In 2023, Africa needs an economic turnaround after the COVID-19 pandemic disruptions and the war in Ukraine. These two events have caused global economic shocks, with Africa being among the most affected continents. However, where great challenges lie, great opportunities are presented. Many businesses are looking forward to major turnarounds, making their models more resilient to future shocks. Business can leverage numerous trends and opportunities to improve their best practices, which can be informed by gaps in their and related industries. These trends create a new and improved way of doing business and provide opportunities that help their growth.
There are major and minor changes in certain businesses that might cause a paradigm shift, some of which are listed below.
- E-Commerce Growth Persists Post-Pandemic
According to Statista, African online retail has been proliferating in recent years and this trend is predicted to go on. Nigeria, South Africa, Kenya, Morocco, and Egypt have a booming e-commerce market, with several companies leading the line, including Jumia, Konga, Takealot and Kilimall. Some of the enabling factors that have led to this growth are access to reliable internet, availability of various products, digital payment systems, and alternative payment methods. Africa, also having the youngest population in the world, is a significant factor contributing to the exponential growth of the sector. The trend has shifted from in-store buying to e-commerce, cutting across different sectors such as foods and beverages, household items, electronics and expensive items such as vehicles. The growth of e-commerce will continue, especially after the COVID-19 pandemic, which forced certain trends to come up at the expense of others. The growth of e-commerce is expected to increase due to the ease of access to goods and services it has made available to customers.
- Internet Connectivity to Vastly Improve Data Collection and AI Capabilities
The internet has led to the growth of many industries across Africa. Access to information and data collection has been a leading factor in setting up businesses and learning the global trends in different industries. A host of leading tech companies such as Microsoft, Google, Meta (Facebook) and various African tech companies such as Flutterwave are tapping into Africa’s digital transformation. Tech companies such as Google and Meta have already laid out plans to tap into Africa’s internet demand to increase access to the internet through their Equiano subsea cable and the 2Africa subsea cable, respectively. This will increase many companies’ capabilities to collect data and enhance artificial intelligence (AI), which helps in targeting and segmenting audiences. Data plays a vital role for big tech companies. The more data these companies have, the better their advantages are when providing improved customer service and operations and creating personalised marketing campaigns, ultimately increasing revenue and profits.
- Businesses to Expand Communities and Commerce on Social Media
According to How We Made It in Africa, social media and digital channels are under-utilised in Africa, and the time has now come for many companies to enhance their digital footprint. As digital transformation soars, social media remains essential for keeping audiences, clients and potential customers in touch with brands. Digital channels enable businesses to be within reach of many people. Digital and social media channels have eased access to products and led businesses to improve their services while boosting their profit margins. In addition, this has led to an increase in consumerism in many African economies, which is positive for these economies. Besides creating a digital footprint, these channels offer a dynamic range of options for those using them. Social media and digital channels give the full experience to many customers and clients and help them to actively participate in improving products and services.
- Companies Focus on Sustainability
Climate change has dealt humanity a heavy blow. With an increase in demand for many essentials, the environmental impact will be more negative than positive. Governments and businesses of different tiers are looking for other ways to ensure that they can incorporate sustainable business practices without impacting the environment. According to the latest McKinsey Global Survey, 83 percent of C-suite executives and investment professionals believe ESG programs will generate more shareholder value in five years than they do today. Several investors have to factor in environmental, social and governance metrics to analyse whether it is worth investing in a particular business. A company’s carbon footprint, board diversity, community development efforts and water usage are top on the list. Governments, on the other hand, need companies to thrive so that investors can see the sustainability aspect and are tasked with creating and enforcing policies aligned with sustainable business practices. Companies’ primary focus should shift towards turning the tide on business practices that negatively impact the environment. Sustainability is the right thing to do for businesses so that they can lead by example.
- Adoption of Disruptive Technology
The term disruption is a buzzword in the current business language. The term became well known during the start of the COVID-19 pandemic as it was responsible for ‘disrupting’ the business world. Disruption, as was coined, is when a product takes root at the bottom of a market and proceeds to move up this market, eventually displacing more established competing businesses. The perfect modern example is Airbnb which came at the bottom of the food chain and ended up disrupting the hotel industry. This has seen many people opting to use these technologies because they can identify the gap left behind by the more established businesses. In Africa, this is the case as many technologies have been able to position themselves to cater for certain aspects of services that are being ignored or are no longer a priority by the more established businesses. Disruptive technologies and innovations are an effective way of thinking about innovation-driven growth.
Rashmi Bansal’s book ‘Stay Hungry Stay Foolish’ gives the insight that we should never stop learning and venture into new prospects more frequently. This is the same for businesses around the world. The trends continue to present themselves annually and even in shorter periods. Businesses can take these up and find opportunities to improve many, if not all, aspects of their businesses. Some of these opportunities require complex strategies and even a change in the business models. Still, some need minor tweaks which can change a company’s DNA and future. Businesses need to be innovative and creative to develop ideas that can take them to the next level.