Posts Tagged ‘smartphones’

Cognitive dissonance and smartphones in East Africa

via twitter, a modern day kanga from East Africa

Its jarring to see high level INGO messaging still talking about “ICT4D” not doing it’s part to bring about technology driven transformation in rural or informal sector Africa when every other sign from the continent points to a mainstreaming of ICT that goes beyond the individual’s capacity to tweet.

The kanga is a traditional item of women’s clothing worn all along the Swahili coast of Eastern and Southern Africa. Probably originating from the monsoon driven textiles trade with the west coast of India long ago in the mists of history, the kanga is rather well known for incorporating Swahili proverbs and aphorisms within its design.

While traditional sayings might refer to love or social relationships, warnings and idiomatic sayings, this photograph of the kanga, now making the rounds on social media, which I’ve shared above, provides clear evidence of the ubiquity of smartphone technology and social media communication in local culture.

Surely your screenshot is waiting in your inbox isn’t a traditional proverb nor an age old Kiswahili aphorism.

Untapped opportunities in Francophone Africa for design of apps and smartphone solutions

Bacely Yorobi shares challenges at the AfDB Innovation Weekend, Oct 2015 Photo: Niti Bhan

Bacely Yorobi shares his challenges at the AfDB Innovation Weekend, Oct 2015  Photo: Niti Bhan

Bacely Yorubi frames the opportunity space for local app design and development in The Toronto Star:

“Lots of young Africans who’ve studied elsewhere and returned home have expectations of mobile services that don’t yet exist,” said Bacely Yorobi, an app developer from Ivory Coast. “So they’re the ones coding and putting new African-made apps out there.”
[…]
“Africans don’t like to put their money in the bank, but they will put it in their phone,” said Yorobi.
[…]
“We have everything we need to build an app, but we don’t have the support to bring it to market,” said Yorobi, during a trip to Paris to court investors.

I find it all the more interesting from the francophone West African perspective, as the nascent tech industry races to catch up with their anglophone neighbours in Nigeria, Ghana and Kenya. Given the waves being made by world class outfits such as Cameroon’s Kiro’o Games, or Senegal’s rapidly maturing tech ecosystem, one might discover they’ll outpace the competition given time and support.

Bacely’s comments also make me wonder why the global giants pushing financial inclusion in Cote D’Ivoire and other WAEMU countries aren’t looking for local partners and developers, given their ongoing struggles for traction. Perhaps its time to discover that not everything imported from abroad is always the best solution.

Why am I so excited about an African hair style app released on smartphones?

tumblr_nzd9xeVbDO1qghc1jo2_250Darling, the pan African hair extension brand owned by Godrej of India, has just released an app in Nigeria aimed at helping customers choose their latest hair style on their smartphone. The implications are enormous, imho.

Mobiles are ubiquitious. E-commerce in Nigeria is becoming commonplace. Smartphones are default. The African consumer market is sophisticated in its own inimitable way. The hair extension industry is as informal a sector as you can get. Digital Africa straddles this complexity and exemplifies the Prepaid Economy.

It really should be considered a wake up call to the ict4d & m4d industry to rethink their assumptions on “poor Africans” and their cellphones.

Tsunami of change – design, brands, marketing and the mobile phone

In the 10 short months since I wrote on the market forces influencing the global mobile phone market, and the implications of the democratization of innovation whose early, weak signals I could already foresee, matters have come to a head. I had written:

The locus of innovation in handset design, product planning and market strategy has moved its center away from the erstwhile first world to the former developing world i.e. India and China.

And along with this re-centering, ideas on business models and profit margins have changed to reflect those prevalent and appropriate for these new operating environments. Just look at this statement from Xiaomi’s Hugo Barra from an interview last week:

“Innovation is not a luxury item. Innovation is for everyone.”

The implications of this positioning are enormous, particularly given the conventional wisdom currently prevalent in the industry that the latest, greatest, cutting edge technology is a much sought after premium piece of hardware.

What are the current manifestations of this seismic shift in the source and diffusion patterns of innovation?

The era of the Apple product/pricepoint strategy is over for everyone, including Apple. Big ticket flagship devices released to much fanfare and  the lining up around corners by fanbois may still continue to work for Apple but even for them the size of this target market has reached its limit. That is, they’ve captured all they could of the share of the market  likely to rush out to buy the latest, greatest shiny at whatever price.

