The Analogy of Fly-fishing to good business strategy.
The Analogy of Fly-fishing to good business strategy.
July 2020 – Is there a place for high-budget TV ads – the kind where crowds of hundreds clink glasses as they dance together in a small space? Or is the future of marketing looking a lot more low key?
Connection, connection, connection.
If there is anything that emerged out of the coronavirus pandemic, it’s the insight that humans crave connection above all else. It’s what makes them willing to risk their health, and that of others, in their pursuit of activities and pastimes that make them feel that they are part of a greater whole. That’s why the brands that have either reflected or sought to create connection are the ones that have done well during a period that’s been exceptionally trying for brands.
Inevitably, these trials have been passed on to their marketers. According to a Marketweek survey of CMOs, 65% of marketers are expecting to see their annual marketing budgets cut, and 86% predict that their marketing goals will be that much harder to achieve.
Digital marketers, on the other hand, must be enjoying a secret smile, if the survey respondents’ belief that SEO has become more important than ever is anything to go by. Indeed, since most consumers have little option but to bond with their laptops, social media is enjoying a boom, and many brands are taking advantage of this new captive market. There’s a caveat, however: consumers don’t want to be reminded of how things were. According to Forbes.com, they’re more likely to respond to an ad that reflects our current reality, no matter how second-rate that reality is. It comes down to the principle of authenticity: we can’t pretend that life is glamourous when most of us are sitting in our tracksuits – any brand that ignores this is tone-deaf.
On the other hand, brands that point out that this is something we’re all affected by may well win. Forbes.com singles out Nike’s Covid-19 ‘Play inside, play for the world’ campaign as one which does this especially well. From a local perspective, who can forget the SA Tourism’s appeal to put the brakes on travel now, so that we can all travel later? If such a message is backed by an action to ease the collective suffering (like the offer of a payment holiday or donation to a cause), so much the better – but, again, only if it is authentic and transparent.
Since marketing budgets are a lot more slender than they were at the beginning of the year, marketers have to do a lot more with a lot less. That’s nothing new – in essence, they’ve been trying to make their spend go further and further since the recession of 2008 – but this time around, the need to create a connection is so much greater. The accent is on quality content that can add value to consumers’ lives: overseas, brands have found a way to interact with their consumers through interactive classes, videos and webinars on platforms like Zoom or IGLive, for example.
The ultimate takeout? The way we buy and spend has changed, probably forever. Of course we’ll reach a stage where consumers have greater freedom, but by then, online habits may have become entrenched. As always, marketers who have missed out on an opportunity to entrench their brands due to short-sighted cost-cutting will feel the brunt when spending returns to normal; those that have adjusted their strategies – by creating relatable, relevant content and serving it on a platform that speaks to consumers’ needs for convenience and efficiency – may hang on to their niche. It’s nothing new – we simply have better data at our disposal to help us choose where to feature that content, and how to execute it.
Johannesburg, September 2020 – Grade 12 is the most critical year of any learner’s academic life; the bridge between secondary and higher education, as it were. For the more than 700 000 students enrolled in matric, this final year has become far more than a challenge. With Covid-19 stalking the corridors, their futures are looking decidedly dubious.
Ten million. That’s how many African students have been scrambling for a solution to an academic year gone haywire, according to UNESCO.
Add to this the classrooms full of Grade 12 learners who were expecting to join older students on campus next year, and it’s clear that faculties around the country will be facing an enormous challenge during 2021 – but no more so than the learners who, eager to start on the path to their vocations, are left wondering how their year will proceed.
Higher Education, Science and Technology Minister, Blade Nzimande, has provided an answer of sorts, indicating that the academic year will start later than usual during 2021, giving schools time to complete their curricula.
Those institutions that have prepared students will find the disruptions take far less of a toll, on marks and emotional wellbeing alike. Going forward, the internet will play a more significant role in our learning than ever before. This isn’t, in fact, something new: according to Weforum.org, the trend was already in evidence well before the onset of the pandemic, with investment in ed-tech reaching $18.66 billion last year. These funds have helped to develop a variety of platforms, from apps to video conferencing tools, and from virtual tutoring to online learning software. Naturally, the use of these tools has grown exponentially since students were forced to stay out of their classrooms.
