Knowing SME trends makes it easier for SME owners to thrive and grow their businesses. The role of SMEs in Africa cannot be overemphasized. In fact, SMEs are expected to create four out of every five new jobs over the next 15 years, This will play a leading role in creating the estimated 600 million new jobs required to absorb the growing emerging market workforce.
This is especially important in light of International Monetary Fund figures. The figures indicate that by 2035, the number of Africans joining the working-age population will exceed that of the rest of the world combined. Many small businesses closed in 2020, and 2021 looks like it’s going to be a challenging year, as well. Aside from lockdowns and restrictions due to Covid-19, rapidly changing technology is also putting pressure on businesses. Hence, forcing them to adapt to meet consumers’ demands.
With 2020 in the books, small businesses on this continent are optimistic that 2021 will be a brighter year. While the harsh impacts of the COVID-19 pandemic are still deeply felt by African entrepreneurs, that optimism is buoyed by the distribution of vaccines.
Due to the pandemic and the challenges it posed for SMEs in Africa, business owners need innovative ways to remain competitive. One of the most effective ways for SMEs to thrive during these uncertain times is by keeping up with SME trends. Here are a few to look out for:
1. E-commerce and technology adoption
It is no accident that E-commerce sits on the top of our SME trends list. If there is one single change a business owner should focus on to bring about success following Covid-19, it’s increased digitization of the business. It goes without saying that increasing and improving your digital footprint and capabilities is now more important than ever. The level of digitalization required is dependent on your chosen industry. However, today, even in the more industrialized spaces, you can’t get away from creating your digital identity.
This second quarter of 2021 is a great time to revamp and implement this trend. Collaboration tools such as Slack, MS Teams, and Trello will do a great deal in helping SMEs to increase productivity. They can do this while navigating work from home or office hybrid models. These tools also go a long way to ensuring that a business owner can keep abreast of all the projects in play from one single platform.
While e-commerce is not relevant for all sectors, having an online presence is vital to increase awareness for any business.
2. Social media marketing and social management tools
The leading social media platforms have billions of users between them. So, it is no surprise that for the past few months, social media has been a growing target for marketers. This rapid growth won’t stop in 2021.
Estimates from insurance firm Finaria suggest that the social media ad spend will increase by 15% in 2021. Hence, growing the total spent on social media ads to $105 billion. That’s nearly double the $54.4 billion total social media ad spend in 2017.
While social media advertising is increasingly important, successful SMEs in Africa are already focusing on a multichannel organic approach. This approach will help build an audience and brand awareness through the use of some amazing tools. Social management tools allow these small businesses to manage all digital activities from a central location. Teams can remotely post, engage, and respond to consumer queries on time.
Platforms such as Hootsuite, Social Studio, or Socialbakers have a wide range of functions that help streamline all social media activity. They also have the added benefit of helping a business keep its finger on the pulse through social listening and sentiment analysis.
3. Customer experience and personalization
According to a report by Boston Consulting Group, retailers that have implemented personalization strategies see sales gains of between six and 10 percent. These gains are at rates that are two to three times faster than other retailers. I hope this explains why the SME trend is something to take advantage of this year and beyond.
There are all kinds of ways to do it; your online store can show suggestions of other products they might like, based on their previous purchases. Also, you can segment Email marketing into user-interest groups for a more tailored sales approach.
As more people engage with businesses via digital channels, ensuring a positive and consistent customer experience becomes critical to an SME’s success. Having a strong digital presence on platforms such as LinkedIn and the company website gives stakeholders a reference point. This becomes a guide as to what an SME does and how it distinguishes itself.
Such a presence further provides a shop window into the SME: by telling the story of what makes their business unique. SMEs in Africa create interest among customers and establish trust among internal and external stakeholders.
By adding a powerful customer relationship management (CRM) solution, African entrepreneurs can gain deep customer and social insights. Such insights can be used to deliver individualized customer experiences across all channels. Also, service levels can increase by providing service representatives with customer visibility. This will empower them with improved problem-solving and issue-resolution capabilities.
The key here is to have effective CRM software that tracks customer interactions with your business. This will help you implement your customer experience and personalization strategies. It will ensure their next interaction with you is as personalized, and satisfying, as possible.
4. Automation Is Key
The accelerating pace of businesses on the African continent has put pressure on organizations to speed up time-to-market. Thanks to the pandemic, the cost of engaging in repetitive administrative tasks has become too steep for most SMEs in Africa to bear.
The use of machine learning and artificial intelligence (AI) enables SMEs to automate many of the back-office operations needed for smooth business operations. By automating some of the customer-facing elements that are not core to their offering, SMEs can pass on some of these efficiencies. These efficiencies can be passed to their customers for an improved customer experience.
Relying on automation and using various business practices built on a global repository of learnings and experience has become prevalent. For instance, the smart use of business templates cut down the time it takes to get back-office operations up and running. The best part is that it gives room for future customizations once the business has matured.
While these tools were once the reserve of large enterprises, global vendors are increasingly prioritizing the SME sector. They do this by introducing products and solutions specifically built for SMEs.
5. Flexible Employee Policies
In 2020, employees and business owners were hit hard by the lockdown and reduced hours of operation. These events combined with longer-standing trends, such as more businesses offering flextime and hiring independent contractors “and” part-time workforce helped. It isn’t always easy maintaining strong relationships with employees in such uncertain times.
The direct result of this has been increased flexibility in employee policies throughout Africa. More SMEs in Africa today allow employees to work remotely having been forced to reassess the benefits they offer. We have all seen that people can juggle multiple jobs while still delivering on all their responsibilities.
Productivity is a measure of efficiency. While working from home may not make people more productive during their usual business hours, they are getting more done. Employers can hardly complain because they also save a lot on their daily overhead costs. Frankly, this is one rising SME trend that is set to revolutionize the African economy in more ways than one.
Conclusion
There you have it for the top SME trends in Africa in 2021. Africa’s potential as a growth market for business remains both underestimated and misunderstood. The same applies to the potential for businesses to play a transformative role in solving the continent’s biggest challenges.
At the same time, greater innovation and investment from business is essential to meet Africa’s unfulfilled demand for goods and services. Also, it helps to close the gaps in its infrastructure, create jobs, and decrease poverty. For entrepreneurs ready to solve problems and tap into these SME trends, there is a tremendous opportunity for growth.
We hope you will be one of them.