Kenya - Balancing hope and gloom in a fast-evolving market
Political transition and the economy
After relatively peaceful elections in August 2022, the new government is prioritizing economic recovery, given the elevated national debt, inflationary pressures, weakening local currency, unemployment, rising cost of living, drought, rising fuel and energy costs.
Indeed, in a pre-election poll of August 2022, half of Kenyans (51%) felt the country was headed in the wrong direction and wanted specific issues sorted: education (46%), healthcare (21%) and corruption (29%)[1]. The new government has embarked on quick wins to address the concerns, expanding access to credit (4 million Kenyans delisted from credit reference bureaus), base lending rate raised to 8.25%, 1.4 million bags of fertilizer provided to farmers at subsided price, a 10-year ban on GMO crops lifted and proposed KES 300B budget cut for the next financial year. Overall, economic growth has averaged 4.5% in the decade, slumping to 0.3% in 2020, then recovering to 7.5% in 2021[2]. However, it is expected to decelerate to 5.9% in 2022 and further to 5.7% in 2023.
Expanding middle class, more digital consumer
Kenya’s GDP by volume has nearly doubled in the last decade. The Kenyan consumer has become wealthier relative to seven years ago, projecting an emerging consumer market profile in the region – high end consumers now form 5.9%, up from 2.8% in 2015, the middle consumer group is now a robust 56.9% of the total population.
More than 70% of households now have access to electricity, enabling more Kenyans to access TV and other electronic devices like mobile phones, whose penetration now stands at over 95%. The fact that 53% Kenyans have smartphones and spend +3.2hrs per day on the internet makes it a leading market for digital marketing. New apps such as TikTok (now accessed by 10% and growing) are taking more space from older ones like Facebook and Twitter.
Kenya has a rapidly rising proportion of single mothers, that has grown from 25.1% in 2009 to 38.2% in 2019[3], and well approaching 50% according to a recent ‘Top 100 Most Loved Brands By Women’ survey.
There is a growing trend in non-conformity to longstanding ideals such as marriage and shifting family responsibilities.
Related to this, over 85% of household purchase decisions are made by women making them a core demographic for marketers.
Chris Githaiga
Victoria Nyamunga