Being successful in Africa is all about strategic collaborations and embracing new business models.
The reality is that the strategies and ideas that proved successful in developing markets need to be reworked in order to be fruitful in Africa.
Speaking on the side-lines of the annual AfricaCom conference in Cape Town, Nilesh Pandya, senior VP of emerging markets at Skrill, and Frank McCosker, GM for affordable access and smart financing at Microsoft 4Afrika, discussed the e-commerce landscape in Africa.
They also highlighted the African launch of Skrill, a portal that facilitates mobile payments, through strategic collaborations between network operators and merchants - a first for Africa.
Microsoft 4Afrika and Skrill have joined forces to launch the e-commerce portal, which enables African consumers to use mobile wallets to make payments, in addition to providing access to educational material and Microsoft software. In September, a partnership between MTN and Skrill was announced; with both parties citing the collaboration as a way to help subscribers better participate in the "global digital revolution".
Mobile network operators across Africa have increasingly faced a problem due to the commoditisation of voice, which means they have had to find new ways of generating revenue. In the developing world they have done so by pushing data, stated Pandya. "And how do you push data in Africa without content?
"There are many services that users in Africa simply cannot pay for. And we are trying to help with that situation by working with mobile network operators to drive content to consumers," noted Pandya.
"You have to get the product out there at the lowest cost possible to the consumer but you also have to make money. So it is all about finding the most creative and innovative business models to make the situation work," said McCoster. He added that much of this involves providing free access to content, which then drives revenue when the users who have browsed through this content actually transacts.
Potential
For global players looking to capitalise on untapped markets, Africa holds incredible opportunity, he continued. By partnering with all of the mobile operators on the continent, platforms like Skrill are able to engage with every connected consumer in Africa. Skrill intends to give these consumers an easier option to pay for this content, Pandya said, catering to a demand that has existed in Africa for some time but until now has not been met.
While Africa is urbanising faster than any other continent, some global online merchants are reluctant to do business in these markets due to perceived fraud risks, he said. Platforms like this need to be affordable, transparent and easy to trust in order to work in Africa, stressed McCoster.
As smartphone prices continue to decline, using these platforms continues to become more viable, he noted. Regardless, Skrill functionality can be used on a standard feature phone, added Pandya.
The truth is that the landscape is changing - conversations around content delivery and connectivity will soon involve the financial industry, the automotive industry and various other groups looking for ways to allow more consumers to purchase their products and services with ease, added McCoster. By reducing the barriers to entry and making access to this type of technology simpler, everyone wins.
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