Indeed, the economy of mobile
apps, which is driven by the rising obsession for smartphones, is a huge one.
Statistics are contradictory but they all point to a high growth rate in
consumption.
According to eMarketer, a global
market analytical platform, Nigeria’s smartphone consumption hits 23.1 million
his year. The country, which occupies the 17th position on global ranking, is
predicted to reach 34 million users in the next two years precisely in 2018.
However, statista.com, another research organisation, puts the current
consumption figure at 13.2 million. It predicts that another new 10.1 million
subscribers, it predicts, will join the number in four years. That puts the
four-year growth rate at about 76 per cent.
Offering an idea on the number of
Nigerians that subscribe to smartphones in November, the Nigerian
Communications Commission puts the figure of the Internet users at 97.21
million. Expectedly, some of the Internet usage may come from laptop and
desktop computers.
But given other statistics, which
posits that 95 per cent Nigerians access the Internet on mobile devices, the
number of smartphone users, according to the NCC research, is far higher than
23.1 or 13.2 million estimates given by foreign researchers. Understandably,
the overseas statistics may have excluded thousands of smart gadget lovers that
resort to ‘tokunbo’ market for their choice phones on daily basis.
Though statistics on mobile apps
are rare, data on smartphone subscribers can always give a clue. Yusuf Hassan,
a UK-based Nigerian developer, puts this in clearer terms. “The higher the
number of smartphone penetration in Nigeria the bigger the app industry will
undoubtedly become,” Hassan added.
Findings by our correspondent,
showed that a mobile phone user consumes between 25 and 100 mobile apps (or
more), bringing the average consumption to 62.5. The investigation also
revealed that first-time users tend to subscribe to more apps than other older
users.
Dele Momodu, a roadside app
‘vendor’, explains this, “First-time users tend to subscribe for higher number
of apps because they are not concerned about benefits. They love to see the
icons on their phone screens as they flip. Performance of the apps they
download is secondary to them.
“But as they grown older in app
consumption, they begin to value the utility they derive from a specific app.
That is when they begin to uninstall the ones that are not relevant to their
day-to-day routines.”
Dominance of foreign tech looms
Unfortunately, the app market is a
shadow of its parent telecommunications industry, in terms of its ability to
domesticate its commercial gains. With Nigeria inadvertently reducing itself to
a consuming nation, local developers have started grumbling – saying market is
not yet a money-making venture. More sadly, they are not sure the industry will
eventually create visible local impacts as foreign tech companies continue to
extend their reach in the local industry.
The users are here but the app
economy is remotely operated and managed abroad. This, experts, say portends
great danger for the economy, which they argue is losing in terms of tax
revenues, individual earnings, local capacity building and other benefits.
Speaking on the unbalanced
development of app business, Hassan, who created Tutlub, an Islamic social app,
observes that almost every money earned from mobile app are repatriated to
foreign countries who supply the expertise.
He says, “The market and its
revenue are huge but 99 per cent of the money is still going back to foreign
companies. Most of these apps are developed and owned by foreigners. As a
result, the revenue ends up in foreign land. This is different from a brick and
mortar business, which requires presence in Nigeria. In this business, everything
is done online. There is no need for tax, no employment opportunity for
Nigerian citizens in Nigeria and no benefits to the economy.
“Mobile app market is part of the
overall tech industry. It is the trending part of the industry nowadays; this
is because smart phone penetration is not only as a major means of
communication but also as a main commerce channel for some companies.
“However, just as it is with any
technology trend in Nigeria, they do not bring development per se but also an
adopted trend. This creates the problem in management, sustainability and, most
especially, lack of infrastructure to support the adoption.
“Using the Internet as an example,
many have said that poor infrastructure is holding back broadband penetration
in Nigeria. Most Internet users make use of mobile data, which is very
expensive. The Internet penetration would have been faster and cheaper if
telecommunication industry, in relation to landline, was in good shape and
structured before the adoption.
“In relation to app industry,
there are different category of apps ranging from retail, travel, social, game,
finance to entertainment app and many others. You can see that these categories
represent different aspects of our life, some of which are business-related
while others are not. This dictates the type of monetisation process that is
used in different categories of app.”
But Hassan does not blame the
foreign firms that have ‘hijacked’ the supposed wealth-creating industry. He
says Nigerian firms lack the requisite government’s support necessary to grow
start-ups that can compete both locally and at global stage.
“We cannot totally blame these
companies. These tech companies are successful as a result of the supports they
are getting from their governments, early stage investors and many other
benefits in their countries,” he notes.
Hassan’s explanation is a familiar
tale across different sectors of Nigerian economy – industry, agriculture,
art/entertainment and just every other profession. Operators complain of poor
government’s interest in their contributions to national development.
But like many others have done,
some techies have braved the odds and have rolled out iconic brands that are
changing how phone users explore their devices. Nonetheless, while the complaints
continue – those who have successfully churned out apps say they cannot turn
their innovations into commercially viable businesses.
Poor e-payment killing app market
In countries where mobile apps are
creating massive start-ups that have become key drivers of the new industrial
order, premium apps are downloaded at fees, just as payment is done with the
use of debit cards via online.