IDC’s latest forecast for smartphone sales until 2019 has this little snippet tucked in:

Markets with the biggest growth opportunity are extremely price sensitive, which IDC believes will not change, and this is the main reason Apple will be challenged to take Android share throughout the forecast. Even if Apple were to introduce another low-cost iPhone (e.g., C version), IDC believes the price will struggle to compete with Android OEMs that are focused on portfolios aimed at price points of $200 and less. This isn’t to suggest that Apple’s success with the iPhone won’t continue, and IDC believes its efforts to maintain significantly higher margins compared to its competitors are much more valuable than chasing share.

The implication is that new entrants should focus on the “cheap smartphone for poor Africans or Indians” shtick. But this would be the biggest mistake any self respecting brand could make. The entry level segment is completely saturated with Shenzen makes, refurbs, grey market boxes, and a hodge podge of low end models from all and sundry. This is the commodification we saw coming 6 years ago.

Here is where I see an opportunity for a maverick like Xiaomi to capitalize on Hugo Barra’s statement that innovation is not a luxury but for everyone.

The growth markets might be price sensitive but they’re neither stupid nor resigned to their fate. Whether it was the poor man’s car – the Tata Nano, or the slew of wellmeaning first worlder’s introducing frugal low cost technology for the social and economic wellbeing of the downtrodden, the downtrodden have turned up their noses to it all.

Not since Nokia’s heydays has any brand succeeded by flaunting its low cost solution as its USP – and Nokia never flaunted their affordability, they just ran a truck over their phones and let you make a call after. You couldn’t help but realize it was worth the price, offering the biggest bang for your buck. Many of us still reminisce over teh good old days of long lasting battery power and rugged Finnish engineering.

In the past 10 years, everything has been changed by the rise of the internet and proliferation of social media. The connected consumer’s aspirations have found their own level, like water, on a global scale.

People have learned that affordable phones don’t feel necessarily cheap

There is no tradeoff to be made if you’re in the market for a new smartphone. This is the result of the democratization of design, exemplified by Xiaomi, and the result of the race to the bottom of the pyramid. Growth markets are part of the prepaid economy, and the considerations around brand positioning, price point and marketing strategy are not what you have been led to expect.

Here are most demanding customers on earth, operating in the most challenging environment. The mass majority for mobile phones isn’t localized anymore, not even on a regional or continental level – its global. And this is tailor made for affordable innovation, a customer experience that makes you feel as special and as unique as any fanboi without the accompanying price tag.

Only two to three years ago, Xiaomi was just a copycat. Ignoring Xiaomi’s ambitions is a big reason why Samsung is now facing a crisis.

Now, we have to ask serious questions: “Who are you, Xiaomi?” and “Where are you going?” Only when we figure out the answers will we know where we will be heading, too.

JoongAng Ilbo, July 27, Page 32

Just a quick search to see where they’re going offers up such tidbits as ordering a new Xiaomi phone online to be delivered by Uber. Who they are is what their competition isn’t – an opportunity seeking conglomerate leveraging gaps in the innovation ecosystem. Business models, marketing, distribution, design planning – they are re-inventing the conventional to suit the flexible, social, frugal world of the prepaid economy’s connected consumers. Its a whole new ballgame. As I said 10 months ago, the era of big brand cellphones manufacturers is over.

 

The Big Shift for Device Design

  • The market is global, local, social
  • Aspirations will drive purchase decisions
  • Innovation is not a luxury
  • Experience has a price tag

Introducing The Global Prepaid Economy

This week, that venerable newspaper The Financial Times, published an original piece of writing on the World Economic Forum’s Agenda blog. Its not a reprint from their own publication. It proposes the end of “Emerging Markets” (EM) as we know them:

Now, commentators say, it is the world’s mental map that is in dire need of an overhaul, particularly when it comes to the practice of categorising countries as “emerging” or “developed” markets.

The current economic hierarchy, which places emerging nations at the periphery and developed markets at the core of world affairs, no longer accurately describes a world in which EM countries contribute a bigger share to global gross domestic product than their developed counterparts, when measured by purchasing power parity. Nor does the capacious category, which lumps together countries of such diverse economic strengths as China and the Czech Republic, serve to illuminate crucially different realities between these nations.

“The EM term has outgrown its usefulness,” says Michael Power, strategist at Investec, a fund management company. “The term today embraces big and small, developed and under-developed, industrialised and agrarian, manufacturing and commodity-based, rich and poor, deficit runners and surplus runners, and I could go on,” he adds. At issue are not merely the niceties of symmetry and order.

