Tech firms disrupt world economies

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Ongoing innovations paint a clear picture of what to expect

By KEN MACHARIA

It’s no longer business as usual as the world becomes more connected via the Internet. Social media, apps, digital media and connected devices make the world a global village, in the process altering life as we know it. Since Microsoft became synonymous with computing in the 90’s, we have progressively seen tech companies rise to the top of the ‘most valuable’ companies in the world. For example, six of the 10 world’s most valuable brands are tech companies, according to the Forbes 2015 ranking. Thanks to bold, often lean and innovative start-ups, the business world is now experiencing disruption, which can only be compared to the industrial revolution. Old business models are being challenged, traditional channels are turning obsolete and service delivery is redefined. We look at five tech companies disrupting conventional business across the world, including Kenya.

Uber – How we get around

Taxi hailing app Uber is arguably the technology that is causing most urban transport upheaval in many regions in the world. The app, which allows users to pick a cab at the tap of a button on their smartphones, is causing so much disruption around the globe to a point which courts are stepping in to resolve conflicts between Uber on one side and conventional taxi companies or authorities on the other. Uber is available in 57 countries and over 290 cities including Nairobi, but has faced innumerable bans, court injunctions and suspensions in a number of cities. In spite of the stiff opposition, Uber is now the biggest taxi company in the world without a single cab. Currently, 250,000 people have signed up as Uber drivers, making 140 million rides in 2014 alone. According to Business Insider, Uber is expected to generate USD10 billion in revenues by end of 2015.   

Airbnb – How we take vacations

Air bed and breakfast, or Airbnb, provides a web platform, android and iOS app that connects owners of apartments, houses or holiday homes with people looking for short-term accommodation. Airbnb has 1.2 million listings spread in 190 countries including Kenya, making Airbnb Inc. the largest hospitality network within a span of eight years, yet it doesn’t own a single room. The company, founded by friends-Brian Chesky and Joe Gebbia, charges service fees of up to 12 per cent of the booking. Although Airbnb has not faced widespread resistance as Uber, it has nevertheless disrupted the hotel industry by providing alternative accommodation to over 35 million guests that use the platform.

Netflix – How we watch TV

Netflix turns any internet connected device – computer, tablet, smartphone, video game console into a video-on-demand service. What started off as a video renting company in 1997 grew into a DVD renting business through mail, and then later, added a video streaming service, which now has 60 million subscribers who pay a flat rate to watch unlimited videos. Netflix, which is now the largest movie rental service, has grown rapidly in the last five years and is available in 40 countries. Although Netflix is not in Kenya yet, a Netflix-original production, Sense8, was partially shot in Nairobi, and it’s only a matter of time before the video streaming service lands in Africa. Netflix is essentially encroaching the space of traditional TV channels by giving consumers the choice to watch what they want, when they want.

Alibaba – How we shop

Former English teacher Jack Ma, started Alibaba.com in 1999 with the aim of creating a business-to-business online market place. Today, Alibaba is the world’s largest online trading platform for SMEs and is available in more than 250 countries. What makes Alibaba disruptive is the fact that it has captured online shoppers in the biggest single e-commerce market in the world and China. The market is rapidly spreading across the globe. In Kenya, Alibaba is the third most visited trading website and in the top 20 visited according to website ranking tool, Alexa. Alibaba, with 350 million active users and USD420 billion in sales, has eclipsed more established players like Amazon and Ebay. Alibaba Group has expanded to include a consumer-to-consumer e-commerce platform, a third-party online payment platform, a comparison shopping website and a cloud computing company, all challenging long established businesses and models.

WhatsApp – How we communicate

Before Facebook bought WhatsApp for USD16 billion earlier last year, it was inconceivable how a messaging app could sell for so much, considering Microsoft bought Nokia mobile for USD 7 billion. But looking at the numbers behind WhatsApp, it is easy to see why Facebook splashed billions to acquire a two-man start-up who, had earlier applied (and were rejected) for vacancies at the social network firm. As of April 2015, WhatsApp had 800 million active users sending and receiving messages, images, videos and audio clips via the Internet. In the same month, WhatsApp announced that users can make calls. This is likely to eat into mobile operator’s voice revenues as it is already doing with SMS. WhatsApp has obliterated other chat apps by simplifying registration, where only your phone number is needed, deliberately making it ads-free with a simple user interface. WhatsApp is free to use with users approaching the billion mark. It is only a matter of time before a concrete revenue model is hatched, raking in billions of shillings for the owners.

Email: macharia.ken@gmail.com

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