SMEs miss out on benefits of digitalisation

Zimbabwe’s budding small to medium enterprises (SMEs) are missing out on the full benefits of the digital economy due to resource constraints and poor infrastructure.

Globally, digitalisation has been the latest mantra following the outbreak of the Covid-19 pandemic, which forced businesses especially the financial services sector to automate their services in line with lockdowns that were implemented.

Digitalisation is also seen as an enabler for growth allowing businesses to have a global reach as opposed to specific geographically located markets.

But SMEs in Zimbabwe are yet to benefit from this to reach a wider market.

Entrepreneurship consultant Pearl Mbazima highlighted there are some basic skills that are missing or not implemented by SMEs to get the most out of social media platforms, for instance, that have become marketplaces for goods and services.

However, SME Association of Zimbabwe chairman Farai Mutambanengwe said a lot of factors still need to be considered for SMEs to derive maximum benefits from the digitalisation wave. He cited the lack of appropriate devices, poor network services as well as limited infrastructure to support a fully e-commerce-enabled environment.

“Certain environments make it difficult to easily adapt to digitalisation,” he said during a First Capital Bank (FCB) webinar on adapting to the digital revolution: how small and medium enterprises can thrive.

“In developed worlds, people literally do their shopping online and get goods delivered to their doorsteps, but it’s different here. We are still in the early stages of digital evolution.

“People can market goods online but is there a guarantee that those goods will be delivered or that they are in the state they show on online images? This is why I can look for goods online and then go to that physical shop to see them in person and transact,” he said.

He added the cost of transacting was also another hindering factor.

“The transaction charges are too high, if the bank takes US$6 for transacting alone, it becomes more reasonable to just walk to a physical shop for purchases.

“People in the first world have more money than time and therefore can afford to spend extra dollars unlike here,” he said.

EY Consulting executive director Newton Madzikwa said while digitalisation is driving growth, it is imperative for SMEs to have a clear strategy and understanding of what they want to achieve when setting up a website or using social media platforms.

“Technology takes away the distance barrier, someone in China can easily take your market which is within your locality so it is important to know what you want to achieve.

“Good as it is, technology can also be a risk factor that can take you out of business,” he said.

In terms of marketing, Zimbabweans are turning to social media platforms, websites and other digital platforms to market their goods or search for products and services.

But payments are largely done in physical branches. Tech entrepreneur Tawanda Chikosi said the case of confidence and trust still remains an issue in Zimbabwe when it comes to digital payments.

“We need to have systems that address trust and confidence issues because people identify products online but complete the transaction offline.

“Right now Zimbabweans purchase vehicles on Be Forward, a Japanese company but cannot trust any other local online platform, so confidence and trust need to be addressed,” he said.

FCB commercial banking director Mutemwa Ushewonkunze said there were vast opportunities to tap into digitalisation. He said social media platforms were providing a good opportunity for accessing markets for SMEs, but more still needs to be done on payment platforms.

“Whoever brings a payment platform to tap into this vast market will win,” he said.

On the global scale, big companies such as Amazon and Alibaba thrive on e-commerce reaching global markets via digital platforms.

Recently, the owner of Twitter – now X platform – Elon Musk announced some sweeping changes to the platform and one of them is turning it into “an everything app,” which enables users to communicate as well as transact.

This replicates WeChat and Weixin, Chinese instant messaging, social media as well as mobile payment platforms.

Having these kinds of platforms in Zimbabwe would be ideal in facilitating e-commerce. Currently, Zimbabwe has the likes of Tengah and Paynow among others but still not as popular.

But EcoCash mobile money platform is the biggest and has managed to penetrate even in rural areas, reaching the previously financially excluded.-herald