Introduction
The business climate of Somalia is rapidly changing, driven by digital change, increased global engagement, and greater demand for digital driven services identified as sectors that have the potential to provide future market opportunities for Somalian entrepreneurs. This paper will look into recent opportunities and challenges arising in the digital market, the growth of the dairy market sector of Somalia, and the tactical way entrepreneurs can operate domestically and internationally.
The Digital Market: the bedrock of modern growth.
E-commerce, mobile scheduling, and online marketing are becoming more commonplace in Somalia’s urban centers including Mogadishu, Hargeisa, and Kismayo. Small and medium businesses are now expanding into the digital marketplace. Online Apps and mobile payment options such as EVC Plus and ZAAD mobile money are helping to realize this potential.
Companies such as Dahabshiil and Hormuud Telecom have invested heavily in digital deep infrastructure and supporting small enterprises with capital and training which prepared market entrants and helped established local businesses.
Government institutions are constructing beneficial e-commerce regulatory frameworks including tax exemptions, simplified registrations; and data protection, but inconsistency in implementation poses challenges.
Technology & IoT: The Future is Here
Customer behavior analysis through big data is helping companies build more tailored marketing approaches. In Somalia, the improvements it enables in the efficiency of data-focused campaigns will, by the end of 2025, have dramatically improved awareness.
Remote monitoring with sensors and IoT devices in dairy/livestock farming can respectively monitor moderate conditions, hygiene, and productivity. Monitoring technologies can benefit productions and the health of animals with uplift of potentially 20%.
Blockchain technology is being tested to track the origins of dairy products from pasture to plate, increasing consumer confidence and initial trials underway in Sool and Sanaag.
The Market for Dairy in Somalia: Promise & Challenges
The dairy industry in Somalia is growing with solid prospects. Somali Diaspora in Europe and North America are beckoning business opportunities to Somali dairy products due to the significant interest in lactose-free and A2 milk.
Programs supporting dairy business or development by UNDP and FAO have improved training, access to veterinary services, and hygiene control throughout Somalia, resulting in a sustained estimated monthly increase of milk production by between 15-20% from 2024.
Some Somali dairy enterprises have recently passed international export standards, while training and infrastructure remain a challenge for smallholder dairy farmers to certify global standards, enter new markets, and participate in value chain organizations.
Business Strategies for 2025 and Beyond Businesses must invest in strong digital marketing strategies. These include websites, apps, SEO, and social media. One Somali dairy brand implemented a marketing strategy and in just one month later had increased sales by 50%, based on their marketing campaign with Instagram and TikTok.
Farmers, companies, and banks can partner to improve resources, access to capital, and access to markets. This approach promotes collective growth and collective sustainability.
Mobile money (EVC and ZAAD) reduces dependence on cash, helps reduce risk, and helps promote transparency. There is still limited infrastructure for internet and mobile technology in the countryside and it lags behind urban areas in terms of mobile and internet access industries, which are essential to the broader economy.
Challenges & Solutions
Political instability and a lack of infrastructure (especially electricity and internet) present serious barriers to business. The solution lies in private investment, along with international support, in renewable energy and digital connectivity.
Many of the entrepreneurs and workers do not have formal training regarding accounting, digital tools, and data security. Similar to the data literacy concepts, businesses and training institutions must ramp up effort to build digital literacy.
Some ambiguity around the legal frameworks surrounding online commerce, taxation, and consumer rights may inhibit investment. Somalia should establish e-commerce laws to standardize the practice of doing business online while developing confidence in the business community.
Key Recommendations
For the entrepreneurs, it is important to familiarize themselves with new technologies such as IoT, blockchain and artificial intelligence, if they intend to remain competitive and scale up.
Targeted investments in key priority sectors such as dairy and livestock, along with attractive digital service platforms will help build business that may be appealing to local and international investors for long-term growth.
Companies need to have a clear understanding about the processes they need to enact, especially if potential investors will want assurances around taxes, online transaction fees, and rules about handling data. If mobile payment systems could be linked through the use of an API with other digital platforms and businesses could avoid set-up costs for these businesses, then mobile payments would be easier.
It is critical that digital marketing, accounting and cyber-security training occur regularly with staff, if they are business can run more efficiently and allow for international recognition for quality, food products.
Future Outlook
For Somalian companies promoting health-oriented dairy products, they would be able to distinguish themselves with the large international marketplace. A company that uses personalized marketing techniques using customer behaviour data will be able to increase loyalty and revenue. An e-commerce business that uses blockchain technology to enhance the chain of product traceability and product quality, will assist in building trust with consumers. Once Somali dairy products are sufficiently certified , they could ease into the regional and European market.
Conclusion
Somalia’s business sector sits in a transformative moment in time. With smart investments in technology, infrastructure and staff training Somalia , would be hard pressed to find greater economic opportunities. Businesses that can change and adapt to take advantage of their opportunities using creativity and collaboration towards quality and innovation will find the future rewarding and bountiful, both locally and internationally.
