since then, iTax has become a way of digital life in Kenya and everyone knows how to use it and how it works.
The second major thing that the Government of Kenya did from a digital perspective is to launch eCitizen services in 2014. eCitizen meant that the majority of citizen-focused services like such as applying for passports and IDs, searching for title deeds, renewing your driver’s license or booking a driving test can all be done online via the eCitizen Portal. eCitizen has been transformational in many ways and made the many Government services that used to take days or months (or even years?) become much faster and more transparent.
Instant Messaging (IM) Eclipsed SMS In Mobile Communications
At the start of the past decade, the majority of text-based communications in Kenya happened via SMS. This was a massive cash cow for the mobile networks as it provided a cost-effective form of communication to consumers at scale in Kenya that was cheaper than making calls or using email at the time. However, like all things in life, the only constant is change and instant messaging (IM) upended the status quo of the once-mighty SMS channel.
If you ask the majority of consumers in Kenya, they rarely use SMS today and instead use either WhatsApp or Telegram as their preferred IM mobile apps. It’s not that SMS is dead but when data bundles are much more cost-effective than they used to be and you can stay online all day, the cost of sending a WhatsApp text message versus an SMS text message makes it a no-brainer. There is also the other aspect of utility that comes with IM meaning that you can send rich messages embedded with video, images, etc and even make voice calls.
Increasingly, one of the consumer trends in Kenya that is driving the adoption of IMs like WhatsApp, Telegram, and FB Messenger is that of the ‘digital exclusive’ consumer. The digital exclusive does everything via digital channels meaning that they do not do phone calls or SMS on their mobile devices. In fact, they get irritated when they receive calls or any form of traditional communications on their mobile devices. This is a global phenomenon and therefore IM use will only continue to grow and disrupt the status quo in Kenya.
Off-Grid Energy Solutions Connected Rural Kenya
The last decade once again saw the arrival of new and innovative business concepts underpinned by mobile money and mobile technologies in the form of off-grid energy solutions. It’s a fact that unless one is located in one of Kenya’s urban or peri-urban cities or towns, access to reliable and readily accessible electricity is either very limited or completely unavailable. This scenario turned out to be an opportunity for companies like M-Kopa, Mobisol and Azuri that offer off-grid energy solutions to mostly rural consumers and businesses throughout Kenya.
The way the off-grid energy solutions businesses in Kenya work is that consumers can purchase an integrated and solar-powered energy solution for their homes or businesses that includes solar panels, lights, mobile phone charger, radio and television for their use. However, they pay for their energy solutions over time using mobile money payments on a daily basis. Their off-grid energy solution is connected to the mobile network and GPS so that if repayments are missed then they are cut-off.
This approach has been massively successful and many consumers in rural Kenya have access to a modern lifestyle with off-grid energy solutions that have enabled them to live safer and better over time. Many of these offerings are paid off within a couple of years and thereafter they can enjoy the benefits of an off-grid energy powered home or business at a very low cost of operation.
Digital Media Started Disrupting Traditional Media
During the past decade, one of the biggest developments has been the change in the kind of media that consumers access on a daily basis. Although radio is still massively popular in Kenya and especially regional and vernacular channels, there is no doubt that there has been a massive adoption of digital media by the majority of connected consumers. This means that instead of reading newspapers and watching television, consumers are turning their smartphones to access digital media in the form of social media and other digital content sources.
There have been lots of indicators such as dropping numbers in newspaper sales and also various traditional media businesses laying off staff and shuttering some of their business lines if not shutting down completely. These look like the earliest signs of what has already happened in more advanced media markets like Europe and North America when digital consumption trends have overtaken traditional media consumption at scale. The change in Kenya will be more gradual due to socio-economic factors that still make digital media too expensive for most of the population but the transition is gathering momentum every day – it’s simply a matter of time.
E-Commerce Went Mainstream In Kenya
The arrival of e-commerce platforms like AirBnB, Amazon, Glovo, Masoko, Jumia, Jiji, PigiaMe, Copia and others in Kenya during the past decade has seen the rapid ascension of e-commerce as a way or consumers to buy (and sell) products and services online. Many consumers in Kenya today do not have the time or resources to do everything they want to do and e-commerce has become an essential part of their digital lifestyles.
On the merchant side, e-commerce has become much easier and faster thanks to service providers like Finserve Africa, PesaPal and Cellulant who have all developed localized e-commerce offerings that enable businesses of all sizes to acquire online payments via credit card or mobile money. In addition, many banks in Kenya today offer pre-paid and post-paid credit cards that can handle e-commerce transactions on a global basis and funded using mobile money top-ups.
The last piece that has made e-commerce really take-off in Kenya is integrated logistics made possible by a myriad of companies such as the Postal Corporation of Mall For Africa, Kenya, DHL, Sendy, Glovo, Bwala and others. This means that the whole process of making e-commerce purchases online as well as the underlying logistics can be seamless, efficient and cost-effective for the consumer and/or business.
Digital Marketing (Finally?) Started Denting Traditional Media In Kenya
It’s been a long time coming but during the past decade, we have seen the steady rise of digital marketing in Kenya to the extent that traditional marketing is suffering the consequences. The main factors are that in relative terms, digital marketing taps into the massive uptake of digital media in Kenya where consumers are concerned and the investment required to reach them at scale is significantly more precise, cost-effective and transparent compared to traditional media.
In Kenya’s current scenario, traditional media channels like radio, print, out-of-home and radio still receive a disproportionate amount of media spend compared to digital media channels such as targetted social ads, display ads, search ads and sponsored brand content. These are still early days for digital media in Kenya but there is a growing sentiment and data-driven evidence that shows that many traditional media channels in Kenya are over-priced and under-performing relative to their digital counterparts.
As the decade progressed, the leading brands in terms of digital marketing have been in financial services, mobile networks, consumer goods, and others. Generally, there has been an upward trend where digital media spend is concerned so that a larger percentage is being allocated across different platforms. We are also seeing many small businesses investing in social media ads and digital influencers to reach consumers at scale in a more cost-effective manner.