Sharing could soon be the leading driver of economic growth in Kenya, thanks to continuous disruptive innovation in the service industry.
With Kenya’s digital readiness cited as the main contributor to the phenomenon that is “sharing economy”, it is expected that the economy will grow consistently stronger.
Such sectors as hospitality, transportation, property and finance, according to the latest research by Jumia Travel, have been marked as critical to the future of the country’s economy since they embrace sharing as their model to generate significantly higher revenues.
Not only that. Even the emergence of platforms that offer services such as crowdfunding, peer to peer lending, book sharing, office space sharing, cleaning and laundry services, online staffing among others, are expected to contribute significantly to the growth of the economy.
And it looks like this outlook is based on solid evidence:
According to a recent report by Price WaterHouse Coopers, global revenues generated by the growing phenomenon that is shared economy or peer to peer (P2P) business is predicted to be worth 335 billion US dollars by 2025.
Need to adapt
“These numbers are an indication of the need for traditional businesses to adapt their offers to the fast changing environment,” notes the report.
But while traditional buyer-seller and “rental” sectors toy with the idea of either adapting their models to the new era, or overhauling systems to accommodate these growing megatrends, notes Jumia Travel, players in the tourism industry seem to feel the heat more.
“The emergence of such facilities as Airbnb, couchsurfing and adaptive hostel amenities are seen as real competition to the otherwise well put together hotel chains.”
Ms Estelle Verdier, managing director Jumia Travel also associates this dynamic growth of the sharing economy to technology and the youthful population otherwise known as Generation Y.
“Traditional business models have
largely transformed in response to technology advancement.
More than ever, people are experiencing their initial contact with the Internet through a smartphone, and connectivity has greatly improved through the last years.”
Even-so, Verdier notes that players in the tourism industry are also adapting new models to enhance not just their services but also convenience to the customers.
Yet hardly had those sentiments settled when another piece of evidence emerges on world connectivity as the base for proliferation of the sharing economy:
Incidentally, a joint Digital Evolution Index (DEI) report by MasterCard, DataCash and
The Fletcher indicates that about 40 per cent of the world’s 7.4 Billion population is on some “sort”of connection, affirming the Internet to have come of age.
“The world Wide Web now forms the core of the global economy, thus forming a solid base for proliferation of peer to peer economy”.
At the same time, DEI classified Kenya, Egypt and Nigeria as “watch out” countries together with Indonesia and Russia, as a lot of energy is expended in innovating around institutional and infrastructural constraints.
As a result, the think tanks point out, the named countries are expected to develop strong digital economies that will display a consistent upward trajectory.
BY MOSES OMUSOLO