Zoho, a lesser-known competitor of Google and Microsoft in the realm of enterprise software, has been making strides in Africa as a cost-effective option compared to the major players on the global stage.

The company has recruited staff from the local area, introduced payment choices in regional currencies, and even supported a cricket tournament to firmly establish its presence in the market.

Despite initial achievements, African tech experts suggest that Zoho must enhance its branding and actively involve itself in the local tech community to pose a significant challenge to its bigger competitors in the future.

While speaking with Rest of World, Praval Singh, Zoho's Vice President of Marketing and Customer Experience, conveyed that there exists a vast opportunity for "digital transformation" within African nations.

“A lot of companies are adopting digital, either for the first time or they’re on that path of making their businesses more efficient using technology,” he said.

Rest of World spoke to seven startups in Nigeria, Kenya, and South Africa that have ditched Google and switched to Zoho’s products over the past year or so. 

Although Zoho originated in India back in 1996, it wasn't until 2019 that it started on-the-ground activities in Africa, starting with one sales representative each in South Africa and Nigeria. According to Andrew Bourne, Zoho's regional manager for Africa, the company now boasts approximately 60 employees spread across the continent. Apart from offering work management tools similar to Gmail or Google Drive, Zoho markets software for customer relationship management, human resource management, accounting, and various other products.

Globally, Zoho has over 100 million users. Its clients range from e-commerce major Amazon, leading carmaker Mercedes-Benz Group AG, Indian airline SpiceJet, and food delivery platform Zomato.  According to Singh, Zoho’s advantage over its bigger rivals is that it does not run ads or sell customers’ data to third parties.

In 2023, Zoho experienced significant growth in Nigeria, with a 50% year-on-year increase in its user base, while its revenue from South Africa surged by 73%, as indicated by Bourne. However, the company declined to disclose the exact number of users or the revenue generated from Africa.

According to a Zoho spokesperson speaking to the Rest of World, the company's clients in Africa encompass various entities such as the Kenyan lifestyle app Pesapal, South African fintech Payfast, and events ticketing portal Quicket. Moreover, Zoho's overall annual revenue has surpassed $1 billion.

But despite its initial success, Zoho doesn’t have the same support for the local developer ecosystem as Google does in Africa, according to Prosper Otemuyiwa, a Nigerian software engineer and co-founder of ForLoop, an African nonprofit developer community. “They don’t have enough goodwill yet,” Otemuyiwa said. “[Google] has built an ecosystem of tools and support, [and] users are likely going to hesitate before clocking out of [it], just as people would rather pay for an Apple product just to remain within that ecosystem of tools.”

Since 2021, Zoho has enabled African businesses to purchase its software using local currencies. This strategic move has played a significant role in Zoho's success in Africa, according to Kehinde Ogundare, the country director for Nigeria. By offering this option, Zoho has empowered customers and potential clients to circumvent regulatory obstacles associated with dollar transactions, thereby facilitating smoother transactions and fostering growth in the region.

“We saw the rise in adoption of Zoho technology in Nigeria when we started pricing in local currency and building a local support team.”

In comparison, African companies can pay for Google Workspace only in dollars and euros, as verified by the Rest of World.

“As long as there’s a naira equivalent for anything that’s coming in dollars, Zoho will win,” Adewale Yusuf, co-founder and CEO of edtech startup AltSchool Africa, told Rest of World. “They have great products and pricing — what’s left is to build trust and engage in strong marketing activities to completely shake out the big guys.” Yusuf, who has co-founded three startups, said all his companies now use at least one Zoho product.

Zoho has adopted an assertive pricing strategy in Africa as well. For instance, Zoho One, a comprehensive bundle comprising over 45 products, is priced at just $6.70 per user in Nigeria, significantly lower than the $30 charged in other parts of the world.

“Cost is the biggest driver for me,” Neto Ikpeme, founder and CEO of Nigerian health-tech startup Wellahealth, told Rest of World. Ikpeme had opted for Zoho over Google when he launched his company in 2016. “We know that it’s difficult enough to access dollars, and if you can, you might want to reserve it for other services that you can’t pay for locally,” he said. But the low pricing may not be enough for Zoho to dethrone its larger rivals. Users told Rest of World the company’s products lack sophistication.

“Zoho hasn’t done a design upgrade in a while and it is starting to get a little bit stale. They also need to have better mobile apps,” said Vijay Anand, an Indian angel investor and founder whose startups use Zoho. When he tested Zoho’s new Slack-like service, Cliq, Anand was disappointed by the lack of emojis and GIFs. “It’s the one happy thing the teams have,” he said.

ForLoop’s Otemuyi said Zoho lacks a developer community that can support its products in Africa. “There’s no strong community to leverage when you run into a problem,” he said. “Google has that in abundance and across the continent in terms of developers, startups, and IT professionals generally.”

Zoho is collaborating with local business communities, as well as with incubators, accelerators, and venture capital firms, to address this challenge, as highlighted by Veerakumar Natarajan, the company’s regional manager for East Africa, in conversation with Rest of World. For instance, in Kenya and South Africa, Zoho has partnered with startup incubator hubs such as J-Hub Africa and Silulo Foundation, respectively, according to Natarajan.

“Google is a lot bigger than we are in terms of size,” Singh said. “But our portfolio, with a spread of 55-plus apps, is the most prolific in the industry, owing to our bullish focus on [research and development].” He said some customers might use only Zoho, while others might use it along with Google’s products to meet different needs. “It takes each of a kind to make a village,” said Singh.

Image source: Rest of World