- The business environment in Kenya in 2024 was marked by technological and economic trends that influenced companies.
- From government tax policies to market fluctuations and artificial intelligence (AI), most businesses have adopted the trends that have helped them manage to survive.
- Experts anticipate that generative artificial intelligence and evolving mobile networks, among other trends, will continue to impact businesses in 2025.
Djogdja News.co.ke journalist Wycliffe Musalia has had over six years of experience in reporting on finance, business, technology, and climate issues, providing in-depth knowledge of Kenyan and global economic trends.
The business environment in Kenya is undergoing rapid changes driven primarily by technological advancements.
Many companies, businesses, and individuals now utilize artificial intelligence to improve their operations and boost customer satisfaction.
Why businesses embrace AI
According to a 2024 study by the Creatives Garage, there was a high degree of awareness and adoption of generative artificial intelligence tools among creatives in Kenya, with 75% participation, with favored tools including ChatGPT, Google Gemini/Bard, and Canva.
According to Forbes, 64% of businesses anticipates that AI solutions will enhance their productivity during the same year under evaluation.
Most businesses have adapted to trends that have assisted them in remaining afloat, including government tax policies and market fluctuations which involve artificial intelligence (AI).
Experts predict that advancements in artificial intelligence that create new content and changes in mobile connectivity, among other trends, will significantly impact businesses in 2025.
The following is a list of business trends in 2024 that will influence 2025.
Which business trends will drive the landscape in 2025?
1. Generative AI
According to BCG, Generative AI encompasses a set of algorithms that can create new, realistic content - such as text, images, or audio - from training data.
In 2024, numerous businesses started utilizing generative AI technologies like crafting compelling social media content and creating impactful newsletters to greatly improve their operations and customer interactions.
Forbes stated that generative AI will create new opportunities across healthcare, manufacturing, education, and numerous other sectors.
Generative AI is poised to capture approximately 30% of the entire AI market and be worth roughly $60 billion (approximately KSh 7.8 trillion).
2. Resilience in the face of economic uncertainty and market volatility
In 2024, a number of companies devised tactics to weather the storms brought about by the flood-related disruptions and the subsequent anti-Finance Bill 2024 demonstrations.
Some were affected by the violent demonstrations against the condemned bill, but others had drawn a lesson from the uncertainties of the 2020 COVID-19 pandemic.
This trend has been in place since the pandemic, compelling businesses to develop the capacity to survive and adapt to disruptions, and it is forecast to persist in 2025.
3. Changes in Interconnection and Mobile Networks
In 2024, Kenya experienced the highest degree of internet competition and advancement recorded to date.
The satellite internet provider Starlink, owned by American entrepreneur Elon Musk, experienced market growth, allowing Kenyans to access high-speed internet, which boosted business throughout the year.
Starlink's tough competition led local internet providers to boost their 5G mobile network coverage, which likely impacted many business operations.
Kenya's top telecommunications company, Safaricom, announced that it will be providing enhanced internet speeds for its home and business customers in an effort to meet the growing need for higher connectivity in Kenya.
It is predicted that this trend will persist in 2025 as companies will increasingly rely on 5G network connections through the Internet of Things (IoT) to optimize their business operations.
We are referring to a network of physical devices, typically including just basic sensors, which are able to wirelessly join with one another without human involvement to exchange information with other devices and systems.
According to Celona, 5G wireless is frequently seen as a perfect solution for IoT networks due to characteristics such as low latency performance even in high-density deployments and a very large coverage area capability, particularly in mid-band spectrum operation.
4. Environmental, Social, and Governance (ESG) principles provide a comprehensive framework for companies to evaluate their impact and performance across three primary dimensions.
Kenyan companies primarily prioritize Environmental, Social, and Governance (ESG) operations which help address environmental and climate change resolutions.
In November 2023, the Kenya Bankers Association (KBA), together with various industry stakeholders, issued the Sustainable Finance Guidelines and Report.
The chief executive officer of KBA, Raimond Molenje, observed that the revised guiding principles will enable banks to adopt leading practices in governance and risk management, ultimately fuelling innovation and financial accessibility.
By 2025 and beyond, commercial banks will extend financing to businesses that consider and incorporate principles of sustainability (ESG) in their operations.
It is reported that approximately 85% of consumers worldwide have modified their purchasing behaviors to prioritize environmentally-friendly and socially responsible products, often known as ESG products, over the last five years.
5. Online Shopping and Electronic Commerce
E-commerce trends have been rapidly increasing since the COVID-19 pandemic affected many countries, including Kenya, as far back as 2019.
Statistics show that over a third of customers worldwide make online purchases, with a significant majority – 75% – utilizing their mobile phones for the process.
The figure shows that making shopping easier on mobile is crucial in the forthcoming year of 2025 and beyond.
E-commerce is expected to reach a value of $8 trillion by the year 2027, a phenomenon that many business owners would do well to take into account.
Jiji, Kenya's leading online marketplace, was named the top e-commerce platform at the 2024 Digitally Fit Awards - East Africa Edition, demonstrating a trend that appears to be enduring and continuing to grow.
Which businesses experienced success in the year 2024?
The first six months of the year were marked by high inflation, a weak currency (the shilling), and significantly high interest rates of 13%.
In fact, leading companies like Safaricom successfully navigated these obstacles and continued to thrive in the market.
Other airlines, such as Kenya Airways, reported a decade-long streak of profit increases, and emerged as the second most efficient airline in Africa.
* The Kenya Airports Authority manages the country's airports.
- According to World Bank estimations, by June 2024, Kenya's economic growth is anticipated to reach a 5% rate by 2024, a decline from the growth seen in 2023.
- More than 100 businesses have shut down operations in Kenya, with the largest being the former retail market leader Ukwala Supermarket.
- In 2024, despite the government's claims of an improving economy, several other companies laid off their workers.
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