INTERVIEW: Of factors driving Mobile Commerce in East Africa

CIO East Africa interviewed Pieter Bosman, Executive Vice-President International Operations at Sage on the rise of Mobile Commerce in East Africa. He gives a well-informed informed analysis of the factors for Mobile Commerce.

Below are the excerpts of what he said.

1.     Is there any remarkable shift from E-Commerce to M-Commerce in Kenya and East Africa in general? If so explain what is going on in that respect?

In essence E-Commerce has its origin in the web while M-Commerce has its origin in the mobile phone industry. From this perspective it is inevitable for M-Commerce to have quicker adoption to what E-Commerce experienced. Given Kenya’s unbelievable adoption of mobile technology linked to the strong adoption of mobile money through M-Pesa and Zap traditional E-Commerce should be less attractive to consumers than M-Commerce.

Almost every Kenyan use their feature phone or smartphone to perform financial transactions using M-Pesa or Zap. Over the last year or so M-Pesa have been adding service providers in financial services and healthcare. The M-Pesa API launched in August of 2015 gives 3^rd party developers like Sage the ability to contribute to this ecosystem, undoubtedly this will result in the M-Pesa payment mechanism to be integrated into more M-Commerce applications.

2.     What M-Commerce applications are popular in the region and why are they popular?

Any successful M-Commerce application has to be compliant with local regulation and conform to all the requirements on usability, simplicity, speed and response, quality and robustness. An added requirement in Kenya is for M-Commerce application to be integrated to a mobile wallet to be adopted by consumers. If you don’t have a mobile wallet integrated or if you don’t offer your product as part of the mobile wallet infrastructure you will not have adoption.

3.     What are the major factors driving M-Commerce adoption in the region?

–       Customer demand – Kenyans excluded from the formal banking system need safe, easy and convenient ways to pay and be paid.

–       Mobile ownership – Kenya’s high cellular penetration means that it’s easier for most people to transact from a mobile device than it is from a bank or a computer.

–       Operator innovation – Mobile networks recognised that high levels of financial exclusion in Kenya offered them a market opportunity and they developed m-commerce and mobile money products in response.

–       Mobile network market presence – Because networks have such a strong market presence with tens of thousands of agents and stores, mobile networks were able to deliver mobile money solutions to remote areas untouched by the banking system.

–       Growing smartphone penetration and mobile broadband – As more Kenyans access low-cost smartphones and as mobile data prices fall, we’ll see the nation start to adopt more sophisticated m-commerce applications such as mobile shopping.

–       Social structure – The strong social (family and community) structures in Kenya have a strong influence on how M-Commerce is adopted.

4.     What M-Commerce solutions are you offering to the market?

Sage’s E-Commerce solution is called Sage Online Tools. Sage Online Tools give customers the ability to construct and launch a marketing and an E-Commerce site using our website builder. The site built using this tool is fully responsive to any mobile form factor and has direct integration to the Sage Accounting solution of your choice. In other words Sage give consumers of our software the ability to build and launch their own mobile commerce site.

Apart from our E-Commerce functionality our accounting and payroll products also offer customers mobile functionality on iOS, Android and Windows smartphones. These mobile applications put your customer and employee information in the palm of your hand but more importantly empowers you to take your customer facing processes truly mobile – anytime, anywhere.

5.     Kindly please share any remarkable statistics about M-Commerce in the market e.g. Amount of money being exchanged in M-Commerce, Total number of merchants using M-Commerce, The time demographics on M-Commerce as it is adopted in Kenya.

Kenya racks up Sh3billion in mobile transactions each day, according to statistics from the Communications Authority of Kenya. 28% (5 million) of smartphone users buy through their mobile phone. 93% of Kenya’s mobile phone users perform a banking activity online. Mobile Ecosystem Forum

Kenya has the highest global adoption of mobile payment at 58% of all electronic payments. Mobile readiness.mastercard. According to one Nielsen study, 95% of Kenyans still pay with cash in a retail environment, 12% make use of mobile money, and just 2% use credit or debit cards. 38% of adults say their mobile phone is more important than their wallet.

6.     What do you envisage as the future of E-Commerce and M-Commerce in this market?

The future is mobile and at Sage we are giving our customers the power to grow and manage their businesses from the palm of their hand. Consumers are mobile ready and want to use convenient mobile services to pay and interact with the companies they do business with. Given the incredibly high mobile readiness of Kenyans both E-Commerce and M-Commerce is bound to grow and we expect further innovation from Kenya in this industry.

About Pieter Bosman

As the Executive Vice-President Operations: Sage International, Pieter Bosman guides the strategy for developing and acquiring software products to fuel the group’s growth in the region. He also has the operational responsibility of overseeing the development and enhancement of existing products at Sage’s regional operating companies.

Pieter also took on the role of Managing Director for Sage South Africa, with the brief of helping to spearhead the growth of Sage’s operating companies within South Africa. He joined Sage AAMEA as the Chief Technology Officer.

Before he joined Sage, Pieter spent 12 years at Momentum, where he worked in a range of R&D, business development, ecommerce and operations roles. Pieter holds degrees in mechanical engineering and aeronautical engineering as well as an MBA, all from the University of Pretoria.