Students take around 40% to 60% less time to learn new concepts online, because they are able to customise their learning process to a time and pace that suits them. What’s more, Weforum.org cites research which reveals that retention of information learned online is 25-60% higher than the material which has been taught in a classroom – where retention stands at only 8-10%.
Those who were able to lay some groundwork ahead of time have successfully kept disruptions to a minimum. Students at the IMM Graduate School, for example, had a gradual learning curve consistent with skills development over the past number of years. This can be attributed to collective experience across areas of online learning that are likely to cause anxiety and understanding how to address them. For instance, a variety of communication channels between the institution and the students ensures that queries are tackled quickly, thereby helping to reduce stress. We were also able to adjust timelines very slightly so that the semester has not been disrupted.
From now on, it’s very likely that online learning will continue to be incorporated as part of a standard curriculum. The downside? Institutions which have had to adapt to online learning suddenly and abruptly may battle with the change – although, as digital natives, their students will most likely embrace it. The plus side? The next time there is a similar disruption – and there will most certainly be a next time – the education sector will be far better placed to face it.
23 July 2020 – Altruism is not a new concept for brands. There has been much discussion about being purpose-led and ‘having heart’ at the core of a business model, but never before has this been more important than during the global COVID-19 pandemic.
As far back as 2013, marketing titles were trumpeting the value of cause-related marketing. In the pandemic era, when memes and pithy internet quotes alike are calling for kindness, it could be argued that only tone-deaf organisations turn a blind eye. But what does this mean for marketers now and in the foreseeable future?
Any doubt that an altruistic image affects consumer behaviour can be dismissed with the outcomes of a study conducted in Taiwan. Authors Chun-Tuan Chang, Xing-Yu, Chu and I-Tin Tsai asked consumers if their attitudes and purchase intentions were influenced by cause-marketing campaigns, and the response was unequivocal. “When consumers perceive the company’s motives as altruistic, they form a more positive attitude toward the brand and a stronger purchase intention. Their actual purchase behaviour also reflects similar patterns,” they wrote.
Of course, theory is one thing, practice quite another. Before COVID-19 was on everyone’s lips, the second greatest disaster of 2020, the Australian bushfires, gave local companies an opportunity to express humanity with a marketing exercise that became a movement.
Most companies started with a social media post detailing a promotion which saw a percentage of sales going towards fighting the fires; yes, they got to do business – and soaring business at that, because consumers could address their needs while helping others simultaneously. But more than this, the companies emerged not only as purveyors of goods but also as national heroes. It was, as anchordigital.com.au put it, a “win-win-win” because Australia’s fire-fighting organisations got to benefit, too.
Those companies that get altruism right reap significant rewards, as the same website points out, citing Jaden Smith’s JUST Water as a great example: valued at $100 million, he’s making money while also ensuring communities have clean water, thanks to its Water Box offering.
Clearly, this is a company that has ‘good’ built into its DNA – but some companies are getting it hopelessly wrong. Usually, the mistakes they’re making are basic by being flippant, irrelevant or downright inauthentic. Of course, there are times when this tone is exactly what you want, but when you’re trying to appeal to people who are feeling vulnerable, jokes may alienate consumers rather than be seen as endearing.
Brand communication that serves best is succinct, informative and genuine. And, perhaps most importantly, it’s honest – blurring the lines, or making claims that you don’t intend to remain true to, is not likely to be forgiven or forgotten. If you’ve advised consumers that you’re donating a certain percentage of your profits, make sure you do so. So, if there’s even the slightest chance that you’re not going to be able to follow through, don’t make a claim in the first place.
Sometimes, it’s not the message that matters – it’s the medium. Naturally, there’s a hashtag for this: #StopHateForProfit. Suffice to say, if companies like Coca-Cola, Honda and Unilever are saying ‘no thanks’ to Facebook because of its policies around hate speech, there’s a good case for considering how an appearance on social media platforms might impact your brand’s image. Interestingly the criteria for considering media channels is shifting; it is becoming more and more about the brand fit (ideologies and philosophies) and not only about how effectively brands can reach their target audience.
