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The future of business is mobile

By DERRICK VIKIRU

If you do not have a mobile strategy already under implementation, you are late to the game.

The market is exponentially moving to mobile-everything, and the immense growth of mobile usage has left companies scrambling to catch up. Soon, the use of bulky desktop computers will be for the laggards of the technology adoption lifecycle. As much as mobile technology adoption is obvious to some, there are still many brick and mortar businesses that refuse to accept that the internet is rapidly becoming the primary means of business. According to Forbes, about 11 per cent of retail sales occurred on mobile devices in 2012. In 2016, the figure grew by up to 48 per cent, with consumers reporting ease of shopping on their mobile phones. Mark Rogowsky of Forbes reported that desktop sales have been in a freefall for years now as users gravitate to laptop, tablet, and smartphones.

According to Jumia Mobile Report, smartphone sales in Kenya will overtake those of feature handsets by the end of this year, making it possible to rapidly develop and use digital applications. GlobalData’s 2017 report indicates that shopper behaviour has shifted over the last five years, with smartphones now relied on as the go-to information source for everything from shopping to banking. The report says that by 2022 global spend via smartphone is forecast to account for 23.8 per cent of all online expenditure, up from 15.1 per cent in 2017. “Consumers choose to spend more time on smartphones. Consequently, spend via these devices is set to grow exponentially in the next five years. Key sectors aiding market acceleration via smartphone are clothing and footwear, which has the highest proportion of sales on smartphone, and food and grocery expected to be the fastest growing sector in terms of sales via smartphone to 2022,” stated the report.

Mobile penetration

Take Kenya for Example, the leading country in mobile technology adoption globally.  Kenyan businesses have leapfrogged decades of analog technology and this has directly spurred systemic economic growth. Communication Authority of Kenya (CA) reported that mobile penetration in the country hit 95 per cent between January and March 2018, pushing mobile subscriptions to grow by 3 per cent from 42.8 million to 44.1 million. This translated to a mobile penetration of 95.1 per cent, up from 94.3 per cent. In the period reviewed, data subscription grew (8.2 per cent) from 33.3 million to 36.1 million compared to the previous quarter. CA attributes this to the growth in deployment of 4G by three Mobile Network Operators and one Internet Service Provider (ISP). 

Most innovative software developers

Another research conducted by GlobalData titled Mobile Broadband Forecast, also reveals that by the end of 2022, more than 80 per cent (about 31 million) of total handsets in Kenya will be smartphones. According to Simon Andersson, GlobalData London-based analyst of the Africa and Middle East region, this increase in smartphone numbers matters as Kenya is home to some of the continent’s most innovative software developers, recently earning Nairobi the nickname Silicon Savannah.

Today, Kenya is host to a flourishing ecosystem with numerous software applications, services and social habits emerging from the country’s aptitude, and appetite for mobile transaction platforms. Slightly over 70 per cent of Kenyan adults transfer money using mobile phones — the highest percentage compared to all countries globally — and more than USD34 million are transferred via Kenyan mobile phones each month. Central Bank of Kenya (CBK) statistics indicate the volumes transacted between April 2017 and March 2018 increased by KSh219 billion to KSh3.7 trillion from KSh3.48 trillion in a similar period last year. According to The Economist, this adds up to a quarter of Kenya’s GNP. As a result, cash payments are rapidly being replaced by mobile-phone payments in virtually every sector of Kenya’s economy.

Benefits of mobile technology adoption

These activities have made Kenya the first African country to win the bid to hold the 6th bi-annual International Open Data Conference (IODC) that will be held in Nairobi in 2020. This follows an announcement made during the closing ceremony of the 5th IODC in Buenos Aires, Argentina in September 2018.

The resultant benefits of mobile technology adoption are multisectoral with wide economic and development impact. Adoption of this technology in learning institutions in Kenya – such as Shupavu291, a learning tool used by millions of young learners in Kenya to access to curriculum-approved educational content via the mobile phone – has seen the country poised to produce Africa’s most productive human capital in the medium term, according to a World Bank survey. The inaugural Human Capital Index (HCI) recently published by the World Bank shows that Kenya ties with Algeria in offering the best education and health in the continent – factors that would make them churn out most productive workers by 2036, beating large economies in Africa such as South Africa, Nigeria and Egypt. We can’t be oblivious of the fact that Kenya has made heavy investment in modern and cutting-edge technology in both health and education sectors. Undoubtedly, mobile penetration and the Internet have created opportunities for humans to find new, easier, cheaper and convenient ways of doing business. 

Derrick Vikiru is the Sub-Editor Management Magazine. Email: dvikiru@kim.ac.ke

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