The mobile phone revolution in Sub-Saharan Africa and its impact on Last Mile Distributors
As we partner with manufacturers and distributors in emerging markets and help them manage or scale their operations, there is one clear variable that ultimately influences the way they do business: the penetration of the mobile phone.
Over the last years, we have seen the share of cash payments decrease as mobile phone penetration is accelerating mobile money as the preferred way to pay. All of the countries in the Sub-Saharan Africa region — even the ones with a low penetration of feature phones — are now turning their attention towards the smartphones. This will benefit the Last Mile Distributors (LMDs) immensely, by creating new ways of interaction with their clients. This blog will explore where Sub-Saharan Africa stands in terms of mobile phone access, the implications for the LMDs and how is Upya supporting them.
The Mobile Phone Market
By the end of 2020, 495 million people were subscribing to mobile services in Sub-Saharan Africa. This represents 46% of the region’s population. 60% of them were connected to the mobile internet, so around 28% of the region’s population. [The Mobile Economy] By 2025, it is forecasted that 39% of the population will access the internet through their phones. After the electrical grid and the brick and mortar bank, Africa is once again using a new technology to bypass some which are quickly becoming out of date — the landline and a computer dependent internet access. The Covid pandemic has increased demand for strong connectivity and 4G adoption is expected to double in Sub-Saharan Africa to 28% by 2025.
Reaching the Bottom Of the Pyramid
The pandemic has played a massive role in bringing to light the benefits of digital economies to conduct professional activities and stay connected when physical contact becomes limited. Mobile phone penetration accelerated with mobile operators offering fee waivers on mobile money transactions, discounts on mobile tariffs and an increased digital educational, training or business related content.
LMDs and manufacturers, in partnerships with financial institutions, started selling handsets through paygo type financing models based on daily payments or with contracts lengths reaching 3 years, making it available to daily wage workers. More mobile phones in customers’ hands is accelerating the available product range now offered on paygo. Traditionally mainly used in the Solar Home System space, we now see cookstoves, Farm-as-a-Service, WASH and even Cooling-as-a-Service being sold under paygo type deals.
The Gender Gap
However, if Sub-Saharan Africa is to make the most of this revolution, increased smartphone penetration has to happen in an equitable fashion. This is not currently the case. The gender gap is real and widening as the user progresses on his journey from using a feature phone to browsing the internet on his smartphone.
Unsurprisingly, the gender gap is more prevalent in rural areas where social norms can be more restrictive than in urban areas. In Sub-Saharan Africa, women are 41% less likely to use mobile internet with the main barrier still being the cost of smartphones. Most manufacturers are now offering more affordable handsets, even if this comes with some drawbacks. An investigation conducted by a global network of civil society organisations concluded that some of the more affordable models were sold with out of date exploitation systems (some as old as dating from 2013), leading to a poor experience and security vulnerabilities. The other main barriers that stand in the way of women accessing mobile internet are low literacy rates and a lack of digital skills. These are slowly being overcome by manufacturers offering KaiOS enabled handsets, enabling voice commands that can interpret local languages.
In the medium to long term, in order to gain access to female customers — a customer base which is more difficult to access — LMDs are likely to look for women who can become the community interface between themselves and the other women in their areas. Being equipped with smartphones will play an important role in bridging the gender gap.
Where Upya Adds Value
As the next phase of this mobile phone revolution takes place, there is a clear opportunity for LMDs to keep in contact with their customer base and strengthen their existing relationship.
To facilitate this process, Upya has launched Wingu : a client facing app that enables LMDs’ clients to keep track of their ongoing contracts and payments, refer friends and families and be a click away from a live chat with a customer service representative. The LMDs’ will benefit by reducing costs of sending agents to interact with customers and sell, while the users will have more control over their contract and overall service experience. The clients can access the catalogue of products available through the Wingu shop tab and can purchase a product or refer friends and family, earning financial rewards along the way.
Upya is currently working across +20 countries in Africa, South-East Asia and India to deploy SHS, cookstoves, pico-solar, water filters, productive use equipment and more. If you are an LMD interested in our Wingu Client facing app, get in touch with us at info@upya.io for a chat or to set up a free demonstration of our solution.
