For now, Zoho will continue charging customers in local currency in Nigeria and Kenya amidst surging inflation.
Zoho, the Indian cloud company that began expanding to Africa in 2019, will continue charging its African customers in their local currencies despite significant currency devaluation in those markets. The company will, however, not rule out price increases in the future.
“We are not going to change how we bill our customers at all,” Veerakumar Natarajan, country head, Zoho Kenya, told TechCabal.
With rising business costs, some companies have substantially reduced their expenses. However, per Zoho, which launched a local office in Kenya in May 2023, its partner network jumped by 212%, partly because customers continue to use its products since they pay in Kenyan shillings. “Customers are happy to stay with us because we charge in Kenya shillings. This is not the case with rivals, who bill their clients in US dollars,” Natarajan added.
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Zoho said it uses a local currency billing strategy in key African and Middle Eastern markets. The approach allows clients in Nigeria, South Africa, Saudi Arabia, and Dubai to pay for Zoho’s customer relationship management software in their local currency. Natarajan said, “In Africa, our strategy is different because we charge in local currency and extend a discount as well.”
When it set its price for Kenyan customers, the exchange rate was KES 100 to the US dollar. Currently, the currency has depreciated to KES 146 to the US dollar. According to Natarajan, the weakening Kenyan shilling may compel Zoho to revise its product prices upwards, but there are no such plans soon. For now, Zoho said it can offset the weakening Kenyan shilling by attracting more customers who pay in local currency.
As the Kenyan shilling weakens, businesses are concerned about the safety of their dollar-based earnings. Fears include lower income, instability, and compromised livelihoods. Kenya Power, a power distributor, is facing KES 3.19 billion in losses and is considering switching to USD billing, raising concerns about the future of the local currency.
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