Exploiting the Bottom of the Pyramid Market in Nigeria, An Emerging Market. A case of Mobile Phones and Internet Market

Introduction

The emerging markets will keep on attracting multinational companies, MNCs, as long as the market population is maintained while both disruptive and reverse innovation are considered in addressing these markets. China, despite the recent challenge with its economy, still remain a great market for most products especially the mobile phone industry. Emerging markets are unsaturated unlike what is obtained in most developed economy. In addition, these markets always welcome new innovative products with reasonable 'cost'. These markets also have their challenges like: Infrastructure: Poor road network, poor energy distribution; low income earning power; corruption; poor financial system; product imitation; security challenges and long bureaucratic process.

These factors have direct impact in markets like India, Nigeria, South Africa and some other emerging markets in Middle East and Africa. Multinationals that wishes to tap into these market must modify its leadership to be a mixture of both expatriates and local talents that could be trusted. 

Internet Access and Mobile Phone Market in Nigeria

Nigeria is alleged to be the most populous black nation in the world and also the has the largest GDP in Africa. The population of Nigeria is estimated to be about 180million while the bottom of the pyramid market is estimated to be about 75% of the population (about 135 million). Every challenge that is associated with emerging market is prominent in Nigeria. However, the new government in power has trimmed down the level of corruption to minimal while still contending with security issues and insurgency.

Currently, Nigeria has 4 major telecommunication companies, excluding any other telecommunication company with less than 10million subscribers. These market has about 130million active subscriber as at 2nd quartre of 2015. These are MTN, Globacom, Airtel and Etisalat on the scale of market share respectively. The average number of mobile phones own by any member of bottom of the pyramid in Nigeria is 2 compared to 1 that is obtainable in developed markets.

The question is why should one person own 2 mobile phones as the minimum? How will such person maintain both lines? It is important to note the peculiarity of Nigeria market compared to other emerging market. An average Nigerian is known to rather go for comparative more expensive product when comparing like for like. The belief is that the more expensive the item is, the higher the likely-hood of the authenticity of the product due to the fact that the regulatory bodies in the country does not have quality control and product standardization.

The Mobile telecommunication companies keep on introducing innovative products to gain more market share. One of the major disruptive innovation that break the market monopoly was introduced by Globacom. At the take off of mobile telecommunication in Nigeria, MTN was the premiere company and it only provided call rate billing on per minute while the cost of SIM card was as high as $500 as at 2002. Globacom which was the 2nd national carrier introduced low price for SIM card as well as call rate billed on per second basis. The innovation paid off and Globacom was able to gain a major market share. 2014/15 saw Etisalat introducing cheap and innovative data products which also paid off for the organization. Innovation is a rat race in Nigeria telecommunication industry today. 

However, all the network providers are guilty of service failure. There is drop calls as well as network failure issues on all the providers. Nigerians would rather have multiple telephone devices to address the problems from their providers than to keep complaining to regulatory body that is not really controlling the sector as it should be. Hence, m,ost Nigerians have more than one mobile phone device at every point in time.

The mobile device itself is another interesting market. The middle class could afford high end phones like iPhone but thanks to the cheap android market from China which makes the device affordable to the bottom of the pyramid. Imitation of global brands in an uncontrolled market gives the bottom of the pyramid in Nigeria the feeling of self actualization or high social status. The mobile device market is unsaturated in Nigeria because internet penetration is yet to reach 70% of the country geographical spread.

Opportunities

The internet access which about 85% of mobile device have makes online business to be gaining ground. Apart from online business, social media advertisement is growing in the country and the need to have better customer service for the data hungry consumers. It is easier for the market to bring down any poor service oriented business easily on the social media. So, more attention is being given to customer service.

Apart from online business, e-commerce is increasing and mobile money as well as mobile banking is making e-business a new trend in Nigeria. In order to catch up with the new wave in Nigeria, cloud services is gradually taking over the legacy physical servers in Nigeria, opening a new market for Data center business. Nigeria is opening up its economy for investors with the new government that is known to be "Mr Integrity". The ground is set to encourage MNCs to tap into the market. The opportunities in Nigeria is enormous.

Conclusion

Insurance is a scheme that you subscribe to in order to provide cover in case of emergency. It is worthy to insure any business regardless of the market and the opportunities there-in. Nigeria market is yet to be tapped properly. Any MNC that will be investing in the economy must however, do its background work before moving into this market. 

