Mobile commerce gains popularity in East African region

Posted on January 10, 2014 12:05 am

East African retailers are failing to keep up with the mobile phone based payments. More than 40 percent of East Africans have been described as “mobile buyers” who prefer to pay via mobile money platforms where possible. More than half of retailers were expected to generate close to 25% of their festive sales via mobile payments. It’s not just mobile services that are changing the way East Africans do business. Social media continues to be a strong point for many companies in the region. There’s research released few months back that shows traditional print and broadcast media are still valuable for creating awareness of brands although most East Africans don’t make that final commitment of buying until they consult their trusted friends or partners. With region’s mobile based retailing poised to grow significantly, companies stand to benefit from providing services that facilitate mobile commerce. The potential take off of mobile based retailing could have a positive flow-on effect on other businesses like mail delivery services. East Africa’s mobile business to consumers transactions are expected to total more than US$5billion this year, while business to business mobile commerce could reach some US$10billion in Uganda, Tanzania and Kenya combined. Mobile commerce is expected to post annual growths of between 20% and 30%, a result of both private initiatives and supportive government policies although the hotly contested tax on mobile money transfer spells doom for the industry according to some analysts.

The market will likely continue to grow if the Internet infrastructure is strengthened and more East Africans start to shop from their mobile phones. If broadband penetration in the region improves, this will encourage mobile phone based transactions further and with that comes online shopping where payments can be made via mobile money pay systems. East African businesses and retailers are looking at getting on the mobile shopping bandwagon by marketing themselves as a retailing service provider, combining its existing infrastructure and brand name with a new mobile payments portal. This could encourage consumers to buy through established mobile payments outlet with a proven reputation. New development will give mobile subscribers the opportunity to make quick and secure purchases electronically using their cellphones. With the mobile phone based payments, the ability of customers’ pay problems instantaneously becomes much more achievable in my opinion. Mobile payments take things that East Africans used to think they understood and turns them inside out. All of these mobile payment technologies could give businesses the tools to delight their customers and I see that as the great challenge in the new business normal. Many businesses will meet the challenges presented by mobile customers. There is a saying that says “If you do not have delighted customers, you have no market,” and the way to delight customers is by making sure every interaction leaves them happier than they were before and that is what mobile money payments platforms are achieving in East African region. I do believe that companies that neglect to adopt mobile money payment will soon discover they have customers who are sensitive to nothing else but method of payments.

Contador Harrison