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)
No comments:
Post a Comment