In Nigeria however, e-payment
infrastructure, which drives app purchase in the Europe and America for example,
is still at infancy stage to say the least. Many a time, transactions using
Nigeria-authorised debit cards are turned down.
iROKOtv, a movie channel developed
by Nigerians, took off in the United Kingdom where it also got its start-up
funding. The company came to Nigeria subsequently when it realised that its
business could do better in the country. But a critical challenge the company
faced in the country came from poor online payment system. Those who were
willing to download and pay for the Afro-centric app were frustrated by stalled
online payment process. Hence, the operator returned to the UK to refocus on
Nigerians in the Diaspora
Hassan says the iROKOtv experience
is a major reason Nigerian app owners cannot count on returns from subscription
to monetise their products.
“Nigerians are making good apps;
and people are willing to buy them. But subscribers cannot use Visa or
Mastercard to purchase online. If I put a game online, people may not be able
to download and pay because I will use a merchant who may not accept
Nigeria-issued debit cards.
“There are cases when people want
to purchase but have to route money to me in the UK to help them transact the
business because their cards will not be accepted. This a major issue that is
affecting Nigerian app developers. They are restricted to other monetisation
avenues such as advertising which may not be viable for a start,” Hassan
narrates.
Nigerians receive the new Hutlub,
according to Hassan, overwhelmingly. But for reasons that are strongly
connected with poor e-payment, the developer says selling the app here, which
is its biggest market, is not a feasible option.
“If one wants to distribute apps
in Nigeria, one should be in the country to study the payment system; know how
it works and look at the possibility of entering into partnership. The
challenge is not with the users but access to payment platforms,” he says.
The most successful e-commerce
giants in Nigeria are Konga and Jumia. The two firms, unlike what obtains in
the Europe and America, adopted payment-on-delivery. Their style, considered as
an antithesis of e-commerce, has become a norm.
Initially, new entrants use
payment on delivery to build confidence. But why have Jumia or Konga not
ditched it for a more convenient mode supposing trust is the only thing at
stake? It is obvious that there is more to confidence in paying with cash –
perhaps because that is the most workable method of completing online purchase
in Nigeria.
With Tellow, one could make
virtually all telecommunications enquiries such as data plans, call plans,
value-added services, airtime loan and others. Besides Tellow, Royston Yinkore
and his other Nigerian colleagues that created the app, they have BT SmartTalk,
BT MeetMe, BT Mobile, TrafficButter and Kenyan Traffic to their credit.
The apps they developed –
notwithstanding their practical application – could not be described as
commercially successful innovations. Yinkore gives an explanation that applies
to the entire market.
Transferred skills from web design
not good enough
In an interview with our
correspondent, Yinkore says Nigerian app market is still at infancy stage. Lack
of requisite skills, the developer says, is a key challenge that is currently
chocking Nigerian app market. He says some of the developers are merely
transferring web-development skills to app creation, which affects the quality
of apps churned out. According to him, most companies look abroad for expertise
whenever premium is placed on quality.
He says, “It is important to also
restate that Nigeria’s mobile apps industry is still in its infancy, and a
large proportion of the skill-base is in web design/development. There are a
growing number of mobile apps being developed. But the quality of end-products is
mostly not of international standard yet. But given that most apps are simple
nowadays, this is not so much of a problem. However, when highest quality is
demanded, especially for a platform like iOS, businesses often look abroad.
“The market is actually in its
infancy. Compared to the rest of the developed world, there have not been many
activities on the local app development scene. But there are still a lot of
opportunities in the relatively-young Nigerian app development market,” he
says.
Like many developers, Yinkore’s
references when it comes to successful apps in Nigeria are Jumia and Konga,
platforms developed as support tools to sell as apps. One could also argue that
Jumia and Konga businesses drove the popularity of the apps and not the other
way.
Another app Yinkore refers to as a
successful one is Uber, a fully UK-owned platform.
But as for the tech expert,
Nigerian youths should focus on the potential of the market to create wealth in
the coming years rather than fixating on the current challenges. He points out
emerging e-commerce as one of a golden aspect of the telecoms-driven
industry.
He notes, “We can also look at the
apps that allow Nigerians to make money by offering services on those
platforms. A notable example is the Uber app, which allows Nigerians to make
money from providing transportation services via the platform.”
Interestingly, Yinkore says,
innovative youths, like their foreign counterparts, are not constrained by
physical barriers like in the case of brick-and-mortar businesses.
“The global reach and availability
of app stores, namely Google Play and iTunes, give Nigerian app developers
access to the rest of the world. For example, the Tellow App is designed to be
global in terms of design and usage. So, there are viable global
interconnectivity routes,” he avers.
A Lagos-based website designer,
Olaolu Ogundeji, also says that local developers have yet to scale the major
hurdle to unveiling a successful app. He argues that apps must be able to
“disrupt our daily routine of solving tasks” for them to fly, commercially
speaking.
“I believe there are viable
routes, and one main hurdle Nigerian app developers need to scale through is
the big idea behind the app development. Apps developed in Nigeria must be able
disrupt our daily routine of solving tasks, while making us function
effectively.”
Ogundeji says the biggest app
contracts in the country are outsourced to foreign firms. This, he says, limits
the potential of local start-ups.
“The main crux is for app
developers to create innovative avenues to generate revenue. There are several
challenges that an app can help solve – traffic, security and health,” he says.
According to analytics, Jumia is
the only indigenous firm in the rank of 20 most downloaded apps in Nigeria.
This implies that acceptance of local apps is still low.
While Nigerian experts struggle,
apps are creating new millionaires in other parts of the countries.
Originally published in punchng.com
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