Finally, the old adage about being able to tell a lot about people from how they treat the waiter holds true for organisations, too – although, in this case, consumers are looking at how you treat your staff. It’s all very well to promise to work towards the greater good, but if you’re retrenching, forcing pay cuts and generally not caring about your staff, it doesn’t matter how many entities are benefiting from your actions. After all, charity begins at home.
The golden rules: marketing and brand communication, like everything else, is likely to be changed through this pandemic. Those brands that seek to embody the values that we have increasingly come to cherish – like kindness – are expected to survive, so long as these are reflected within the context of existing brand essence and values. People will always remember who was in their corner during a crisis, while those that showed true colours, which turned out to be less than appealing, will feel the pinch in the pocket.
Scrolling through social media is the last thing most people do before they go to sleep and the first thing they do right after they wake up.
Let us have a look at some interesting average social media user stats.
With people spending so much of their time in a day online the chance that your posts or ads will appear on their screens is pretty high. For example, 928.5 million people can be reached by ads on Instagram and Facebook ads reach 1.95 billion of the platform’s 2.5 billion monthly users.
The list of benefits of social media marketing is quite lengthy, but here are a few of the more important ones:
Creating brand recognition – Brand recognition is extremely important because consumers want to buy brands that they are familiar with. In this case, social media benefits over traditional marketing because you can get your brand in front of people much faster and easier.
Traffic – Social media marketing directs more real traffic to your website or blog than traditional marketing.
SEO – Although social media marketing doesn’t improve your search engine rankings directly, it does drive traffic to your website and it is proven than 58% of marketers who have been using social media for longer than a year continue to see improvement in their search engine rankings.
Low cost – Signing up or creating a social media profile is free for almost all platforms.
Customer service – Social media allows for immediate interaction and feedback. This also helps in case of negative engagement and addressing negative feedback before it gets out of hand.
Connect with your audience – Social media marketing gives you the opportunity to connect with your audience via social listening.
Data gathering – Social media marketing allows you to gather data from audience research to improve your content and mould it to fit your target audiences needs better.
With all the benefits that stand out there is one thing you should always remember: “If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends” – Jeff Bezos. Weak or inappropriate ads can create a negative emotional response towards your brand in a blink of an eye and if there is any negative publicity to do with your brand on social media, it will spread like wildfire. A great example to look at is Clicks and their Tresemmé advertisement.
So how can IMM help you master this incredible channel?
IMM has an excellent, recently updated short course just for you. Our Social Media Marketing course will help you to understand and apply the power of social media, whether you are a small business owner, a marketing manager, co-ordinator or an aspiring media manager.
The overall goal of the course is to give you an in-depth understanding of several social media platforms, and the online marketing tools, segmentation capabilities and metrics they offer. In addition, you will learn about communicating with and reaching your customers via social media. Best of all, this practical course will equip you with the skills to set-up and manage your own social media accounts, helping you become a socialite extraordinaire.
Feel free to sign up for our “try before you buy” option.
For more information on our new social media marketing online short course follow the link https://www.imm.ac.za/onlineshortcourses/online-course/social-media-marketing-2020/
The first thing people associate with university degrees and diplomas is a guarantee of financial stability, but in recent times this association has been proven insufficient. Some employers are of the opinion that short course qualifications that are recent, relevant and specific of a person’s current skills requirements are of utmost important as an addition to a qualification which if received years ago may have become outdated.
While the demand for degree, diploma and higher certificate programmes hasn’t declined, there does appear to be an increase in demand for short courses and more specifically skills based online short courses.
What exactly is a short course? It is any non-accredited course offered by higher education institutions outside their formal structured undergraduate and postgraduate programmes. So, it doesn’t lead to a qualification on the Higher Education Qualifications Sub-framework (HEQSF), but it is typically more practical and will certainly equip you with the workplace-relevant knowledge and skills needed to land a new job or advance your career.
People of all ages take short courses, either as a knowledge refresh, or to learn something completely new. Even people with families and steady jobs do it to improve their skills.
Why are short courses more popular and what benefits do they hold?
Lower cost- short courses are prices much lower than for examples a three-year degree or diploma from a university or college. It also usually includes all costs like course notes and seldom required a textbook.
Flexibility and convenience- with deadlines looming and an overloaded r schedule, it’s a great feeling knowing you won’t fall behind with your work, because your study time is flexible. Most short courses are online which means you can work from any location and at any time.
