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The Impact Of Smartphones In The South African Digital Market
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The Impact Of Smartphones In The South African Digital Market
June 01, 2017 / ClickMaven

The Impact Of Smartphones In The South African Digital Market

Studies were conducted on trends in South Africa through the lens of marketers and other digital professionals, working either client-side for brands, or for agencies and consultancies as suppliers to these businesses. Before examining the business survey data, it is worth looking at the digital environment from a consumer perspective to provide essential context for the rest of the report.

In terms of the number of consumers who use the internet, South Africa was 25th in the 2016 world rankings with just under 29 million people online, amounting to 52% of the population.

In order to catch up with more digitally mature countries such as the United Kingdom or Japan, where, respectively, 93% and 91% of the population are internet users, the South African government is improving Wi-Fi coverage as more citizen services are migrating online. Like other countries across the continent, South Africa is transitioning from being a feature phone nation to a smartphone nation, with Chinese handset producers such as Infinix, Huawei and Tecno now undercutting the likes of HTC and Samsung to make smartphones more affordable.

According to research company Ovum, the smartphone penetration rate in Africa is growing at 53% year-on-year. Currently, there are 294 million smartphone users across the continent, and Ovum predicts that there will be 930 million by 2021. Research by the GSMA, which represents the interests of mobile operators worldwide, found that in 2015, mobile technologies and services were already generating 6.7% of Africa’s GDP, amounting to $150bn of economic value and supporting 3.8 million jobs.

It is not just handset producers and phone networks that are benefiting from the rise of mobile. The upsurge in smartphone usage and data consumption presents major opportunities for companies across all sectors, both for marketing products and services online, and for selling them. For the media and entertainment sector, content is being consumed digitally to an unprecedented degree.

The client-side perspective paints a rosier picture of the digital maturity of organisations in South Africa. Around a third of in-company respondents say their businesses are either digital-first (17%), or that digital permeates all their marketing activities (15%). 44% of client-side respondents say that digital permeates most of their marketing activities, and just under a fifth (18%) say that digital marketing is very much separate. Although the nation is becoming more digitally dependent, logistics efficiency, which is particularly vital for the retail sector, remains a significant challenge. New start-ups that offer last-mile delivery, or private delivery firms offering better levels of service, can help support the digital economy, with retail being the biggest beneficiary.

In the context of digital marketing capabilities, the survey data suggests that South African companies are further ahead in their digital journey than the global average, with only 26% of client side respondents across the rest of the world categorising their businesses as either digital-first (11%), or as companies where digital permeates all their marketing activities (15%).

However, the South African agency response to this question tells a conflicting story, with supply-side respondents significantly more likely than their client side counterparts to say digital marketing is very much separate (30%, compared to 18% for client-side respondents), and correspondingly less likely to say that their clients are digital-first (only 1%, compared to 17% for the client-side).

Why is there such a discrepancy? It is not unusual for agencies to take a less rosy and sometimes more realistic view of digital capabilities within a business, given that they often have the wider perspective of working across many clients in different sectors, and sometimes across different international markets.

In closing agency respondents may have significant experience working for larger, traditional businesses where the divisions between digital and non-digital departments are very apparent. Similarly, they may also be less likely to have worked for truly digital-focused companies that may have grown up without the need for agency support.

Source: Econsultancy

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