By Andrew Dawson | 3 February 2023 | Published on African Retail
Mobile penetration is exceptionally high in the Kenyan market, and the adoption of mobile technologies is well accepted. The strength of this market presents a massive opportunity to grow and optimise the Fast-Moving Consumer Goods (FMCG) space, but several factors need to be considered to drive successful adoption. The key is to deliver a complete end-to-end line of sight throughout the value chain to remove friction and improve efficiency, but the value needs to be there for traders on the ground as well. If digital solutions help them save time and/or make more money, then adoption, utilisation and growth will become a simple discussion.
Trust is the key
In this world of flux and perpetual change, the traditional trade market is under pressure to not just survive but to thrive, grow and sustain that growth. Digital technologies have been identified as an enabler for this, but eCommerce platforms for the Business to Business (B2B) space have seen limited success, particularly in African markets. Manufacturers, independent distributors, and wholesalers need to choose the right partner to help them put the best digital solution in place, and trust in digital partners is pivotal.
The FMCG space, and in particular, the traditional trade market in Kenya and other African countries, is incredibly price sensitive, which makes traders a fickle audience when it comes to engagement. The lowest price is typically the reason why traders will use one supplier over another, so whatever investment is made into digital technology needs to deliver appropriate value over and above price.
This centres on trust in the service provider’s ability and experience in understanding the nuances of the market, as well as knowing that they are big enough to deliver economies of scale, reducing the risk to service owners from a costing perspective.
Playing the long game
Ultimately, facilitating digital transformation is all about long-term strategy. Cost-effectiveness is critical, so custom-developed solutions are not generally viable. We need to look at how to plug into existing ecosystems to lower the cost barrier and develop a shared services model that will facilitate digital transformation, at a fraction of the cost of independent development.
A complete plug-and-play B2B platform with built-in warehousing, distribution and sales modules will allow dukas to leverage direct order generation while offering independent distributors and wholesalers a powerful digital solution. Service providers with local market knowledge and experience, an in-depth understanding of market needs, and the right solution to solve uniquely African challenges can provide the springboard for traditional trade to become digitally enabled and finally realise a real benefit.
The end game is a platform that is built and structured to, in its simplest form, enable the trader on the ground to run their daily business, without being intrusive and not costing them in terms of time. A digital solution needs to be beneficial in terms of both time and revenue, or it will not be used, and digital transformation will fall flat.