Fills the gap – short courses are a great way to fill the gaps in your knowledge and gives you an advantage when it comes to job promotions. Not to mention it gives you confidence to speak up and participate in meetings about topics that you previously shied away from.
Test run – short courses give you the opportunity to test a career path to see what type of skills and knowledge it requires before studying a full-time degree or changing careers altogether
Stay on top of the game – short courses are relevant, current and specific helping you to get to and remain at the forefront of your field.
Employable – It makes you more employable giving you skills that could qualify you for an entry level position.
Turn your hobbies into a career – Short courses can be a way of discovering new hobbies or turning your current hobbies into something more. Remember short courses aren’t always about serious stuff like business management or project management. For example, the IMM Graduate School offers a short course in developing your personal brand.
Information retention – Short courses help to retain information better because they make use of different techniques such as visual aids, videos, lecture videos and scripts.
Revision – Recorded lecture videos can be used as revision.
Finally, it kills boredom – When you have lots of spare time on your hands it is always be a good idea to do a short course. You will benefit greatly from any course that you do.
Popular short courses include business management, project management, marketing management and social sciences.
What does IMM bring to the table?
We are a distance learning institution with students from more than 20 different countries around the world. You can complete your masters, postgraduate, degree, diploma and higher certificate through our institution.
The important part is that we have an amazing online short course and express course programme designed for easy access and comfortable learning. You can choose to do these before signing up for one of our degree programmes, while studying or for top up skills after your graduate.
Our short course programme includes the following:
Coming soon is a course in Project Management.
We have also developed a unique licence package option that allows businesses to buy bulk online short course packages for their staff. Choose any of our online short courses and save money.
Nelson Mandela once said, “Education is the most powerful weapon which you can use to change the world”.
So, if you are aiming for that promotion, need to keep up to speed or just have some time to kill then short courses are a great way to expand your skill set. Visit our website for more information on our short and express courses https://www.imm.ac.za/onlineshortcourses/
Demand from students wanting to study in Stellenbosch has resulted in the growth of the IMM Graduate School in this historic Winelands town. A new campus will open its doors on 4 January 2021.GLENDA NEVILL reports.
The IMM Graduate School has had a presence in Stellenbosch for many years, but increased demand from students wanting to study in the historic town has resulted in the need for a larger campus.
The new campus will allow the IMM Graduate School to grow its numbers in Stellenbosch by a third, says Irene Gregory, the IMM Graduate School’s National Head: Student Support Centres.
The new campus will replace the current Student Support Centre, and can house 750 students, with a maximum of 320 on site at any one time.
“There has been an IMM Graduate School Student Support Centre in Stellenbosch for many years, however the increase in registrations from students wanting to study in Stellenbosch has resulted in the need for a larger campus,” says Gregory.
In researching whether a brand new campus was feasible in Stellenbosch, Gregory says studying in the scenic town is a dream for many school-leavers, who “long to be part of the vibey student life with its sidewalk cafés and cultural heritage”.
“The oak-lined student town of Stellenbosch, located in the heart of the beautiful Cape Winelands, is always bustling with young adults seeking this vibrant lifestyle,” Gregory says.
The campus will be located in a brand new building which is under development in Bosman’s Crossing, Distillery Road. The building is close to the beautiful and famous Eersterivier in the shadow of the Onder-Papegaaiberg, which is only a five minute drive from the centre of town.
Gregory says management of the IMM Graduate School looked into various locations during 2019 and opted for the Bosman Business Centre at the beginning of 2020.
She lists the elements comprising the new campus:
Daytime tutorials will be offered for these qualifications:
“The Stellenbosch campus will be manned by seven full time staff and a team of industry experts contracted to offer tuition to the students,” says Gregory. “The campus is supported by a strong faculty at national office level, as well as departments which take care of student support, academic administration, and a technical team.”
The campus opening event will be held on 30 January 2021 and the first intake of students will start on 1 March 2021.
Unless we build a strong, inclusive economy, South Africa (and every company in South Africa) is in big trouble. Supplier development and transformed supply chains are key to this. GLENDA NEVILL reports.
The work many South African companies do in terms of supplier development is quite “remarkable” because they have to make both their SMME suppliers, as well as their customers, the focus of their supply chain management activities.