As someone who has been looking at emerging markets, one way or another, for the past 10 years, both in my writing as well as in my work, this comes as a welcome relief. These markets can’t still be emerging, I thought, when I was in New Delhi at the beginning of June this year.

Yet, in some ways, we need the conceptual means to capture their dynamic potential, as they’re still in motion. As the article concludes:

These contradictions threaten to consign the term emerging markets to the dustbin. But if it follows the likes of “third world” into virtual extinction, its passage will raise the question of what, if anything, should replace it.

prepaid-globalgsma-2011-2013

The Global Prepaid Economy. (Data: GSMA Intelligence)

In November 1996, Vodacom South Africa was the first network in the world to introduce prepaid airtime on an Intelligent Network platform, which made it possible to debit customers’ accounts while they were speaking. Two years later, they went on to win the Global Mobile Award for the “Best GSM Service” for the VodaGo prepay system. Less than twenty years later, prepaid airtime is the dominant business model across the entire planet.

And, interestingly, if you look at the map above, the economies where the prepaid business model dominates are more or less those which were formerly known as emerging markets, frontier markets, developing countries and/or the majority of the erstwhile third world.

2014 prepaid data gsmaAcross emerging markets and developing countries, the preference for prepaid mobile services cuts across income range, socio-economic class or type of employment. Choosing to pay as you use seems to have little or nothing to do with regular paychecks, bank accounts, credit cards or age.  So vast is it that one can consider it an economic characteristic in its own right.

The global Prepaid Economy.

What do all the regions where the prepaid business model dominates have in common?

  • Cash intensive
  • Informal sector employs more than the formal
  • Still developing
  • More volatile
  • Higher uncertainty
  • Less social safety nets
  • Faster growth

What does the prepaid business model do for the customer?

It empowers them. Control over how much to spend (the amount), and its timing (the frequency and periodicity of purchases) is in the hands of the end user, the mobile subscriber. There’s no bill at the end of the month, to be paid by a deadline, for an as yet unknown amount. That is, there are no surprises.

Why does this matter?

In cash intensive operating environments, where expenses must be managed within the constraints of cash available on hand, the prepaid model offers manageable access to voice, text and data. Where the informal sector might be the source of employment for a greater majority of the population, uncertainty is a defining characteristic as incomes may be irregular, unpredictable and/or seasonal. That is, there is a greater degree of volatility to be managed. And, where there are fewer social safety nets to rely on, surprises in the form of a bill at the end of the month might make the difference between going hungry to bed or putting meat on the table.

In this series of articles, I’ll be taking a look at the nature of the prepaid economy and characteristics common across many geographies. Next part will look at the relationship between Time and Money.

New Delhi Notes 2015

I was in New Delhi for just over a week at the beginning of June, visiting after a period of 3 years, and so many things caught my attention that I thought I’d do a round up of my observations, just like I did 10 years ago.

smallebank
Systems implemented and working. The impact may not be visible to a first time visitor or someone living through it. Immigration at the airport didn’t need me to fill in a disembarkation card anymore. As a citizen with a machine readable passport, I was ‘in the system’ already. The bank was virtually empty. I’d never seen it so desolate until I noticed this e-Lounge next door. My request for a debit card was handled instantly and the card handed over. Yes, I can use it for internet payments too. Ooh, I’m now part of the Great Indian E-commerce boom.

smallbankSo, Sanjay tells me all about ‘those purchases you make and then they send it to your house and you can use Paytm’ – e-commerce, without ever once using the world Internet, e-commerce or speaking in English. His own commitments (the last baby turned out to be twin girls) keep him from splurging on a smartphone but he keeps a SIM with his Whatsapp and Facebook accounts to use on his friend’s phones. Sanjay is my go to “aam aadmi” or representative of the emerging Indian middle class, in the classical sense. He’s a blue collar worker in maintenance, with a motorcycle, consumer electronics and a daughter in private English medium schooling. He only has vocational training and high school equivalency certificates.

IMG_2219This startup received 9 million dollars in funding and splashed out with billboards in key neighbourhoods. Brother in law who’s head of McCann Erickson in India tells me its the classifieds they use. And yes, this ad shows one of the unique issues of going online in India.

smallcoco

Gentrification is everywhere. Even in the jhuggi-jhopdis. People’s clothes are brightly coloured and modern and cheap. I bought two excellent t-shirts for Rs 150 each ~ 2 euros and some odd cents, at least 40% cheaper than similar street vendor prices in ye olde shopping mecca of Singapore. I mean, branded coconut water kiosks, really?

smallmobilityThe Metro is bringing mobility on a scale that’s changing the landscape of the city. Another 3 years and where will we be?  What struck me was even with the worst heat wave in years, the power went off only once, that too for a couple of hours, something that had never happened before. Summer is always the time for load-shedding due to the higher consumption of air conditioning and other electricals.

smtaxiAnd if you have money, its app-driven public transportation for you. Ola is what everyone talks about. Apps are becoming commonplace. 10 years ago, when I was first told to keep an eye on the mobile phone and way it would change things, in everyday life, was this the future we’d envisioned for ourselves?

