Mobile commerce: “You can’t separate offline and online worlds”

June 18, 2014

While East Africans have quickly embraced several key elements of the information age, smartphones and social media among them, one area in which they noticeably have embraced significantly is mobile commerce. According to a new study by an American company, the mobile commerce sector in the region is growing significantly, at a rate of about 16 percent in the past year, compared to 9 percent in Asia. There are numerous reasons why mobile shopping has taken off in Uganda, Tanzania and Kenya. Even though an increasing number of business owners were interested in Mobile commerce, there is lack of a trusted and secure mobile payment system which is still the biggest stumbling block. Many East African consumers are confident about making purchases using their mobile wallets. Another survey found most East Africans relied upon recommendations from relatives and friends in order to avoid dodgy mobile payments. East Africans have a very different idea about mobile payments than people in developed world, who have been embracing mobile commerce for more than half a decade.

Majority of them still prefer cash transactions over mobile money transactions, a big barrier to creating an mobile commerce payment system. East Africa’s multitude of culture has also made it difficult for online shops to make deliveries across the region. Also lack of laws governing online and mobile transactions is another obstacle. Despite the many problems, the potential market for mobile based shopping in the region is huge, so many retailers are still attempting to crack the nut.European companies have taken note of East Africa as an emerging market with increasingly Internet-savvy consumers and growing middle class but most of the companies have only taken a tentative step into the market, forming a partnership with a major local e-commerce site. Interestingly, European, Asian companies are more optimistic that the number of East African shopping online using their mobile phones would soon rapidly increase, pushing the country into the mobile commerce, allowing shopping anytime and anywhere compared to American companies. In the case of Contador Harrison, he’s already witnessed an extraordinary change in the way East Africans shop since the region’s first mobile payments was launched, and I do believe that this kind of transformation could easily happen once again by having a cashless region.

With a growing number of Ugandans, Kenyans and Tanzanians shopping at hypermarts, supermarkets and malls, I believes Mobile commerce will have its moment here anytime soon. Entrepreneurs need to invest in educating the market, with the results likely to be visible within three years.To me, one indication of a change in behavior could be seen in how East Africans used social media.People now gladly share their personal information, photos and stories online. In fact, many East African shoppers do already buy goods using their mobile phones but they are often informal transactions negotiated on phone then completed offline, either in person or through a mobile money transfer. Many small and medium-sized businesses, without the funds needed to build a good mobile commerce website, market their products by putting photos on social networking sites. East African countries of Tanzania, Kenya and Uganda are taking tentative steps into mobile banking, may also rely on mobile transactions as another solution to the problem of online transactions. Mobile commerce in East Africa still has some way to go before it becomes a major force in the economy, but by all indications, the infrastructure for it is materializing. It is now up to local entrepreneurs and consumers to embrace it.

Contador Harrison