By Jonah Nwokpoku
Mobile commerce, a term used to describe transactions through mobile devices has become a dominant trend in e-commerce. Mobile commerce started with consumers researching with their devices and then buying offline or through desktop computers but has since the last decade dominated both search and purchases through mobile, accounting for about 70 per cent of online purchases globally.
According to recent statistics, mobile commerce is worth $230 billion, about N46 trillion globally with Asia representing almost half of the market, and has been forecast to reach $700 billion in 2017.
According to BI Intelligence, in January 2013, 29 per cent of mobile users have now made a purchase with their phones. Bank of America predicts $67.1 billion in purchases will be made from mobile devices by European and U.S. shoppers in 2015.
In Africa however, Nigeria is poised to become one of the most mobile-savvy countries in the world with an astounding 140 million mobile subscribers in 2015 according to recent Financial Times report, transforming the way companies do business in Nigeria and how they address the customer.
According to a report released recently by Nigeria’s online retailer, Jumia.com, this phenomenal evolution of the mobile industry in Nigeria is being driven by the exponential growth of smartphone sales. Jumia noted in the report that it sold more smartphones in July 2015 than during the whole of 2013.
“It is estimated that there are 30 per cent of smartphone users among the 140 million mobile subscribers and this share will only get bigger with national smartphone sales in Nigeria expected to rocket to 12 million before the end of 2015,” noted the white paper which was made available to Vanguard.
According to the report, smartphone acquisition in Nigeria has been driven by three factors. These include: Entry of new smart smartphone retailers into the Nigerian market, which resulted to a substantial price crash, thereby making it more accessible to a larger segment of the population.
The average price of smartphones, the report said, using the online retailer’s indices showed that there was a drastic reduction in the price of smartphone from about N55, 000 in 2013 to about N25, 000 by the first half of 2015. The other factor is the competition which has multiplied significantly in this entry-level market with the introduction of smartphone retailers such as Infinix and InnJoo currently selling smartphones as cheap as N10, 000.
“Infinix and InnJoo both understood the need to target the entry-level market and to sell their phones through online platforms. InnJoo entered the Nigerian market exclusively through Jumia while Infinix has repeatedly launched its smartphones in exclusivity with Jumia.
This fierce competition is driven by Jumia who has been pressuring the smartphone retailers to bring their prices down since its creation in 2012. Such competition can only lead the way to even better offers for the smartphone-savvy user,” said the report.
The other driver of the mobile evolution is the youth population who the smartphone retailers in partnership with online retailers like Jumia strategically targeted with affordable smart devices.
The youth segment is an imperative for success in the Nigerian market as they represent 62.38 per cent of the population and are the most tech-savvy. According to an AT Kearney and Quartz Study released in 2014, Nigeria is 2nd after Brazil in the ultra-connected population ranking, as 66 per cent of Nigerians are online at least once every hour and 20 per cent use internet at least 10 times a day.
This is a trend that is redefining how most businesses approach their marketing strategies today and has been settling in rapidly into the Nigerian landscape. As the Jumia report pointed out, 70 per cent of its users accessed the Jumia online shop via their phones.
This means that more than being user-friendly via computer; a website’s first imperative is to be completely mobile user friendly. This also shows that e-commerce in Nigeria has been mobile commerce all along, providing an optimized version of their website for mobile as well as applications.
Another significant trend in the mobile evolution is mobile applications. Everyday all over the world and in many tech hubs across Nigeria, mobile applications are developed to serve different purposes, creating more relevance for smarphones. These software applications are developed specifically for use on small devices such as smartphones or tablets and have recently become the favourite access to content on a smartphone.
The infographics of app download on the Jumia white paper showed that the online retailer had 255 per cent more app downloads on both iOS and Android in the first half of 2015 than through the entire 2014. The data showed that the number of downloads on Android per month grew by 90 per cent between January and June 2015, Android remaining the favourite operating system in Nigeria with a whopping 93 per cent of app downloads done through the Google play store.
Why app remain popular in Nigeria
Mobile application has remained popular method of accessing the internet on smartphone because it provides an easier and facilitated access to content, facilitated access to the website is also provided by the ability to generate push notifications on smartphones, including the fact that applications consume less data as Jumia application studies show that mobile users using the Jumia app compared to the mobile version of the website spend 3 to 5 times less data for similar actions.
An illustrating infographics show that Jumia Nigeria App is the 8th most downloaded free app ranking on the Google play store, right after Instagram and is the first mobile retailer in the ranking.
A further analysis of the Jumia application usage, show that Nigerians seem to be much more comfortable and predisposed to navigating on the app than on the mobile version. They spend on average more time on the app. Average duration of a session on the app between January and June 2015 is 9 minutes compared to 6 minutes on the mobile version of the website or the computer.