Supplier development and supply change management (SCM) don’t sit comfortably together, says IMM Graduate School SCM lecturer Marzia Storpioli. “Typically in SCM, the focus is on superb service to the customer and enhanced customer experience, and not the number of jobs added to a specific sector in the economy and the financial security of the suppliers,” she explains.
That is why initiatives highlighted in the latest Absa Business Day Supplier Development Awards are quite “remarkable”.
“Supplier development generally involves achieving a sort of partnership where the buyer achieves lower costs and higher quality and the seller consolidates his business by ensuring continuity of supply for the buyer through innovation,” Storpioli explains.
“This is not generally the case in South Africa’s supplier development programmes because the aim is to uplift small, black-owned and black female-owned businesses. Most often this results in paying slightly higher prices because small businesses are supported. The benefits lie in the number of jobs created or the revenue stream guaranteed to such SMMEs,” she says.
The reasons for doing this are, in the main, aligned to political and socio-economic demands. The Absa Business Day event recognises efforts in developing suppliers in line with B-BBEE initiatives, Storpioli says. “This has little to do with supply chain management itself but rather more about spreading wealth and opportunities through a business’ procurement spend,” she adds. “As a professional I can only applaud what is being done by Absa and commend the winners on their achievements (immensely hard to do in a sluggish economic environment).”
Founder of the awards, Fetola CEO, Catherine Wijnberg, says no company is an island and leaders in business are hyper aware that unless we build a strong, inclusive, economy South Africa (and every company in South Africa) is in big trouble.
“For this, our supply chains need to be local, future-focused and world class,” she says. “Transformation ensures broader participation in the economy, and resultant growth in national wealth and increased wealth and well-being is critical to all our futures.”
Wijnberg says the purpose of the awards is threefold:
Despite being only three years old, they have had an impact. “We see an increase in corporates collaborating within and between industries. We see that when supplier development is driven as a strategic imperative from the boardroom, there is distinctly greater success and long-term impact. We see that leading companies are passionate about doing supplier development right – going beyond the scorecard to a genuine desire to support lasting growth in the supply chain as a way to build an effective and transformed economy,” Wijnberg points out.
She acknowledges that supplier development is not always the most economical way of doing business but in South Africa, it is vital in the socio-economic sense. So, how do big companies balance economic imperatives with socio-economic ones?
“The Absa Business Day Supplier Development Awards are about going beyond the scorecard – so moving away from the tick box of compliance to real strategic thinking,” Wijnberg explaines.
“Investment into supplier development is investing in the future competitive advantage of the company – so, selecting the right suppliers and working together for shared benefit. The decision-making needs to move away from the cost or ticking the supplier development scorecard and become more about the cost of NOT developing competitive, diverse and healthy local suppliers,” she adds.
While there are hundreds of worthy and honest initiatives, IMM Graduate School SCM lecturer, Dr Myles Wakeham, warns against “window dressing”. What is supplier development in a South African context, he asks?
“Some see it as a financial investment in a supply organisation and if that is the case, then quite honestly there are too many charlatans/shady operators in this space. All you have to look at is the failure of B-BBEE, particularly in small to medium enterprises as well as corruption and blatant theft. I do, however, support supplier development in terms of training and helping organisations to become more adept in outsourcing. Give them the fishing rod and help them to fish!”
Wakeham believes medium sized organisations would do a better job if there were some tax incentives to get involved. “Remember that this will become a long-term project and so there should be mutual commitment on both sides,” he says. “Businesses should commit themselves for the medium to long term. Supply chain development is not supplier development so businesses should consider including medium and small entities in their chains. The problem here is that by doing so they will be exposed to greater risk.
“Risk management should be used when assessing supply partner suitability and there should be continued supplier evaluation. There has to be a comprehensive and mutually binding service level agreement (SLA) in place that spells out exactly the mutual obligations of both parties,” says Wakeham.
Still, the challenges are legion, as Wakeham points out. “The unhealthy economy, Covid-19, poor business ethics, the lack of transparency and trust, self-reference criteria, the racial divide, the continuing narrative of costly mistakes in this regard, opposing business cultures and a ‘I look after myself philosophy etc…”
How to overcome all this? “Government support and new business models applicable to the development of suppliers and supply chain development to foster inclusion…”
Wijnberg has some ideas too. “We can reduce the inefficiency in supplier development through increased levels of collaboration between businesses and across industries,” she says. “As more companies move beyond the ticking of supplier development boxes and work together to build a national network of world-class, local suppliers’ funds will be released to do bigger and more impactful work.”
