With technological advancements in the 21st century, the market has been described as ‘explosive’ in nature. Small businesses are taking advantage of their ability to cause disruption, have independence of action, and be increasingly diversified to become big corporations, and in some instances, control the market space. These aspects allow them to exercise a given degree of advantage over other market players, which they leverage over time. However, this is not necessarily true. The quest to become more prominent, better, and faster in the field has resulted in occasional economic bubbles that bring about anxiety in any market. This increases the probability that corporations can move from positions of muscle to vulnerability and faintness. The question is, how does this happen?

Concern on market dominance in any sector has grown over the years, with some big corporations termed monopolies.  This situation is due to control over the prices, production, supply, and distribution of more than one-half of the total goods of any description, all to stifle competition. The competition regulator in such markets establishes regulations to limit such power by capping the percentage mark for market share. This move is unpopular since it restricts the ability to innovate for fear of being declared dominant.

Consumers have not been left behind in shying away from markets that are controlled predominantly by big businesses. The general feeling is that their ability to choose is constrained by the market behavior to only favor one business entity on aspects such as quality and quantity of commodities. Consequently, they tend to react against the market leaders by turning away from what they offer, thus creating room for new entries in the market.

The political environment has not been any kinder to big businesses as each election year; they become a punching bag for political outfits who believe that they are ruining the moral fabric of the society. Calls to hold corporate leaders accountable for wrongdoing to concern about the corrosive influence of corporate money in the politics of culture have stained the ability of big businesses to become more prominent, with most legislation targeting their expansion capability.

The quest to become more prominent is no longer feasible. Corporations should angle their strategies towards becoming better in aspects such as serving customers and attracting investments. Focusing more resources on future opportunities rather than preserving past successes creates the cutting edge for small businesses to become big and remain relevant in a world that is hungry for new.

Paul Oreje | Columnist, IGBR.

Webinar Review: Understanding Digital Health

stethoscope, doctor, medical

Presented by: Professor Stan Kachnowski – Columbia Business School

Technology is transforming health sector the world over in a fast pace. Health sector players are finding faster and cheaper ways of transferring information so as to effectively use it to improve the sector.

This has been a creative destruction of health systems. E-health or digital health is all things that surrounds human body and can be turned into zeros and ones. This information would not only help physicians but also the public health systems, science companies, health foundations and international health systems. It improves not only the health sectors but also the economic sectors of how digital tools can increase access to various medicines and diagnostics but also reduce cost as a nation.

There are different studies done on digital health, mostly the hypothesis expected when they put together a device or app is not mostly accurate. Outcomes are much different than what is predicted. Therefore digital health is not predictive. Opportunities that comes with Digital health may be in short-term and long-term. That is in short-term being able to do what you do today but do it for less money, work smarter not harder and have more productivity by using the same labor units. This could impact your quality rating in the long-term.

The e-health significantly depends on the population you are serving because every population uses digital differently, patient data is the core of digital health and privacy of this information is critical. Different regulations have been placed to protect such data and more awareness created on embracing technology in health systems.

By Effie Odhiambo | IGBR Columnist

Why Facebook? A brand new reason to be online in business.

In my career as a business plan consultant, I have asked my customers how they acquire new customers and how efficiently they get to communicate to and with them. Feedback from a sample of them has been the same, “Facebook”. So I have gone ahead to ask myself, Why Facebook? When I first opened a Facebook account, all I wanted to achieve was to be at par with my classmates in form three who were already in Facebook and telling lots of stories that they collected and shared on the platform. Indeed, since inception in 2004, Facebook has grown to become the world’s second most visited site with billions of visitors every week. It is no longer a static site as its algorithms and features keep changing. Facebook has evolved from just a social network to an ideal business platform through its unique infrastructure for information exchange, communication and connecting to
maintain and form relationships. Consultants, Corporations and SMEs have a cost effective alternative to connect with their potential customers through Facebook. With the continued advancement of WhatsApp Business, Facebook Messenger and integration of Instagram with Facebook, Facebook has proven to be ideal for business ahead of its competitor Google which owns G-Mail, G-Suit, YouTube and Chrome among other tools for business. In summary, follow the numbers. Facebook has these numbers regardless of size and specialization of the entrepreneur. “Twothirds of Facebook users say they visit a local business Facebook Page at least once a week.” (Kawaf, & Istanbulluoglu, 2019).

