Smartphones are not just a part of our lives, they are our lives.
That’s just one of the conclusions reached in Deloitte Africa’s recent consumer survey, Game of Phones.
Here Arun Babu, Partner in the Strategy & Operations practice of Deloitte Consulting in Africa and Telecommunications Leader looks more deeply at the survey results which indicate the primacy of smartphones in one of the world’s most interesting and dynamic markets.
The article appears as part of MEF’s recently published Africa eBulletin which can be downloaded here for free.
The African market has seen significant growth in social media as well as local information and news services. Similar to global trends, consumer attachment to mobile devices is high across all markets surveyed.
The ritual of checking the phone as one of the first and last things of the day appears to be collective across the markets. More than half of consumers across the region check their phones within 5 minutes after waking up and before going to bed.
The mobile phone is becoming integrated with our lives and daily activities. Most consumers tend to use their mobile devices while engaged in other activities. These usually include while commuting, watching TV, at work or while spending time with family and friends.
These trends are prevalent in all markets, but are strongest in South Africa. Using a phone while watching television is most predominant in South Africa with 62% of respondents reporting this activity.
Interestingly, South African consumers are also significantly more likely to use their devices during shopping which could indicate the strong potential that the market has for m-commerce applications and the usage of mobile devices for online discovery (i.e. browsing for specials, discounts and price comparison of products).
In all markets except Zimbabwe, more than half the consumers are banked. Nonetheless, the proportion of unbanked phone owners remains quite significant across the region.
On average, only less than 10% of the respondents indicated that they do not use the mobile device during any of the activities.
Mobile financial services
As initiatives to increase access to financial services take off, operators are becoming increasingly positioned to challenge the traditional retail banking model through mobile financial services.
In all markets except Zimbabwe, more than half the consumers are banked. Nonetheless, the proportion of unbanked phone owners remains quite significant across the region. This gap presents an extensive opportunity (highest potential in Kenya, Uganda and Zimbabwean markets) to provide mobile financial services to the unbanked.
There is significant interest across the markets in mobile payment and mobile transfer solutions with 50% or more of the mobile users demonstrating a willingness to use these services. The level of adoption of these services is currently low and the gap represents a significant monetisation opportunity for operators.
Though market interest in these services exist, operators have to carefully evaluate multiple factors to establish the potential for adoption including the prevalence of market conditions that drive true market need; the favourability of current regulatory regime; the level of infrastructure investments required; and, the agent and merchant network required to ensure adequate access of these services to consumers.
The combination of these factors will provide an indication of the likelihood of success in these markets for such services.The combination of these factors will provide an indication of the likelihood of success in these markets for such services.
Security of the solutions and trust by consumers in the mobile driven financial solutions offered are also crucial factors in determining the success of the offerings in the markets.
Security of the solutions and trust by consumers in the mobile-driven financial solutions offered are also crucial factors in determining the success of the offerings in the markets. In South Africa for example, the sophisticated banking network will pose strong competition for mobile financial solutions launched by operators.
In addition, the recent cases of security breaches in prominent mobile financial solutions launched in South Africa has dented consumer confidence in using mobile financial solutions as an alternative to the bank-led solutions. In line with the above, the responses indicate that South African mobile consumers have the lowest interest in using mobile payment or mobile transfer solutions.
Mobile commerce is a slow burn
A high percentage of mobile users have dabbled with mobile commerce as shown by percentage of one-off mobile commerce transactions across the region. However, there is no clear indication that mobile commerce is attracting users on a continual basis and driving usage on a daily basis.
Consumers in South Africa and Nigeria prefer to browse and search for products and discounts on their mobile devices and tend to make more purchases online than in store. At least 29% of Zimbabwean shoppers have made a one time in-store payment using their mobile devices making it the most popular shopping related activity followed by browsing shopping websites/ apps.
Kenyan shoppers prefer making in-store payments compared to Ugandan shoppers who prefer browsing shopping websites/apps on their devices. Given these mobile money trends, consumers across the region are set to become increasingly cash-light as network operators and other mobile financial services providers enable them to transact more easily through digital payment channels.
A major factor impacting ecommerce as a whole in Africa in the complex logistics and distribution requirements across semi-urban and rural areas outside of the main cities. The mobile browsing experience is a significant differentiator of the purchasing journey and a superior experience would influence the retailers to consider mobile as a significant part of their channel strategies.
Deloitte’s full consumer survey, Game of Phones which provides in-depth analysis of consumer mobile usage and attitudes to content, handsets and networks, can be downloaded here for free.
MEF’s quarterly Africa eBulletin contains the insights, market stats, news and opinion that frame the ever-evolving pan-African mobile ecosystem.
In this edition, MEF member and Managing Director for Basebone in Africa, James McNab, discusses how the right mix of content and transactional platforms are unlocking revenues in the region. The eBulletin also includes analysis from Deloitte’s Africa Telecom Leader Arun Babu from his company’s recent consumer study ‘Game of Phones’ which surveyed consumer mobile behaviour and an exclusive interview with the CEO of Tencent Africa, Greg Loubser, on how WeChat is becoming a proxy for the internet itself in the region.