There are also plans afoot to bring small and medium enterprises on board, Wijnberg reveals. “We have lots of smaller businesses already playing their role in supplier development and local supplier support. In 2021 we plan to encourage this with recognition for SMEs that support the transformation of their own supply chains,” she says.
Wijnberg acknowledges winners of the overall award, the Spar Group, for its commitment to local economic growth via their rural farming supply chain. “While their programme is far from being the largest, their inspirational approach shows strategic leadership commitment, aligning company purpose with actual delivery of local economic growth,” she says.
“Collaboration with local and international role players in the development of their rural vegetable farming scheme, the active enabling of these small farmers to access competitive supply chains and the vision for community-owned facilities illustrates an inclusive, strategic approach which embodies the spirit of the Absa Business Day Supplier Development Awards.”
Distell, too, stood out this year with places across a range of categories and their commitment to stay the distance with small suppliers despite the ravages of Covid-19, she says. “This long-term commitment to building healthy supply chains is central to their future strategic advantage and makes them leaders to watch and emulate.”
And then there’s the V&A Waterfront who “showed why they are leaders in the retail precinct industry, with their project that actively brings ‘buy-local’ opportunities for small suppliers alongside international brands. The V&A are a great example of innovative collaborative thinking as a way to strengthen the long-term, competitive advantage of their mall”.
Newcomer Award: V&A Waterfront for its Joy from Africa to the World programme. They partnered with 140 artisans and smaller suppliers – at every level of the supply chain – to reimagine their festive season décor. The category runner-up is Goodyear.
Local Manufacturing Award: V&A Waterfront for its investment of R336 million in small suppliers representing 38% of their total procurement spend. Runner up was Tiger Brands.
Youth Development Award: Distell for the group’s Green Up Recycling and Bansela Taverner programmes, which provided 320 job opportunities to mostly youths. Runner-up was Tiger Brands.
Black Women Development Award: Empact Group has 30% of total procurement spend going to SMME’s – of which 39% was channelled to support black women suppliers. Runner-up was the V&A Waterfront.
Rural and Township Development Award: SPAR Group Ltd won the award for their SPAR Rural Hub programme in which markets have been created to support small-scale farmers in the production and sale of their vegetable products. Runner-up is Distell.
Skills of the Future (4IR) Award: Unilever South Africa for their Isazi Farming Technology project that is providing technological solutions in the agriculture sector through the use of artificial intelligence and machine learning. Runner-up was Distell.
Collaboration Award: This year’s joint winners were Distell and Tiger Brands.
Small Supplier Development Award: SAB with runner-up being Goodyear.
Impact Award: It acknowledges a company whose supplier development initiatives have substantially impacted the value chain. This year’s winner is Tiger Brands, with Distell being named runner-up.
Overall Winner: A discretionary award for the company that stands out as the leader in supplier development in South Africa. With their purpose-driven strategy to address challenges such as food security, nutrition, job creation and transformation, this year’s winner is SPAR Group Ltd. Distell was named as the runner-up.
With an expected 500 million mobile-money users on the African continent in 2020, KENNETH MUTUMA, Head of Ad Operations at iProspect Kenya, investigates the potential opportunities within e-commerce and marketing
When the first mobile device was launched more than three decades ago, Africa wasn’t expected to be at the cusp of adoption and innovation. However, the growth of mobile in Africa has been unparalleled.
Mobile subscribers are expected to hit 600 million by 2025; this as operator revenues soared to over $51 billion for the period between 2019 and 2020. And 1.7 million people were hired (GSMA Intelligence, 2020). This is despite having less than two mobile subscribers to every 100 people in the last two decades, according to the World Bank.
Astute Africans have been able to leverage mobile technology to create tailored solutions to solve African problems. It has been inadvertently labelled leapfrogging, a key attribute to Africa’s developing economies whose ability to skip redundant and inferior eras of technological advancement is unparalleled.
