African opportunities at Mobile Commerce Executive Forum

Mark Bannerman

Mark Bannerman, director at MicroStrategy South Africa, says local businesses have a clear opportunity to expand their reach into the mobile commerce market, secure and retain customers. Now is the time for South African companies to establish a mobile identity, run targeted mobile promotions and leverage social media to engage the growing mobile commerce market seriously.

He refers to the Mobile Life 2012 Study, which reveals that 50% of the world's phone owners are interested in mobile banking services or are using them already, whilst 45% show the same level of enthusiasm for making payments via the phone.

"We know companies are struggling when it comes to adapting their strategy to new paradigms like Big Data, cloud computing, mobile and social media. We are now ready to show organisations how they can embrace these technology trends and extend their business intelligence applications," says Bannerman.

Engaging with this market, particularly in terms of Africa's increasingly competitive arena, requires overcoming specific challenges.

African challenges

According to Bannerman these include low smartphone penetration (there were estimated to be 8.5 million smartphone users in SA in 2011), limited availability of payment options, consumer comfort with shopping via the mobile phone and a general lack of understanding on how to deliver a suitable mobile experience.

However, despite the challenges, statistics point to anticipated upward curve in growth within the South African ecommerce market.

"Firstly there are more cellphones than people. According to the 2011 GSM African Mobile Observatory report, there are 59.5 million mobile phones in South Africa. That is a penetration greater than 100% (given the country's population estimate of 50.5 million). The Economist says there are three mobile phones for every four people in Africa. Secondly, more users access the internet via their phones than via traditional desktops. In South Africa, approximately 7.9 million access the internet through their cellphones, just over 6 million through traditional PCs and laptops and 2.48 million users solely use their cellphones to access the internet."

The company will utilise its presence at and contribution to the Mobile Commerce Executive Forum to help define the market and provide some advice to those wanting to enter the space. It is important for would-be operators to investigate robust and flexible frameworks to adapt the business as the market matures.

Continuous improvement of apps

"Custom development requires more administration and maintenance and therefore has a high total cost of ownership. It is equally important to ensure that you can provide maximum security and that your selected framework supports multiple mobile security technologies. An analysis of mobile commerce data will ensure continuous improvement of apps and, that way, will secure customer satisfaction and loyalty."

Whilst the value of mobile banking services to emerging markets has been well established, in reality mobility reveals a strong and occasionally surprising divergence between one group of countries that are highly engaged with the concept and another group that have very little interest in it.

"Those markets that are highly engaged are made up predominantly (although not entirely) of rapid growth markets and includes South Africa, Kenya, Uganda and Nigeria as well as China, Vietnam and Mexico. Across these markets, 41% of mobile owners have no prior access to banking services - and in their enthusiasm for mobile banking, consumers appear to recognise an opportunity to fill this gap. To meet this demand, mobile banking providers must be ready to build from the ground up, addressing a lack of familiarity with banking in general and often providing basic financial services for the first time," he concludes.