 | Issue: | AME 2013 |
| Article no.: | 3 | |
| Topic: | Connecting Africa, connecting the world | |
| Author: | George Ferreira | |
| Title: | VP & COO | |
| Organisation: | Samsung Electronics Africa | |
| PDF size: | 190KB |
About author
George Ferreira is the Vice President and Chief Operating Officer at Samsung Electronics Africa, where he is responsible for the daily operations of the company. Prior to this role, Mr. Ferreira was the Enterprise Lead for East and Southern Africa at Microsoft, having also been invited to the Circle of Excellence in both 2008 and 2009.
George Ferreira has a BSc. in Civil Engineering.
Article abstract
In 2013, for the first time, the combined GDPs of the emerging markets will exceed that of developed markets. Africa is not only adopting technologies from abroad it is creating its own technologies that will change Africa’s interactions internally and with the rest of the world. It’s now time for Africa to make its mark by improving the quality and quantity of their offerings and by developing products and programmers that meet the unique needs, resources, and conditions of Africa.
Full Article
It’s no secret that emerging markets are becoming integral participants of the global economy. In fact, the rapid growth in these markets is pushing businesses towards adapting and creating products and service offerings to cater for such markets – across all industries and sectors.
Recent Forbes research1 highlights that the expected growth in emerging markets is estimated at a rate two or three times faster than developed nations such as the US. Notably, one of the biggest trends coming out of these regions is the fast-paced technological advancement which is shaping their digital economies.
In fact, the African continent is on the brink of a new technological revolution. We are seeing innovative ideas coming to the fore from various African countries and the creation of new technologies that will essentially change how Africa interacts with each other and with the rest of the world.
Coming from a point of consuming international technological aids, Africa is now in the position of creating these advancements through innovative and competitive thinking. An example of this is the R800 million technological park, Ghana Cyber City, which is to be built in Accra, Ghana. And it’s not just Ghana. One of the advantages of doing business in Africa is that there are many emerging hubs that are fast becoming gateways into Africa including Kenya, Mozambique, Nigeria – all offering vast business potential for entrepreneurs and international companies alike. In fact, the recognition of Small and Medium Enterprises (SMEs) is an integral part to Africa’s growth as it is these enterprises that keep the economies growing and in many instances, a SME is where innovation starts.
Many African countries are opening their doors to international opportunity and are also adapting their regulations to allow for more leeway in terms of growing entrepreneurs – allowing more mutually beneficial engagement with international businesses. International companies who are keen on expanding into Africa are required to adapt to the rapid growth currently happening on the continent and offer custom-made strategies, products and services.
The growth potential in Africa begs us to ask the question: what are entrepreneurs and companies required to consider when contemplating business in Africa? Importantly, insight into concerns of the country, and the continent as a whole will determine what is required by its consumers. Because the risks and requirements vary from country to country so too do the opportunities. An adaptation of products and services are essential in fulfilling the specific needs of the various African countries. What’s more, consideration of skills, development and education through local up-liftment is essential to provide relief to needy communities.
As such, the African continent presents a number of unique challenges and opportunities which require a carefully cultivated understanding by suppliers. By investing in research and development programmes that consider best practice for the African continent, businesses will be able to devise a targeted basket of products. What’s more, leading-edge technology can be adapted and tailored to conform to the niche consumer requirements of each country.
Smartphone ecosystems
Take for example the mobile revolution. If we look at mobile statistics, almost half the population of the earth now uses mobile communications. A billion mobile subscribers were added in the last four years to leave the total standing at 3.2 billion. Of this, smartphones in use worldwide has now broken the one billion mark. mobiThinking calculates that global smartphone penetration is now 16.7 per cent. This time last year there were 708 million smartphones in use worldwide. That’s a 46.6 per cent growth rate in a year and despite this growth, there are still many people who would appreciate the social and economic benefits of mobile technology but are unable to access it now – highlighting a huge opportunity for future growth as well as a challenge to all players in the industry to expand the scope of products and services to tap into this demand.
