BRENDAN PEO, VAIMO COO

Who can forget the excitement of the tech explosion in the nineties? In a matter of years, technology splashed onto the scene and soon was dominating conversations in the home and the boardroom. Undoubtedly this period brought significant benefits to both businesses and consumers; however, it will probably be most remembered for the many disappointments that came as a result of the market’s dramatic failure and numerous investments in technologies that failed to deliver the promised rewards.

One of the areas that appeared to hold incredible promise was mCommerce – conducting transactions on cellular devices. At this time, mobile phones were sweeping the nation. Vodacom’s launch of cellular services in 1994 drew unexpected interest and by 2000 had penetrated 17% of the population and rapidly expanding. Eager to get in on the act, companies throughout the globe launched WAP strategies with interesting results.

In 1997, for example, Coca Cola enabled two vending machines in Helsinki to accept payment via SMS. This concept spread rapidly and eventually people were paying for parking via their mobile phone. Although widely available and accessible, SMS-enabled mCommerce had obvious problems by way of security shortfalls and congestion problems.

Apple’s introduction of the iPhone however, breathed new life into mCommerce’s potential and today we see transactions on cellular phones moving from SMS systems into actual applications.

The extent of the opportunity has also evolved in the intervening years. Last year Nielsen South Africa reported that by 2010 mobile phones had topped both radio and television in usage by South Africans.

In another report into worldwide smartphone usage and mobile marketing, Google revealed that South African smartphone penetration had reached 15%. The average smartphone user in South Africa is 18-34 years old, well educated, and working full-time it said. Interestingly, the report also unveiled the strong connection South Africans have with their smartphones revealing an astounding 35% said that they would rather give up their TV than their smartphone.

The same research detailed that on average South Africans have about 15 applications installed on their smartphone and about 7 had been used during the last 30 days. What’s more, 35% of South Africans said that they preferred to use the Internet on their smartphone because it’s cheaper than on their desktop or other device. This places South Africa third only outranked by China (37%) and India (46%).

Comparing these statistics to those users that say they have no Internet access at home other than their smartphone is also interesting. The placing of the top three countries remains the same, with South Africa in third (23%), China second (25%) and India first (36%).

Smartphone penetration is undoubtedly on the rise and it’s no surprise that retailers are keeping a close eye on the revitalised opportunities offered by mCommerce. Locally, early adopters such as FNB with its banking application are already demonstrating the transactional and marketing benefits possible in this channel. However, there are many avenues in today’s mCommerce portfolio and retailers should approach this opportunity with a concise eCommerce and mCommerce strategy and the correct platforms/technology in place before you start. Failure to do so will undoubtedly result in disappointment once again.

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