As we look forward to the new year, it’s important to reflect on some of the trends that shaped the previous one. Perhaps we can learn from them and create better strategies and goals for 2015.
2014 saw an incredible growth in online businesses almost across the entire African continent. It could be because some of the big players online have a continental if not a global reach.
Facebook harvesting Ad dollars from local businesses
Social media (read: Facebook/Twitter) giants for instance undoubtedly have a strong footprint across Africa. This has been great for businesses that want to reach a target audience irrespective of their advertising and marketing budgets. Facebook continues to steal away advertising dollars from mainstream media houses like Radio, Television and Newspapers who previously thrived on Ad Shillings from Local businesses.
Startups still starting up
But for African local internet entrepreneurs, global players continue to frustrate and cannibalize on their native markets. Hardly have we seen near block buster successful Apps anywhere on the continent. Whether you look at Startups at 88MPH hub in Kenya, Bongo Hive in Zambia CCHub in Nigeria or Outboxhub in Uganda. The common denominator is that local startups are facing fierce competition from heavily funded, more skilled and diverse teams from Silicon Valley who are creating globally relevant Web and Mobile Apps.
Startup conferences moving away from merely pitching events
Now startup pitching competitions such as Pivot East and Demo Africa are moving way from being platforms for merely rewarding the best pitching stunts with cash prizes to building the next generation of Internet-focused companies that will solve Africa’s biggest problems. m:lab organized Pivot East last year for instance created a set of strict prerequisites that participating startups had to fulfill before being allowed into the competition. The annual pitching conference for startups with mobile technology based businesses has previously partnered with Venture Capital firms like Savanah Fund to create training programs that help entrepreneurs learn how to identify and create winning opportunities, and how to position themselves competitively for venture investment.
Aha, Telecoms finally playing nice with Startups
Telecoms who until now are (and continue to a larger extent) seen as arch enemies of Startups are beginning to change their whole attitude towards them. The mobile networks are notoriously known for closing out startups from the mobile ecosystem and more disturbingly for “stealing” their ideas. The latter has actually happened on several accounts. However, when Millicom, an international telecommunications and media company that operates primarily under the Tigo brand in Africa committed US$10m under Millicom Foundation to support startups, we can only be more optimistic of the future. With a fully fledged think accelerator programme in Kigali Rwanda, 3 startups will be benefiting from $10m investment from the Tigo-backed accelerator. Meanwhile Kenya’s leading operator Safaricom also launched a $1m start-up investment fund, while in Nigeria Airtel announced its ‘Catapult-a-Startup’ initiative as Tom Jackson writes on Howwemadeitinafrica. Amazing right?
eCommerce came of age
To crown the year, the single most outstanding trend that ruled 2014 was without a doubt eCommerce. Whether you are in Nigeria, South Africa, Ghana, Kenya or Uganda, someone is launching a site that conveniently enables users to order stuff with a mouse. And we are not talking about just online classifieds, although Mobofree and OLX have battled for this space, but rather fully functional local Amazons of all kinds of goods and services. In Kenya, OLX has one of the top search terms in 2014 according to Google Zeitgeist 2014.
The most dominant player here is Rocket Internet whose sole mission seems to be the Amazon of Africa. Rocket has raised about $150m to expand and consolidate the operations of its pan-African eCommerce site Jumia while Naspers’ backed eCommerce company Konga in Nigeria is also raising more capital investment with serious plans to spread across Africa in 2015 and in South Africa, rivals Kalahari and Takealot chose to merge last year. In Uganda alone, there are more than 10 serious ecommerce sites buying and selling goods online and more than 5 e-ticketing sites.
Race towards cashless economy intesifies
Now we know that online businesses thrive on electronic payment methods to succeed. Unfortunately, most of Africa still remains a liquid cash society. Yes I know you must be thinking about mobile payments (read: Mobile money) and indeed these are spearheading the first move towards a cashless society in Africa.
Safaricom’s M-pesa which is the poster child of mobile payments in Africa has 15 million users conducting more than 2 million daily transactions, which by is estimated to contribute about 60 percent of the country’s GDP. The Nairobi-based Telecom giant is set to transfer of M-Pesa servers from Germany to Kenya by the beginning of April, promising users of the mobile money transfer service a more reliable system. But the operator who has been a monopoly in mobile payment sector in Kenya is set to get competition from 3 recently licensed mobile virtual network operators or MVNOs—Finserve Africa, Mobile Pay, and Zioncell Kenya.
In Nigeria where Mobile money is less pronounced, a policy developed by the Central Bank of Nigeria (CBN) will attract a charge on cash-based transactions. This is obviously aimed at reducing the amount of physical cash circulating in the economy and encouraging more electronic transactions.
Video and Music made baby steps
The African digital landscape is mainly dominated by (as you would expect) social media. But video is proving to be popular as well. Obviously when one mentions video, it’s tempting to instantly think YouTube which undoubtedly has a solid consumer base anywhere in Africa. But Jason Njoku’s video-on-demand streaming service iRokoTV moved to East Africa from Nigeria where it’s immensely popular. Jason quietly setup offices in Kigali with the aim of bringing internet TV with Titles from Nollywood while his company’s arch-rival Afrinolly still operates majorly in Nigeria. Music streaming services such as Mziiki, Orin, Simfy, MyMusic, Spinlet, Truspot, iROKING, Gidilounge, Grumi, lasgiditunes, Mdundo and MyZiki are countless as of now. They continue to struggle with the issue of monetization and bandwidth botttlenecks.
As you see, 2014 has been somewhat an impressive year albeit slow progress. Nothing gigantic really. We can only hope that 2015 will usher in new and exciting opportunities for entreprenuers and all those involved in the Tech space.
Happy New Year.