Market Insight: South Africa

One of our readers expressed an interest in the mobile market of South Africa.  Without further adieu, we will jump right down to the Cape of Good Hope and get a bird’s eye view of the market for mobile apps in South Africa’s growing market.

We’ll start with the basic demographics — with total population, average income, gender and age structure:

SA-demographics

So, just shy of 53 million people, estimated credit card usage is presently low at about 5%.   That will change as both Visa and Mastercard have launched major initiatives across Africa.  Visa and Mastercard’s efforts extend not only to increasing the number of people who actually have credit cards, but brokering agreements to expand  mobile and alternative payment system with Visa and Mastercard capabilities.  Visa itself invested $110 Million in acquiring Fundamo (a mobile financial service platform reaching 34 countries) headquartered in Cape Town.  Kenya’s MPesa also has a share of the South African mobile payments market.

Convergence – that was the big word in 1998 for bringing all digital devices together with the PC, Convergence 2013+ will increasingly focus upon online payment systems.   Thus, countries like South Africa and Kenya deserve attention now and deserve even more attention later.

Currency & Income:  Like Ukraine, South Africa enjoys a high purchasing power for its dollar, except their money is the Rand.   As of today, 1 South African Rand equals $0.099 US Dollar – about 10 cents.   So, if you are engaging in marketing premium apps, that would factor into your pricing segmentation and of course localization for in-app currency.

It is appropriate to note that again, average wage means comparatively little for South Africa as wealth distribution is very heavily skewed.  South Africa has about a 30% unemployment rate and 25 million South Africans are considered to be “very poor” – between poverty and the two lowest income brackets.   This is a direct extension of its history of racial segregation and limited infrastructure outside of its major industrialized cities.   About 70% of the South African market is either not serviced or “under serviced” by banks, however Fundamo and MPesa are helping and will increasingly bridge the gap.

Language:  South Africa has ELEVEN OFFICIAL LANGUAGES: Afrikaans, English, Ndebele, Northern Sotho, Sotho, Swazi, Tswana, Tsonga, Venda, Xhosa and Zulu (courtesy of Wikipedia).   Refer to Wikipedia for in-depth examination of the languages, suffice that if you are developing in English only, you will need to adjust your marketing expectations substantially.  As English is commonly used for government and media purposes, basic English will be understood by a larger portion of South Africans than “officially indicated”.    Needless to say, language plays a huge part in mobile app localization for South Africa.

Mobile Platforms:  Usage of mobile devices is almost as diverse, but Blackberries are still the most commonly used (39%), followed by Nokia (22% of users),  with Android coming in third (about 15%).   There’s are small markets for users of iOS and Nokia (5 – 6% each), and a sliver share for Windows (less than 2%).

Synopsis of Mobile Marketing for South Africa:   South Africa is not an easy market in which to achieve mass penetration.   Unlike most other markets though, apps for Nokia and Blackberry are more likely to be in demand.   If you are developing for either, South Africa could be one of your primary markets.    As English carries more clout than the official numbers represent (i.e. fluency and first language usage), the total size of South Africa’s mobile market also warrants experimentation, especially if you are using “usage segmentation” to capture the  users who are easiest to reach – i.e. top 20% of active users and 4-5% super-user groups.If you are a South African developer, we would like to hear from you – is there anything you would like to add or clarify?

[Editor’s Note:  Source data drawn from http://opera-mobile-store.com/determining-mobile-market-reach/ ]

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Project Manager at the Opera Mobile Store providing Sales-Marketing support. Content development and research.

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