Technology and analytics are changing the face of businesses in Nigeria. Prospective, emerging and established business owners in Nigeria can benefit from the burgeoning ICT sector to improve virtually all aspects of their respective businesses from sales & marketing to distribution and logistics, payments, audit, data analytics and communications to mention a few. Growing smartphone usage in Nigeria is arguably the most significant single driver of technology adoption by consumers as the number of internet users in the country has grown to 100million according to National Communications Commission due to rising mobile internet penetration. To a lesser extent, reducing average cost of internet connectivity has been identified as another key driver.
The National Bureau of Statistics in its 2013 MSME Report estimated the number of Small & Medium Enterprises (SMEs) in Nigeria to be around 37.1million. We expect this number to exceed 50million by 2020 premised on the growing influence of ICT on the ease of opening and operating a business. While we admit that slow economic growth and other structural challenges are persistent downsides to the sustainability and overall performance of small businesses in Nigeria, adoption of technology continues to provide an allure for entrepreneurship by a growing demographic of technology adopters.
ICT as a Strategic Tool for SME Growth
Digital channels including social media, retailing websites and mobile apps will stimulate the growth in the number of new MSMEs and self-employed individuals in the near-term. We have articulated five tech-induced factors that will be the major drivers of growth in the number of SMEs in Nigeria:
Lower Start-up Cost
A registered business in Nigeria can simply commence operations via social media, email, mobile phone and websites at almost no cost without other expensive overhead cost that require additional capital.
Reduced Basic Marketing Costs – Multimedia which combines videos, pictures, text and audio is at the heart of digital marketing via email, push notifications, social feeds, websites and mobile apps. This is less costly than the traditional mass media advertising thus making it easier to start and operate a service business.
Broader Distribution Prospects
This is particularly true for service businesses relying heavily on ICT adoption to increase distribution. With close to 100 million mobile internet users, small businesses can improve the distribution of their products and services and reach more Nigerians via the internet, bulk SMS, emails, push notifications and social media.
Increasing Access to Business Resources
The internet is a haven of business resources for SME operators who desire to have the right information and business skills to grow their businesses. Relevant websites, online forums, social clubs, business groups, professional teams, amongst others can be found on the internet, encouraging the exchange of information and valuable business resources.
Access to New Markets
The internet provides unlimited opportunities for connecting people and markets 24/7, beyond geographical boundaries with social media as the most significant driver of this trend. YouTube and Facebook are ranked among the top 5 most visited websites in Nigeria (Source: Alexa, August 2017) and provide strong tools for SMEs to access new audiences, customers and markets.
Analytics & Digital Marketing – Game Changers for Nigeria SME Growth
Effective Digital marketing tools are positive for expanding the target market of SMEs while containing the costs of leveraging traditional advertising media. SMEs that develop strong digital marketing competencies are sure to reap huge benefits in terms of operating efficiency, cost-effectiveness and customer reach. In addition, the adoption of digital strategies provides SMEs with proliferation of customer data which requires varying levels of analytics to extract meaningful insights for more effective business positioning. SME operators looking to invest in analytical tools while improving analytical competencies are best suited to make smarter business decisions in the present, and be better positioned for the future – which is indisputably digital.