Announcement and Market Alignment
Zoho, the Indian software company, has announced a price adjustment for its Nigerian users. This adjustment is designed to align with current market conditions in Nigeria. In an email sent to Nigerian users, the company stated that the updated pricing structure will take effect in August 2024. This change aims to “ensure the sustainability of high-quality services.”
Reasons for Price Adjustment
Kehinde Ogundare, the company’s country manager, confirmed that the price review is necessary due to the rapid devaluation of the naira. The naira has depreciated from ₦350 to $1 to about ₦1500 in less than two years. He mentioned that the decision to update prices had undergone months of internal deliberation before notifying users.
Impact on Nigerian Startups
The devaluation of the naira has led Nigerian startups to increasingly consider local alternatives. In February 2024, Techpoint Africa reported that the founder of Alvative, a Nigerian talent sourcing company for junior developers, began moving his team’s operations to Zoho. This shift away from Google products marks a significant change, as Google had been integral to their personal and business requirements for nearly two decades.
Historical Pricing Context
Kehinde noted that the company waited four years before implementing a new pricing structure despite the country’s economic conditions. He explained that the price for Nigerian users was fixed in 2020 following a Central Bank of Nigeria (CBN) policy that made it difficult to charge consumers in dollars. “We pegged the price of the One suite at ₦7,500. At that time, that was about $6. Compared to the $30-$35 paid by users in other countries, that is a significant reduction. We are not charging that amount even in other African countries where we have operations—Kenya and South Africa,” he added.
Previous Global Price Changes
In 2021, Zoho announced a price change that applied to all global geographies and regions, excluding Africa, South America, Latin America, China, and Japan. The company emphasized that the exempted regions and countries would not see a price increase at that time.
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Growth and Embrace of Cloud Technology
In November 2023, Zoho revealed a growth of 50% in the preceding year. Ali Shabdar, Regional Director, MEA, Zoho, described this growth as a direct result of Nigerian businesses embracing cloud technology. He highlighted the adoption of unified platforms to digitally transform and build resilience to adapt to challenging market conditions.
Zoho’s strategic decision to adjust prices reflects its commitment to maintaining high-quality services while adapting to the economic realities of the Nigerian market. This move, though challenging for some users, underscores the company’s dedication to sustainable growth and innovation in a rapidly evolving landscape.