IMG_2200But for all that technology and infrastructure and systems, cash is still king with many shopkeepers laughing off mention of mobile payments and gizmos to stick to what they know. Paper and coins.

IMG_2207

The informal sector is still the provider of income and employment for the majority and the mindset of scarcity means the culture of repair, re-use, re-purpose and resell hasn’t gone anywhere. Even if its been glitzed up with spit and polish.

IMG_2210

Its never going to be “normal” or “conventional” but its definitely signs of social and economic development. India has come of age.

 

 

Upward Mobility is Changing Base of the Pyramid Consumer Aspirations

I’d observed earlier that upward mobility wasn’t simply about increasing incomes, but also a change in mindset, world view and values. Aspirational consumer behaviour trickles downward faster, as strivers seek to emulate the status signals sent by those they perceive as “arrived”.

The emerging middle class numbers may indeed be uncertain, as statisticians debate over the inclusion of the ‘floating class’ but regardless of their actual income (which in any case may be volatile, particularly if they’re part of the informal sector of the economy) people’s habits are certainly shifting towards more ‘middle class’ choices.

Kenyan news reveals some interesting trends. More people are using clean energy such as LPG for cooking, in the ‘slums’, than before.

In Mathare slum a few kilometers away, that residents are warming up to cooking gas is evident in the number of shops selling the commodity on the periphery of the informal settlement.

Prices for cooking gas are the lowest they’ve been since 2012, putting the smallest available size – 6kg- within reach of far more than before. LPG is an aspiration for both urban and rural cooks. A farmer’s wife in rural Makueni in eastern Kenya told me about her ambitions to cook with gas even though she was making do with firewood from the farm.

Even more interesting is this report on what the author calls the “reject economy” – the sale of seconds and damaged products. Its not so much that there’s an after market for these seconds, but the reasons for their brisk sale. Here are some selected insights from that fascinating article.

Well, the economy in Kenya’s informal sector has its own rules and the about 22 million people straddling the poverty line are masters at navigating it.

For instance, Ogola buys eggs with cracks or other tiny imperfections — known colloquially as vunjika — at Sh5 each; whole eggs retail at between Sh12 and Sh15 in middle-income neighbourhoods.

Korogocho, like many other slums in Nairobi, is also awash with charred or misshapen loaves of bread, which retail at Sh30 instead of the market price of Sh50.
[…]

“The people in the village buy these products because they are cheaper and they cannot afford mainstream prices. They buy them because, just like other people, they would like to watch the news and have the family gather around the TV,” says Ngala.

The article goes on to quote some salaried professionals offering expert advice to the poor to be cautious about these rejected or secondhand products but I suspect that those with less income have no false impressions about their challenges in life.

“We also deserve the good life just like other people, or what do you think” Ogola asks with a smile.

As the article ends, just because someone may not have 50 shillings for a loaf of fancy bread doesn’t mean he doesn’t wish to have bread with his tea in the morning.

Without something to aspire towards, we would stagnate in our current circumstances, fatalistically accepting our status in life.

Smartphones and the internet across the developing and emerging world

PG_15.03.11_Internet-Access_640px_WebThe Pew Research Center has just released a report on my favourite topic – mobile phones in the emerging economies of the developing world – with some surprising results.

Technology-Report-14And it demonstrates the so called leapfrogging of legacy infrastructure, in this case, the landline.

Technology-Report-13These numbers demonstrate the emergence of globally connected consumers, regardless of whether they have smartphone access or not. The implications for economic impact, not just e-commerce or conventional retail, are far more than we may perceive at the first instance.

As first noted back in 2006, when your friendly neighbourhood vegetablewallah has a phone in her hand, it changes the rate of speed of information flow, with significant impact on social and economic evolution. Upward mobility now includes aspirational values, not just income related status symbols.

Some earlier thinking on this topic:
Liminal cyberspace: The next billion online Dec 15, 2007
Lowering barriers: Its about access, not the device Dec 15, 2012