How Vanoma boosts influencers' income

The influencer marketing space is an ever-growing industry. Today, it is a multi-billion dollar industry, with statistics indicating that it is expected to grow to be worth $21.1 billion (sh 3.08 trillion) in 2023.

This is according to the Benchmark global report on the state of influencer marketing 2023.

The Internet simply describes Influencer marketing as a celebrity or public figure endorsing a product or service.

Today, based on how the Internet has evolved and is continuing to grow, a lot of businesses are engaging influencers to push their product and improve brand awareness among target audiences, especially younger consumers.

Most influencers usually have specific niche topics from which they create content to engage their online community.

According to a dipstick survey by GeoPoll in 2020, the most popular influencer categories in Kenya were lifestyle influencers (67 per cent), fashion influencers (64 per cent) and tech influencers (58 per cent).

Other categories included political (55 per cent), travel (47 per cent), food, (46 per cent) and gossip influencers (33 per cent).

The survey said influencers are expected to produce their own content in engaging ways, such as video posts or live chats.

Product reviews were the most influential form of post in Kenya, standing at 23 per cent.

“This is, perhaps, because consumers are normally looking for detailed information about products before they buy,” the survey read.

“The search for authenticity and connection with the influencers is also evident, with live videos scoring 17 per cent of the total responses.”

Other most-effective influencer content categories included brand mentions in posts (14 per cent), pre-recorded videos (13 per cent), lifestyle pics of the influencers (12 per cent), pictures of the product (11 per cent) and giveaways (8 per cent.)

Globally this year, 61 per cent of brands said they worked with the same influencers for their campaigns, whereas 39 per cent claimed to work with other influencers.

“Clearly, brands prefer to build relationships with existing influencers rather than go through the entire influencer selection process every time they run a campaign,” the Benchmark report said.

“Of course, some firms will have a range of influencers they call upon, depending on the nature of a particular campaign, the products they are trying to promote and the target market.”

On the most-preferred influencers to work with, 39 per cent of brands globally chose nano-influencers (1K-10K followers) as their most likely partners, followed by 30 per cent opting for micro-influencers (10K-100K).

The report further indicated far fewer brands chose to place their focus on larger influencers, with 19 per cent opting for macro-influencers (100K-1M) and 12 per cent mega or celebrity influencers.

“This possibly reflects the reality of a small to medium-sized business. You simply can’t afford the fees charged by macro and mega-influencers,” it further read.

Narrowing it down to Kenya, conversion-based platform Vanoma targets brands and retailers by providing them with a platform that makes influencer marketing easily accessible, while providing nano-influencers with a sustainable income.

Simply put, the startup is a web-based solution that helps brands, retailers, and influencers earn money by advertising beauty products.

EYEING KENYA

Anselme Mucunguzi is a 31-year-old Rwandese entrepreneur who saw an opportunity in Kenya’s influencer marketing sector with a specific interest in beauty.

The Vanoma co-founder said he noticed some gaps when it came to influencer marketing for beauty brands and influencers in Kenya.

He said for nano-influencers, it usually becomes hard for them to promote beauty products they use and earn a commission once a purchase has been made by their followers.

Equally, for brands, he added, most of them usually lack marketing budgets.

“Through some of the engagements we have had with brands and retailers in Kenya, we have noticed that some lack a marketing budget,” Mucunguzi said.

“This generally affects business for them as they are unable to track how, when they pay for that IG story, it impacts their Return On Investment (ROI).”

“On the same level, there are nano-influencers who are ready to put in the work by making authentic content and genuinely earn a sustainable income, but they lack that platform.”

Mucunguzi said to address the numerous challenges faced by the different parties, they developed Vanoma to maximise profitability for all.

Through the platform, he said, local brands, as well as retailers, are also linked to nano-influencers who love and use their products.

“From what we are seeing, the Kenyan beauty industry is growing rapidly. In the last four years, there has been growth of close to 400 per cent,” he said.

“It is also estimated to be about Sh20 billion, and that is a huge market. We saw this as an opportunity for us.”

Vanoma is run by a team of seven members, three of whom are the co-founders: Anselme Mucunguzi, Christine Kawira and Theophile Nsengimana.

Mucunguzi said that once linked through the platform, brands and retailers can track how much sales are coming from partnerships with different influencers.

For the latter, they promote products they use on a day-to-day basis and leave reviews for their followers who are interested in the products.

He added that bigger brands, such as Nivea, Unilever and L’oreal, have huge marketing budgets, but smaller ones are resource-constrained.

Through the linkages, they can create budgets that fit their budget.

“This is a win-win for all. It brings a level of clarity that enables even smaller brands and retailers to work with as many influencers to bring awareness to their products and services,” he said.

