Digital marketing changes African Small and Medium-Sized businesses, fuels growth

By Joseph Ekeng

In a shift towards harnessing the potential of the burgeoning African internet economy, small and mid-sized businesses are embracing digital marketing through social networking sites and mobile apps. This transformation is projected to more than double the value of the African internet economy, soaring to a staggering US$200 billion by 2025.

The unveiling of the Africa MSME Survey Report 2023 has illuminated this sweeping transition, tracking 440 small and medium-sized businesses across Nigeria, Kenya, South Africa, and Ethiopia. The report showcases a remarkable trend, with over half of these businesses having transitioned to the online sphere. The data indicates that 53% of these businesses are actively marketing their products and services online, while 45% have taken their sales to the digital platform. Furthermore, a noteworthy 24% have turned to digital avenues for their stock management needs.

Researchers from GeoPoll and Africa 118, who spearheaded the survey, emphasized that online advertising has assumed dominance across various sectors, except for agribusiness, food production, and manufacturing, where businesses primarily utilize online channels for sales purposes.

“Social media channels such as Facebook, Twitter, Instagram, and WhatsApp have emerged as the favored avenues for promoting products and services, with 67% of small businesses in Kenya, Nigeria, and South Africa utilizing these platforms. In contrast, the majority of businesses in Ethiopia (47%) continue to rely on traditional billboards and conventional media for advertisement,” the researchers revealed.

Interestingly, despite the global trend of accelerated growth in digital advertising expenditures, African businesses are anticipated to exhibit a somewhat decelerated pace in 2023. This forecast is based on the revelation that 59% of these businesses are projected to increase their spending on digital marketing, marking a decrease from the 71% observed in the previous year’s study.

A discernible shift is also apparent in the mode of marketing execution. While in 2022, 47% of businesses relied on freelancers for marketing tasks, the upcoming year is expected to witness a remarkable increase to 64%, as businesses opt for their internal staff to spearhead promotional campaigns. This transition is likely due to the increase in staffing witnessed over the past year.

“The rise in internal marketing efforts is most pronounced in South Africa (68%), Nigeria (67%), and Kenya (59%),” the report highlighted.

As technology continues to play a pivotal role in shaping businesses, a substantial 62% of survey respondents attested that their reliance on technological tools has surged over the past five years. Even in Ethiopia, where traditional media still holds sway, there is a promising shift, with 21% of businesses acknowledging an increase in technology reliance in recent years.

Kenya emerges as a pioneer in leveraging mobile apps for diverse purposes including marketing, finance, eCommerce, and operations, boasting a remarkable 64% adoption rate. This surpasses figures observed in South Africa (37%) and Ethiopia (35%).

“The application of eCommerce is most pronounced in Ethiopia, while finance dominates in Kenya and South Africa. Meanwhile, Nigeria sees a strong inclination towards marketing and advertising,” the report detailed.

The growth trajectory of African e-commerce users has been remarkable, with a compounded annual growth rate of 17.9% since 2017. The United States Department of Commerce International Trade Administration (ITA) predicts that e-commerce users will surge to surpass half a billion within the next three years. This explosion is attributed to the increasing internet penetration, smartphone adoption, and the youth demographic dividend.

“The continent leads in mobile device web traffic generation, with 69% of its total web traffic coming from mobile internet users. This trend is poised to transform Africa into an almost exclusively mobile-based market by 2040,” the ITA explained.

These transformative trends are also reflected in the surge of funding towards e-commerce startups, ranking second only to Fintechs in terms of funding. The Disrupt Africa tech startup funding report for 2022 showcased impressive annual growth of 70.7% in the fundraising sector, amounting to $556.7 million from 74 startups. This accounts for a substantial 16.7% of all funds raised by African startups in the previous year.

“Retail-tech has notably gained substantial investor interest over these years, fueling the growth in this sector,” reported The Disrupt Africa.

Highlighting the significance of small businesses in Africa, the World Bank estimates that these ventures account for a staggering 90% of all businesses on the continent. MasterCard data reveals a vast landscape of micro, small, and medium enterprises (MSMEs), with Sub-Saharan Africa alone hosting 44 million such enterprises.

As Africa continues its transition towards a digital future, the embrace of digital marketing by small and medium-sized businesses stands as a testament to the power of technology in fueling economic growth and transformation on the continent.


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