Nigerian groups target ‘100% mobile-first market’

In Nigeria, success for both tech start-ups and more conventional businesses such as banks and fast food restaurants means adapting to the age of what entrepreneurs have dubbed the “100 per cent mobile-first market”.

In the status and image-conscious country of 180m people, Smartphone’s are blasting past gold watches as the essential accessory.

“The smartphone in an average Nigerian’s life is your office, your workspace, your first-hand entertainment right there at your fingertips”, says Vien Bamidele Osagie, a young talk show host on City 105.1FM radio in Lagos.

“It is also the love of your life, in the sense that you can use it to send messages to your loved ones and use it to chat with that new hot boy and also get your daily routine done,” Ms Osagie adds.

Across Africa, Smartphone’s have begun to transform the way Africans live and work. The continent is projected to have 360m Smartphone’s by 2025, when internet penetration on the continent will hit 50 per cent, according to McKinsey Consultants.

As Smartphone’s become more affordable to lower-income Nigerians, tech companies that initially entered the market with web-based solutions are seeing a wave of possibilities unlocked by the device.

Bastian Gotter, co-founder of iROKOtv, the mobile entertainment and internet TV site for Nigerian “Nollywood” films”, says: “Our strategy is now mobile only.”

Originally launched as a YouTube channel called Nollywood Love the company in 2011 created a dedicated movie platform after attracting $3m in seed funding from US-based hedge fund Tiger Global Management.

On Monday, iROKOtv attracted $19m in investment to expand its content, including from French media group Canal+. “For us, there is no version of reality where the marriage between Africa’s most powerful communications tool [mobile] and the most prolific and loved entertainment provider [Nollywood] won’t be a joyous union,” said Jason Njoku, chief executive.

Data in Nigeria is still expensive for the majority of the population, costing the equivalent of about $5 a gigabyte. Mr Gotter believes the trend, however, is towards rapidly decreasing data costs and ever-cheaper Smartphone’s. IROKOtv is therefore preparing for the prospect of every Nigerian consuming the continent’s most popular television shows on his or her smartphone.

He will have competition from Netflix after the US video-streaming provider announced plans to enter 130 countries, including Nigeria.

Writing about the news in his blog, Njoku said Netflix being in Nigeria would have “zero impact” on iROKOtv. “Building subscription businesses are hard. Heck, we are only four years old. So why people think we will suddenly die now they are in Nigeria is totally beyond me,” he said.

Still, Mr Gotter, along with other tech entrepreneurs, wants Nigerians to use their Smartphone’s to buy other products, such as a Nollywood movie, a western DVD, toilet paper or Chinese delivery food.

It is starting to catch on, fuelled by the soaring sales of Smartphone’s via online retailers such as Jumia. It is one of several African start-ups that have been part-financed by German internet company Rocket.

Like iROKOtv, Jumia started out catering to a clientele seeking to buy online from a computer, not a phone. Now, more than 70 per cent of Jumia’s traffic comes from a mobile device, says Fatoumata Ba, Jumia Nigeria managing director.

“The most phenomenal evolution of the mobile industry in Nigeria is the exponential growth of smartphone sales”, Ms Ba says. “Jumia sold more Smartphone’s in July 2015 than we did during the whole year of 2013.”

To encourage app downloader’s to end up buying something from the ecommerce company, Jumia has recently partnered with South African telecoms group MTN to enable would-be customers with MTN mobile subscriptions to browse for free — knocking down the barrier of costly data.

Africa Courier Express, a logistics delivery company also in Nigeria’s ecommerce market, has also seen its customers “embrace more and more shopping on mobiles”, says Ercin Eksin, a co-founder. Similarly, Uzoma Dozie, chief executive of Diamond Bank, says that for his Lagos-based bank, “the more there are people with Smartphone the better for us”.

The more transactions Dozie’s clients do on the mobile app built for his bank by Vanso, a Lagos-based company, “the more information and insights I have about them”, he says. The bank’s app allows clients to do transactions that they would otherwise have to do with a debit card or cash. Options include buying a plane ticket and paying utility bills.