(Watch out for more articles from this blog)

By Olatunbosun Obileye – Institutional Data Manager (ORCID:  0000-0002-1200-0994) 

The golden data...Part1

Data is gold. The global digital business thrives on data received, manipulated, analyzed and monetized. Data in business community is a shark world and the control of the abuse of data sets by various developed economy seems not to be tight enough to protect the consumers. The research community is not immune from this shark world although most donor funded research expects that data be made available to the public, the extent to which the published datasets could be trusted is another cause of concern. Another concern is the protection of personally identifiable information of consumers whose data has been transformed into gold mine. The gold diggers are having their fills with data collected from consumers in the name of freebies online.

In another clime, researchers sometime gather data that may be sensitive, especially in health and social science field. In most cases, donor funded research are required to be open access. This implies that the publications and the data gathered during the research should be made available to the public at no cost. It may only require giving credit to the author. The fact that someone might have done massive work to gather certain data for a specific research and made open is not enough for the same data to be commercialized by another for personal gain without giving credit to the author – knowledge and intellectual property theft.

Despite the concerns of researchers, open data is creating new business opportunities for start-ups. The availability of data affords data scientists to create solutions across different sectors. One of the greatest beneficiaries of this open data is agriculture. Technologies like the Nuru and SeedTracker have impacted farming systems possibly in sub-Saharan African. These apps leverage on open data to produce solutions that address concerns in the 3rd world.

The data ecosystem is dynamic. Technologies are being developed to meet the expectations of tomorrow and most of these depend on data. Block-chain technologies can be used in almost every industry today and robotics relies on machine learning which relies on data analysis for best performance. The result is endless.

Precious is the discovery of data but the manipulation, utilization and adaptation of it to solve today and future problem is the beginning of wisdom

Obileye Olatunbosun Matthew (ORCID ID: 0000-0002-1200-0994)

Disruptive Innovation in Developing and Frontier Economies

Most African, Asian and South America countries could be considered as developing countries. They are not as fully developed in terms of market saturation, economic development, technology innovation and industrialization like the North Americans and the Europeans. The countries within these developing economies also have the power of number.

What is an emerging market? This is the economy of a nation that is growing rapidly towards being a developed economy while frontier could be seen as a developing market but with a slow growth. Digital business is a disruptive innovative way of creating a new business from your existing business. You blur design and words together to form a new business.

Emerging markets tends to embrace the "techy" world and the use of digital innovation could be a disruptive way of expanding the business of an existing organization. In the telecommunication industry where the market is gradually moving away from voice market to data driven market, start-ups are taking advantage of data mining to create new job lines. For instance, as at 2019, the development of mobile app for online bicycle rentage in Nairobi, which is an innovation from Tonny Omwansa, is gradually changing the way the students in University of Nairobi navigate on campus. The opportunities are countless.

The conventional way of doing business may not survive in today's challenging business terrain where consumers keep demanding for improved products and services at reduced price. We are seeing Uber penetrating African countries and making good success stories. In Nigeria, Uber has more competitors like Taxify and Gocada (Bolt). Both provide cheaper services to the public and seems to be gaining more acceptability in the country.

As a frontier, you have the first opportunity of winning the market trust. PassNG is an example. The start-up, which was led by group of friends that developed an archived of solved exam questions on android platform, gained much support from telecommunication providers. Airtel even allowed users to access the app on its network at no extra cost for data. The rapid growth of PassNG in between 2015 and 2017 was a game changer for the regular classroom, especially in the urban area. Other challengers came on board after the young minds have taken the lead in this sphere.

China, which is the second largest economy in the world today is thriving on innovations. The country is exporting its ideas to almost every home in Africa. In Africa, most house-hold items are now manufactured in China and these come at reduced price. China is making life easier for the bottom of the pyramid in the frontier and emerging markets using disruptive innovation.

You can make a difference in your business if you decide to sit back and reflect on how to make things better and improve on the usual way of doing a task. Sometime, just reflecting during your getaway, on the way things are done may spark an idea. Disruptive innovation need not be a big change but just an improved way of achieving a greater result.

By Olatunbosun Obileye – Institutional Data Manager (ORCID:  0000-0002-1200-0994)