Zoho, the Indian cloud company that initiated its expansion into Africa in 2019, has announced its decision to continue billing its African customers in their respective local currencies despite the significant devaluation experienced in these markets. The company, however, does not rule out the possibility of implementing price adjustments in the future.
Veerakumar Natarajan, Zoho Kenya’s country head, confirmed to TechCabal that they have no plans to alter their billing approach for customers. Despite escalating business expenses, Zoho has observed a notable surge in its partner network, which expanded by 212%. This growth is attributed in part to customers’ preference for Zoho’s products due to their ability to pay in Kenyan shillings, unlike competitors who bill in US dollars.
Zoho adopts a local currency billing strategy across key African and Middle Eastern markets. This strategy enables clients in Nigeria, South Africa, Saudi Arabia, and Dubai to procure Zoho’s customer relationship management software using their local currency. Natarajan emphasized, “In Africa, our strategy is different because we charge in local currency and extend a discount as well.”
When Zoho initially set its pricing for Kenyan customers, the exchange rate stood at KES 100 to the US dollar. Presently, the currency has depreciated to KES 146 against the US dollar. While the weakening Kenyan shilling may prompt Zoho to reassess its product pricing in the future, there are no immediate plans for such adjustments. Zoho believes it can counterbalance the impact of the depreciating Kenyan shilling by attracting more customers who pay in local currency.
As concerns mount over the weakening Kenyan shilling, businesses are apprehensive about the stability of their dollar-based earnings. Fears include reduced income, economic instability, and potential livelihood challenges. Kenya Power, a prominent power distributor, is grappling with losses amounting to KES 3.19 billion and is contemplating a switch to USD billing, raising apprehensions about the future of the local currency.
Source: TechCabal