The cost-of-living crisis, rising inflation and fears of a recession are creating considerable challenges for retailers and restaurants in Kenya, according to new research commissioned by Glovo.
The research found that, compared to the pre-epidemic period, most businesses (86%) changed strategies more frequently to reach more customers.
Seventy-seven per cent of the businesses also indicated diversifying their offers to reach consumers. Most businesses also indicated that the current business environment is the most challenging ever.
The research follows the launch of Glovo Local, a program designed to help small and medium-sized retailers and restaurants digitize their businesses and grow their online presence.
Glovo Local follows the rollout in all 25 markets Glovo operates in for its 150,000 partners, which is expected to expand to 250,000 by the end of 2023.
Regarding reaching new customers, 40% said this was their main challenge in Kenya.
The study of more than 3,200 small and medium-sized food, grocery, and restaurant businesses across nine markets in Europe and Africa (the UK, Spain, Portugal, Italy, Poland, Bulgaria, Kenya, Romania and Morocco) found that more than one-third of SMEs 34% regard reaching new customers as their primary challenge as well, with 25% of UK businesses saying the same.
Factors causing SMEs to seek additional support and solutions were changing consumer habits, high inflation, lower consumer spending, and overarching macroeconomic risks.
“As we move forward post-pandemic and the lessons we acquired during that time, it is paramount that we continue to leverage on the current digitization of all sectors, for SMEs more than ever have to be open to technology, the future is here with us,” Caroline Mutuku, General Manager Kenya at Glovo said.
“It will get better with time; digitization is crucial to the growth of SMEs. About 40% of businesses digitized during the COVID pandemic. Post-pandemic, 68% of businesses continue to operate digitally with 30% starting working with delivery partners during the pandemic.”
Growth is still on the agenda for 2023 as the research also reveals that, despite the current economic turmoil, 62% of the businesses are on survival mode. However, 92% are optimistic they will achieve significant growth in the next 12 months.
The role of a technology partner is set to grow, and understanding the market and customers’ needs (at 90%) was rated as the most critical factor in helping businesses remain relevant.
Further,79% of businesses believe a technology partner will help them stay competitive as the cost of living soars worldwide.
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