However, mobile-sector taxes have continued to hinder the adoption of mobile in markets like the DRC whose sector-specific taxation is among the highest in Africa, holding back adoption and potential GDP growth. The mobile sector contributes approximately 20% of total tax revenue, despite accounting for just 3.6% of GDP, meaning the total tax contribution of the mobile sector is almost six times the size of the sector in GDP terms.
A recent research study carried out in Africa determined that over 62% of Africans are unbanked (Fintech News, 2018). Mobile money provided a unique solution to close this gap by creating a simple technology that is easy to roll out across rural and urban settings.
Mobile growth in sub-Saharan Africa reached a milestone in 2019, representing over 66% of all global mobile-money transactions on the globe. In sub-Saharan Africa, East Africa is still leading, although West Africa is steadily gaining ground – thanks to Ghana.
Kenya is a pioneer in mobile money with M-PESA, founded in 2007. Currently, it boasts over 24 million active monthly users; the share of the population with access to financial services has gone from 14% in 2006 to above 80% today thanks to M-PESA.
In Kenya, you can pay for almost any commodity or service with M-PESA. In addition to this, there are added features for loans and savings. M-PESA users form the single biggest investors in government bonds in Kenya.
M-PESA app and sim toolkit
In the financial year 2019–2020, M-PESA business grew by 18.4% to $84.4 billion, with more than 43% of the growth attributed to new business channels, primarily savings and lending products: M-Shwari, Fuliza and KCB M-PESA.
On the other hand, Ghana is busy setting itself up as the leader in mobile money in West Africa. The country has seen mobile money accounts rise six-fold between 2012 and 2017, from 3.8 m to 23.9m, while the value of transactions increased by a factor of 261, from GHS594m ($109.8m) to GHS155bn ($28.7bn). Transactions rose again by another 43% last year to total GHS233bn ($43.1bn), according to the Oxford Business Group.
The creation of OEM (original equipment manufacturers) factories to produce quality mobile phones in African countries will accelerate the adoption of mobile by providing quality devices at a more affordable cost. Rwanda has set up the first African high-technology factory to manufacture smartphones.
Caption: Mara X phone
The phones, called Mara X and Mara Z, are the first ‘Made in Africa’ models, with the cheapest device retailing at $130.
Beyond the utility that mobile devices provide to the user, marketers have also seen high value derived from them. From historical campaign data, over 60% of all internet traffic is through mobile. This has enabled advertisers to create unique ad tech to effectively target and reach users via the most utilised channel.
Mobile enables marketers to reach users from all economic classes with contextualised messaging: Ring-back Tone is one such example enabling marketers to break the language and literacy barrier in Africa with short, incentivised audio of 15 seconds or less served to users before their phone call connects.
The pangs of the pandemic are forging a new era of cashless transactions in Africa. In Kenya, banks continue to promote the cashless culture by encouraging the use of their apps and cards instead of cash. They have gone to great lengths to waive all transaction fees on money transfer between mobile wallets.
The Economist reports that in Rwanda, the number of mobile-money transfers doubled in the week after a lockdown was imposed in March, according to data collected by the Rwandan telecommunications regulator and analysed by Cenfri, a South African think tank. By late April, users were making three million transactions a week, five times the pre-pandemic norm.
In countries with a developed online retail industry, the middle class have increased spend on e-commerce, with the majority buying their groceries and other essentials online. JUMIA has seen the greatest growth in sales during this period, as more people, including users who had never used e-commerce before, are leveraging the service due to restrictions on movement.
Kenneth Mutuma is Head of Ad Operations at iProspect East Africa. He is a digital media specialist with six years of successful experience in digital media buying and strategy and currently heads the digital media-trading arm of the business. He is a strong believer in the power of data in revolutionising marketing.
Ramadan, A. (2020). The Unbanked in Africa Could Be One of the Biggest Opportunities in Fintech History. Plug and Play.
Quest, R. (2018). Quest Means Business. YouTube.
GSMA Intelligence. (2019). Country Overview: Ghana Driving Mobile-enabled Digital Transformation. GSMA.
Fast Company. (2019). Rwanda Just Released the First Smartphone Made Entirely in Africa.
Ozyurt, S. (2019). Ghana Is Now the Fastest-growing Mobile Money Market in Africa. Quartz.