Open content: The key to unlocking small businesses growth in Africa
Knowledge is power, and the internet has democratized that power, making it more accessible to everyone. If you wanted to keep up with the news a hundred years ago, you would have to walk down to the local newsstand to pick up the paper and find out what happened the previous day. However, with the internet, you can keep up with the latest news worldwide, updated to the minute.
This democratization of information has profound implications for small businesses. The rapid dissemination of ideas means that entrepreneurs can better take advantage of opportunities to create value and drive growth. However, small businesses in emerging markets have been ghosted by a lack of relevant content on how to access the tools, skills, and opportunities to grow their businesses, keeping them at a significant disadvantage. To fully unlock the growth potential in emerging markets, we must build open content platforms that provide MSMEs with locally relevant content and show them how to grow their businesses.
Open content was the internet’s original purpose
Imagine we could step back in time to speak with the founder of the internet; what would he say? The internet’s creator, Sir Tim-Berners-Lee, asserted that the internet must be an “open and democratic platform for all.” Unfortunately, that dream was not fully realized, and the internet quickly evolved to the walled gardens of Web 2.0 as centralized platforms began to leverage the power of online content to attract new customers.
This can be seen in the recent move by tech companies to reduce their CAC (customer acquisition costs) by creating proprietary content or acquiring content platforms to increase word of mouth, engage existing customers and attract new customers. Last year, HubSpot acquired The Hustle, a media company that produces a newsletter and podcast. Square acquired Tidal, a music streaming service, and the year before, Robinhood acquired MarketSnacks, a financial news company that offers bite-sized business updates.
This move proves that creating and sharing valuable content is key to driving tech adoption. Yet, content creation is seldom considered key to driving small business growth in emerging markets. For example, many merchants do not know that building a digital trading profile will provide them access to credit and other financial services, so they do not see the need to adopt digital solutions, even when available.
There is a lack of local content tailored to small businesses
The impact of the internet and mobile services in emerging markets cannot be over-emphasized. The high mobile penetration rate in Kenya enabled the rapid growth of mobile payments. With mobile money, a technology that works on the simplest of mobile devices, individuals in the most remote areas could send and receive money, pay bills, all without a formal bank account. SMEs could also accept digital payments and access the credit they need to grow their businesses. Thus, increasing the adoption rate of digital services in LATAM and Africa is key to unlocking the growth potential in those markets.
According to the Internet Society, the major challenge to driving mobile and internet adoption across emerging markets, especially in Africa, is not access to the technology itself but the lack of content. Increasing internet access is a means to an end, the end being the content and services businesses can leverage when they come online.
Much of the content available online today was created for developed economies and, many times, is not relevant to the realities that small businesses in emerging markets face. For example, a quick search on “how to sell online”will provide numerous resources created by e-commerce platforms like Amazon or Shopify to gain users for their platform. However, these resources take for granted some of the challenges that MSMEs in emerging markets face, ranging from distribution and logistics issues to financial exclusion and an inability to accept payments. On the other hand, social commerce, or selling on social media, is popular in emerging markets. It provides a bridge between traditional sales, which many merchants are used to, and e-commerce, which remains inaccessible for many. A recent report shows that 92% of SMEs in Kenya use social media platforms like Instagram, Facebook, and WhatsApp to carry out their businesses.
This is a digital use case for mobile services that can help many small businesses drive mobile adoption. Yet, not much content has been created to help merchants adopt this solution and grow their businesses.
The massive content opportunity in emerging markets
Emerging markets promise the biggest growth opportunity in history, where 1 billion new middle-class consumers will be created by 2025, and annual consumption is set to reach $30 trillion by 2025. However, this growth can only be captured by accelerating the rate small businesses adopt the digital tools and solutions that help them grow their businesses.
Adopting digital payments, for example, can help MSMEs reach 1.6 billion new retail consumers, provide $2.1 trillion in new credit, and increase the GDP of all emerging economies by 6 percent. However, many merchants still refuse to adopt digital payments even when the technology is available because they do not understand it. Open commerce is another digital solution that can empower local merchants by connecting them to any FMCG brand and providing access to more products at affordable prices, but adoption remains low.
The only way to truly drive change across emerging markets and empower the millions of small businesses restricted to subsistence trading is to create open content platforms that provide locally relevant content and educate them on the advantages of embracing digitalization. These platforms must be easily accessible and free from control by centralized platforms that are only interested in gaining users for their platforms and exploiting them rather than empowering merchants to grow their businesses.