Friday Team Talk – M-commerce in South Africa: A Market Full of Opportunity
Meet MobPartner Account Manager, Jhane Soni Benga, who takes to the Friday Team Talk stage this week to share her inside knowledge on the future potential of the M-commerce market in South Africa.
“As an account manager I’ve had the chance to observe the evolution of our advertisers’ requests in terms of the ad campaigns they want to promote with us.
In the last two years, a vast array of exciting products have emerged, starting with WAP offers first, following by the boom in mobile contents leading up to the amazing rise of gaming applications we see today.
Alongside this evolution, m-commerce entered into the market and we started to collaborate with worldwide brands willing to promote their sites and applications with us. As this trend is quite new and holds huge potential, I wanted to look more closely at the case of m-commerce, with a particular focus on South Africa, which was the subject of a thesis on mobile marketing I carried out three years ago.
Before all that, how do we define m-commerce?
M-commerce (mobile commerce) is described as “the buying and selling of goods and services through wireless handheld devices such as mobile phones or personal digital assistants (PDAs)”. According to the Business Insider, m-commerce only represented about 3% of e-commerce in 2011. Since then, this number has increased rapidly to reach 11% last year. This percentage could even hit 15% by the end of 2013 thanks to the entrance of new players launching shopping apps into the market.
Globally the trend is very positive, but is this same for South Africa?
South Africa is one of the most populous countries in Africa and it has the highest mobile penetration and teledensity (number of telephone connections for every hundred individuals living within an area) in the Sub-Saharan Region, with over 50 million connections. In addition, the country is gathering several assets making this market a real opportunity for mobile retailers:
- The country has one of the largest mobile markets in the world and has managed to rank at 4th place following Indonesia, India and USA respectively.
- Feature phones in South Africa account for nearly 90% of all telephone lines and the country has a 100% penetration rate.
- According to the “World Wide Worx Mobile Consumer in SA 2012” survey, approximately 7.9 million South Africans access the internet with their mobile device, compared to 6 million through traditional PCs. Furthermore, 2.48 million people are using their mobile solely to access the internet.
- The same survey found that currently more digital goods are being bought over mobile phones than physical goods. However, the rate of growth of non-digital products is rising at a faster rate than that of digital products.
What are the challenges South Africa has to face?
To catch up to other more mature global m-commerce markets, South Africa has to face some challenges:
- The penetration of smartphones in South Africa is quite low with only 8.5 million South Africans owning one out of a population of over 51 million people. This explains the slow rise of m-commerce in this market.
- South African consumers have not yet reached the same level of comfort with shopping on their mobile phones as their counterparts in countries where m-commerce is a part of everyday life.
- Current available online payment options are not as widely used in South Africa.
- Technically speaking, developers have yet to deliver a suitable mobile experience for this unique market which will encourage the growth of m-commerce.
Once these challenges have been overcome, South Africa will count as a major market full of opportunity for mobile retailers.”
After completing her degree in International Business Management at business school, Jhane joined MobPartner in 2011. Coming from a commercial background, she moved towards her career in the mobile industry after working in a mobile marketing agency and also having carried out a thesis on mobile marketing with a special focus on South Africa. This calm and positive girl is now a member of the MobPartner Account Management team.
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