Columned by Rick Okinda.

BigTech & Money

The financial industry, once dominated by commercial and investment banks, has undergone tremendous changes, especially in emerging economies as tech companies scramble for a pie of this lucrative venture. Millions of users across Africa and Asia are more likely to pay for services using their phones as opposed to banks. Things have never been easier for these consumers who can now save, borrow, buy insurance, and even invest using tech platforms such as M-pesa, Alipay and WeChat. All these financial tools were thought to be a preserve of the rich and developed world, what made it easier for the underserved communities to easily access these essential financial services? An answer can be found in the short stories herein.

A story is told of a man who wanted to build the largest e-commerce marketplace in the world. This man wanted to ensure that payments were secure and that everybody could conveniently pay upon receipt of their goods. No bank wanted to partner with him, facing such rejection, he set up a financial division which acted as an escrow for holding customer’s funds. The funds could only be released upon delivery of goods. The move built trust in the most populous country in the world and as their business grew, so did the funds in escrow. This forced them to rename their financial division Ant Group which in 2019, facilitated more than $15 trillion worth in transactions, an amount similar to EU’s GDP and way more than what was transacted by MasterCard and Visa combined. With such huge data and financial muscle, the group is eyeing a $32bn dual listing in Mainland China’s Shanghai exchange and the Hong Kong Stock Exchange.

Another story is told of a 20 year old tech company in East Africa which wanted to change its community through mobile money. The firm understood how cumbersome it was opening a bank account which not only required a minimum bank deposit but also knew how expensive it was transaction wise. Their mobile money wallet was launched and its uptake in the first year shocked many. Coupled with violence after a highly contested plebiscite, movement restrictions were imposed and the only way one could send money was through their phones. Over the years, the mobile money segment has increased its offerings from facilitating transactions to savings, loans, and investing. This has been the backbone of the country’s economy forcing all banks to partner with them for survival. As of 2020, the firm’s market share of cashless transactions stood at 85% and it is the most profitable company in East & Central Africa.

Other than filling a vacuum created by the bureaucratic banking system, big tech has also been consolidating its offerings and finance is the last pillar in this system. For example, Facebook has been connecting people over the years and it wants people to send money in the simplest way possible, just like sending a text message. This frontier will help them build on their data about an individual’s consumption behaviour starting from what they buy, at what price and location, not forgetting the time/day they are likely to spend. All tech companies are competing in this frontier with each targeting its largest user markets. For Instance, Facebook is looking to expand its financial services in India and Brazil. Apple is expanding AppleCard in America and Europe while Tencent’s WeChat Money is rapidly expanding in Asia. With such developments, consumers have witnessed a sharp decline in transaction costs with companies such as Ant, through its Alipay, not charging for transactions in Alibaba’s portfolio.

Technology will continue playing a bigger role in the financial sector and with this, there comes more concerns on dominance, data privacy and efficiency. These issues have raised conflicts with commercial banks lobbying for more regulation owing to the fact that their market has been taken over by these firms. A good example is Brazil’s regulator suspending the use of WhatsApp Pay and Chinese regulators delaying Ant’s IPO as they draft new laws regarding online financial services. Kenya has also implemented tougher rules on online lenders to curb predatory lending.

In addition to this, regulators are more concerned about data privacy and competition. This has seen a rise in antitrust proceedings being filed against these tech giants. This is with the aim of ‘leveling the playing field’ which was once abused by banks through predatory lending leading to the greatest financial crash in modern history.

Bigtech in most cases, came to fill certain gaps in the financial sector. These efforts should be uploaded especially in emerging markets where it has promoted financial. Going forward, tougher rules regarding data privacy should be legislated to prevent misuse of personal information. Also, regulators especially central banks should encourage innovations which promote inclusivity as they try to lower transaction costs, which is a business barrier in developing economies.