It’s inevitable that smartphone adoption in the South African market will eventually reach a tipping point.
Supporting this viewpoint, is the fact that one of South Africa’s largest telecoms operators will only sell smartphones from 1 January 2015 and with cheaper smartphone handsets coming onto the market it’s only a matter of time… and probably in less time than we think.
This will permanently change the mobile marketing landscape in SA, so I thought I would take a stab at tabling my thoughts on how this inevitable tipping point, will change the consumer engagement landscape from a mobile perspective:
1) Existing offline behaviour will be accelerated through mobile
In this post I wrote about the behaviour of mainstream consumers in the context of stokvels and the opportunity to secure a R1 billion investment fund through mobile enabled stokvels.
The model I presented would change considerably, if the 11.3 million stokvel members could manage their stokvels completely through a smartphone application. With the continued developments in the mobile payments space, the smartphone application could easily be integrated with point of sale (POS) systems, thus enabling retailers for example, to offer coupons or discounts on produce as part of the cash materialisation component.
The app could further be used to facilitate stokvel monthly meetings and associated communications between stokvel members and even integrate relevant partner offers and promotions e.g. Layby focused stokvel offers from Ellerines Holdings/African Bank.
2) A potential ‘war’ between banks and telecoms companies
When one looks at mobile focused value propositions from telecoms companies and banks, there seems to be a form of convergence happening.
FNB for example is offering mobile devices and tablets to their customers as does the likes of Vodacom, MTN etc. Similarly, FNB offers an eWallet solution while Vodacom has mPesa. It must be said however, that while these mobile solutions are not exact copies from a product functionality perspective, the territory of mobile wallets is most definitely in play.
As a result of smartphone penetration, there will be a huge consumer driven demand for data and content related services and when one looks at who is doing what in terms of data offers, once again we have banks and telecoms companies playing in the same space.
Consumer demand for market related services always drives market competition, and with these powerhouse brands playing in this space simultaneously (and given their huge budgets), there is inevitably going to be some very interesting movements in context of mobile within the mainstream market.
Typically when this kind of competition comes to the fore, the consumer benefits massively through things like cost reductions, improved connectivity and the like, and this will only cause to further stimulate the demand for these services on the mobile channel.
This is a very interesting space to watch….
3) Advertising budgets will shift towards mobile rewards
South Africa is largely a prepaid market today, but let’s assume for a moment that the majority of the market now has a smartphone.
It is highly unlikely, that this will shift the mainstream consumer mindset (or the demand) away from prepaid and towards fixed term contracts, and it’s this status quo in terms of mindset orientation that lends itself more so towards rewards, than say price or bundle focused offers.
Let’s take Jana for example – their entire business model is based on the premise of shifting advertising dollars towards mobile rewards across Africa and today they are a $1.5 billion company.
There are very obvious dichotomies between other developing African mobile economies and our own, and for me at least, Jana is proof that advertising budgets will slowly shift away from mobile advertising and towards mobile focused rewards.
4) We’ll see an increase in black entrepreneurship
Whether by by nature or by necessity, the typical mainstream consumer, is incredibly entrepreneurial and one only needs to visit the streets of Soweto or Zanzibar to see evidence of that. There are many street vendors who have setup successful businesses offering services in relation to the mobile phone, and often times enjoying a monopoly on certain elements of the value chain e.g. airtime purchasing and phone repairs within townships.
Due to the inevitable flood of cheap smartphone devices onto the market it won’t take long for more service related businesses to spring up – an obvious business opportunity I see, would be to have a branded van offering smartphone repairs and a free smartphone recharge service within townships.
5) Brands will invest heavily in segmented owned media smarpthone applications
The demand for high-quality content supporting communities of interest within the mainstream market will increase dramatically, and one needs look no further than the current dynamics in play within more established mobile economies to see evidence of this.
Of course, brands will want to capatilise, but having a single branded smartphone application just won’t cut it. In order to meet the expectations and demands of these ‘tribes’ brands, to a degree, will be forced to expand their brand presence across segmented owned media smartphone applications.
Perhaps the best example of a brand servicing a community of interest like this is Soccer Laduma, which currently is the busiest mobile site in the country.
How do you think the mobile landscape will change?