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Mobile phones the next big disruptor of traditional business models

23rd July 2015

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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The mobile phone is creating unprecedented opportunities for small and medium-sized businesses across the African continent as it disrupts the traditional roles businesses play.

The smartphone, which enabled users to cross boundaries, develop solutions to specific challenges and decentralise infrastructure, has emerged as one of the biggest disruptions to the way businesses interact with consumers – and vice versa – but has also opened up some of the biggest opportunities.

This gave small businesses a leg up as businesses leverage Facebook, Instagram and WhatsApp, besides other apps, which provided efficient, cost effective platforms for business to interact with their consumers, Facebook sub-Saharan Africa client partner Aidan Baigrie said on Thursday.

Speaking at the Frontier Forum New Tech for New Africa discussion, in Sandton, he said consumers’ increasing use of their mobile phones for financial services, voice calling through over-the-top players and online retail had placed the consumer next to the product or service and collapsed value chains.

The retail sector had been fundamentally disrupted, with e-commerce rapidly growing at about 25% a year in South Africa, compared with the single-digit growth of traditional retail.

WeChat Africa head Brett Loubser cited the extensive disruption of taxi service Uber, which built itself into a $50-billion company in four years, a concept he believed would happen “again and again” with many more services expected to emerge through the sole use of mobile phones.

“That is what mobile has done,” he said, adding that mobile devices were also enabling Africans to develop technological solutions for the continent’s own unique problems and further shaking up business strategies and models.

With 75% of small businesses now leveraging mobile in one form or another, a fundamental shift in operations was occurring, with none more visible than the change in the way Facebook operated within just four years, Baigrie said.

Of the 200-million to 250-million Internet users across Africa, 120-million were now connected to Facebook, mostly using their mobile devices.

In South Africa, there were 12-million Facebook users, up from 11-million six months ago, with 95% accessing the social media platform through their mobile phone, a trend that has taken Facebook from a social business to a media business.

“We know mobile is a big deal, [but] we would not think [it was] to that extent,” he said, pointing out that it was becoming imperative for businesses to develop a mobile strategy, particularly as the mobile phone was starting to provide businesses with the potential for personalised marketing and connecting with consumers better.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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