Given the strong growth trajectory and pace of innovation, it is estimated that over the next few years we will see continued growth with a further 700 million subscribers expected to be added by 2017 and the four billion mark to be passed in 2018. Emerging markets are the major engines of mobile connection and subscriber growth – in particular Asia Pacific will add nearly half of all new connections between now and 2017 (1.4 billion) and will remain at just under 50 per cent of both global connections and subscribers. Latin America and Africa combined will add the next 20 per cent, representing 595 million new connections.
Additionally, as we know, data continues to be a major area of growth for mobile operators. As Cisco reported in their recent Visual Networking Index (VNI), the volume of mobile broadband (MBB) traffic has been doubling every year, reaching 1,577 Petabytes per month in 2013 (the equivalent of 500 billion .mp3 files or 800 million hours of streaming HD video8). What’s more, it is estimated that smartphones consume 92 per cent of global mobile data traffic – despite only making up 16 – 18 per cent of the handsets in use globally and that data growth is forecasted to reach 11,156 Petabytes by 2017. The rate of growth is underlined by the fact that total traffic volumes in 2012 were as high as all prior years combined. Furthermore, this growth hasn’t been isolated to one area – all regions, including Africa – have been showing impressive growth rates.
As such, it is evident that consumers are faced with an abundance of technological choices and considerations (broadband access for example) when selecting a mobile device. And while it is commonly known that the race for improved performance and enhanced features is ongoing between the major vendors, the reality is that there is often very little separating one vendor’s offering from that of another.
In fact, nowadays with the very discerning existing market as well as the techno-adept emerging younger generation, the choice of smartphone often has much less to do with devices and more to do with the user experience and value add a brand can offer. So today while the battle of the subscriber may be lost, the battle in terms of access, not only from a broadband point of view, but certainly from an value added access one, has just began.
A mobile ecosystem determines the way an application is discovered and used and is understood to be a working combination of device, operating system and delivery environment. The crux then is to develop an ecosystem-based offering that emphasises not only a high quantity of apps, but more importantly, high-quality apps and services that speak to a direct need in the market.
By analysing the specific needs of the market, and researching and developing solutions that address these desires, a brand can increase customer satisfaction. A typical example of our focus on delivering benchmarked eco-systems is the launch of the S4 smartphone.
The S4 ecosystem features a 24-month Accidental Damage from Handling (ADH) warranty to cover screen and liquid damages specifically for the Africa market to the handset at no extra charge; interactive learning materials and training from Learnthings Africa; smart mobile TV applications with MultiChoice Africa; Universal Music’s Kleek app which provides advanced access to music and interviews with artists; finance through Blue Financial Services, which will allow employees to acquire a full range of products through an employee purchase programme whereby they pay through a payroll deduction every month; sports training from professionals with Smart Trainer; a data service that will provide all new and existing smart device users with 1 GB of free Wi-Fi access per month, for 12 months at more than 1 200 AlwaysOn hotspots around South Africa; and the Social Network Payment (SNP) payment portal.
An eco-system that offers more choice, more flexibility, more value added benefits on top of a premium device. Now that’s forward thinking.
Synergistic partnerships
Evidently, it has become important to strike a balance between developing high-tech innovations that carry brands in to the future and on top of that, creating a sustainable eco-system that primarily supports the needs of the consumers that use these devices. Value added services are considered a prerequisite in the fast-paced, challenging environment that exists today and providers will need to continue to find creative ways to exceed expectations by fine-tuning and enhancing their eco-system offering in line with anticipated future demands.
The African continent poses many opportunities for investors due to its rapid growth and development, but as Africa operates differently to any other part of the world, investors are required to act and think differently when expanding into its regions. With 2013 set to be a tipping point year for the global economy, in which for the first time the combined GDPs of the emerging markets will exceed that of developed markets, it’s time for Africa to make its mark.
Brands operating or investing in Africa will need to constantly improve the quality and quantity of their offerings to the African market and continue to develop products and programmers that meet the unique needs, resources, and conditions of Africa. In addition, they will need to persist in their efforts to identify and join forces with companies that embrace the African business strategy. The knock-on effects are not only a continued footprint growth in Africa, but also the concurrent growth of the continent through strong investment into Africa.
1 http://www.forbes.com/fdc/welcome_mjx.shtml