“In our entry to Kenya, we have seen that the beauty industry is growing rapidly and consumers are asking more, ‘Which products am I using? What active ingredients are there?’ And we see a lot of growth in that area.”

The Vanoma online platform is currently very active and has been operating in Kenya since September 2022.

It was built and developed in Kenya based on the idea of a delivery platform the team has in Rwanda.

MAKING MONEY

Vanoma has 100 Kenyan influencers as well as more than 10 local retailers and six beauty brands that they work with.

Mucunguzi said they are still in talks with a number of retailers and brands to bring them on board.

Through the platform, brands and retailers pay a commission based on sales they receive.

“When one pays a certain amount of money through our platform, they do so because they have received the sales reach they budgeted for when it comes to influencer marketing,” Mucunguzi said.

He said companies usually pay a 15 per cent commission, where 10 per cent goes to the influencer and the 5 per cent goes into running the platform as well as other operations.

Mucunguzi said that they support influencers by helping them create virtual stores on Vanoma of the products they use.

These influencers then get links that they tie to their content-based social media accounts that can be accessed by their following community.

Whenever a purchase takes place, they can track the number of people who buy products through their link.

“This creates visibility on the part of the brand based on what they are paying for and the influencer in what they are getting,” Mucunguzi said.

Every Friday, influencers withdraw their income directly to their M-pesa accounts.

“In the future, we plan to onboard bank payment,” Mucunguzi said.

There are some basic requirements that must be met before one is recognised and is on board as an influencer on the Vanoma platform.

These include having a public account on Instagram, TikTok or YouTube, being publicly recognised as a content creator who posts engaging content on a regular basis, and having at least 5,000 followers on the platform that has the most online following engagement, based on likes, views, shares and comments.

Once all the basic requirement checkboxes are ticked, influencers then proceed to fill in and submit an online application form, requesting to be on-boarded to the platform.

“We usually ask basic questions, like why you would want to become and influencer on Vanoma, and ask that you share links to your social media accounts,” Mucunguzi said.

“We have experts on our team who have been working with influencers for more than seven years, who assess and authenticate if someone is an influencer and regularly makes content that is engaging.”

He said they usually conduct daily online calls with influencers to assist with any challenges they may face.

“Reviews made by the influencers are public information,” Mucunguzi said.

“This helps buyers read reviews from influencers they relate with and then decide if they want to purchase something or not.”

Vanoma normally signs a three-month contract with every influencer they bring on board, which can be reviewed at any given time.

The Digital Asset Tax (DAT) introduced by Finance Act 2023 has posed a direct challenge to Vanoma’s commission-based revenue model.

Mucunguzi said the tax has narrowed their profit margins, making it more challenging to sustain the business and adequately compensate influencers.

“In response to this, we have revamped our accounting processes and explored cost-cutting measures, including a re-evaluation of our pricing models,” Mucunguzi said.

“These adjustments allow us to maintain our staff and continue with the fruitful partnerships with influencers and beauty partners, albeit within a tighter financial framework.”

WEB-BASED OPERATIONS

When they began operations in Kenya, Vanoma first met with brands and retailers to find out some of the challenges they faced when it came to influencer marketing, and how they could be solved using technology.

Mucunguzi said they also involved influencers in a different forum, who expressed overwhelming interest in their solution.

“We engaged quite a number who said they have never come across a solution where they have been given a chance to select products they want to promote,” he said.

He said the response from influencers has been varied.

“We have engaged with macro and mega influencers who are doing pretty well and feel like for them, all they need to do is post a story and they make good money,” Mucunguzi said.

“We are, of course, working with a few of them, but we are trying as much as possible to work with up-and-coming influencers who see this as an opportunity to earn a sustainable income through Vanoma.”

As the company initially had its operations in Rwanda, Mucungzi said transitioning to Kenya has been quite easy.

There are, however, plans to expand their market as they are targeting South Africa.

“As an entrepreneur, when you are building something new, there can be a lot of uncertainties, but for us, Kenya is the right market,” he said.

“At least I think there is no language barrier as Swahili is not that hard because I can walk into a banda and ask for food.”

Mucunguzi said a challenge that they foresee is network connectivity.

As the platform is web-based, he said, their current focus is whether or not someone can access Vanoma over 3G internet connectivity and if they can access the service with mobile data that is as low as 10Mbs.

“In the future, we might look into launching an app but at the moment, the web-based platform is mobile friendly and doesn’t affect customer experience in any way,” Mucunguzi said.

“We see Vanoma expanding and, until we are sure of other sectors, I think we could venture into influencer marketing for wellness or even electronic products.”