During a period of three months Koen Voermans, consultant working for strategy boutique Thaesis, interviewed 26 executives, entrepreneurs, and representatives from organizations in the Kenyan publishing and mobile industry.
In the research briefing you will read about...
1. importance of the mobile phone becoming the main gateway for communication, money transfer, information, and commerce in Kenya;
2. trends and developments in the Kenyan mobile services industry including innovative new initiatives within the Kenyan context;
3. the structure and challenges of the Kenyan book and newspaper publishing industry;
4. online and mobile initiatives of Kenyan newspaper publishers;
5. the inevitable transformation of the Kenyan publishing industry driven by fierce competition of disruptive mobile substitute information and commerce service providers.
We hope you will enjoy reading the briefing and get inspired by the great developments within the Kenyan mobile and publishing industries!
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Strategy Boutique Thaesis
Kenya
Research briefing
January 27, 2011
3. In this research briefing you will read about...
1. importance of the mobile phone becoming the main gateway for
communication, money transfer, information, and commerce in
Kenya;
2. trends and developments in the Kenyan mobile services industry
including innovative new initiatives within the Kenyan context;
3. the structure and challenges of the Kenyan book and newspaper
publishing industry;
4. online and mobile initiatives of Kenyan newspaper publishers;
5. the inevitable transformation of the Kenyan publishing industry
driven by fierce competition of disruptive mobile substitute
information and commerce service providers.
4. Content
1 Statistics and images explaining the Kenyan context 6-13
ya
en text
K n
o
i nc
1 Drivers, solutions, and statistics of mobile communication 15-19
2 Drivers, solutions, and statistics of mobile money transfer 20-24
e
bil on 3 Mobile phone as a gateway for information and commerce 25-29
Mo luti 4 Trends in the four mobile segments 30-61
o
rev
1 Kenyan book publishers are educational publishers 64-68
2 Future of education is e-learning 69-74
g 3 Book publishers are in a Catch-22 with the government 75-77
shin a
bli eny 4 Kenyan newspaper publishers are media publishers 78-88
Pu K
in 5 Online and mobile initiatives of newspaper publishers 89-97
6 Two strategic challenges for Kenyan publishers 98
n
1 Transformation is inevitable for Kenyan publishers 100-104
a tio
2 Learning from and utilization of mobile success stories 105-106
sf or mtable
an nevi
Tr s i 3 Opportunity for local content in niches 107-110
i
4 Transformation strategy is required 111-114
5. Kenya in
context
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o P K Tra s ine Source: Central Bureau of Statistics, 2010
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Photos: Thaesis/Koen Voermans
14. Mobile
revolution
Before: Later:
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Photos: Thaesis/Koen Voermans
22. <--- Money transfer --->
Drivers:
Mobile penetration
Hardly any bank accounts
Simplicity
Cost effective
Many agents
23. Usage:
Pay to remote areas Save money securely
No transport costs
Pay for goods Transfer to relatives
<--- Money transfer --->
Drivers:
Mobile penetration
Hardly any bank accounts
Simplicity
Cost effective
Many agents
33. Price war
increased competition among telecom providers
1. Call rates dropped to 3-4 Kenyan Shillings per minute
2. SMS rates dropped to 1-2 Kenyan Shillings per message
35. Active
use of social networks for many purposes
56 percent 6 percent
contributed to a
got a job
discussion
69 percent 40 percent 56 percent
uploaded photos or joined a brand fan
clicked on an ad
videos group
48 percent 12 percent
met in person with an met and dated
old friend someone
Source: TNS Research International, Digital LIfe project 2010
36. Communication Money transfer
Banking
Point of Sales
Online shopping
Information Commerce
52. Communication Money transfer
Information Commerce
Business services
Webshops
Classifieds
53. Four
barriers for online or mobile commerce
1. Lack of trust
2. Social shopping culture
3. Supply chain management issues and dificulties
4. Lack of a single payment solution
54. Three
applications of mobile commerce
1. Businesses offering their goods online
2. Retail organizations offering goods in Webshops
3. Consumers or businesses advertising products
and services in Marketplaces
61. 10+ trends of the mobile revolution
Communication Money transfer
Price wars Banking
Social networks Point of Sales
Online shopping
Information Commerce
Data Collection Business services
Notification Webshops
Content Classifieds
62. Publishing in
Kenya
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65. 2009
Education in Kenya in numbers
Preprimary Primary Secondary Universities
1.9 million 8.8 million 1.5 million 177,735
children children children students
38,247 schools 26,667 schools 6,971 schools 31 institutes
of which of which of which of which
23,823 public and 18,543 public and 5,019 public and 7 public and
14,424 private 8,124 private 1,952 private 24 private
92,955 teachers 171,301 teachers 43,016 teachers -
Source: Kenyan Ministry of Education, 2010
66. Textbooks
only viable (book)publishing products
1. Government funded textbook market has a large market size
“Textbook market is 80 percent of the in total estimated
50 - 75 million euro large Kenyan publishing market”
2. Lack of a general reading culture and therefore no
general books market
“We once organized a book signing event in a supermarket.
People were coming in with pencil and paper,
not being sure who had to sign.”
68. KIE
Kenyan Institute of Education controls textbook market
1. Publishers offer their educational
books to the KIE
2. KIE, based on the curriculum,
reviews and approves the books
3. Approved books are published in a
yearly catalog and can be sold to
schools
76. Publishers are controlled by the government
Funding of Leading
textbook market transformation to
and most e-learning market
important source with disruptive
of income competitors
77. Strategies by publishers to solve the paradox
1. Digitize textbooks for e-learning solutions
2. Improve the reading culture to stimulate general books
market
3. Selling through new channels including supermarkets and
saloons
79. 123
radio stations make up the Kenyan media landscape
125
100
Number of stations or titles
75
50
25
0
Radio Television Newspapers
Source: Synovate, 2010
80. 23%
annual growth rate of radio stations over the last 10 years
125
100
Number of radio stations
75
50
25
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Synovate, 2010
81. 70.6%
of households in rural areas possess a radio
100.0%
80.0%
60.0%
Households
40.0%
20.0%
Urban
Rural
0% Total
Radio Television Mobile phone
Source: Central Bureau of Statistics, 2010
82. 90%
of men and 77% of women listen to the radio at least once a week
100.0%
80.0%
Weekly usage of mass media
60.0%
40.0%
20.0%
0%
Listens to radio Watches television Reads newspaper All three None
Source: Central Bureau of Statistics, 2010 Men
Women
83. 83%
of advertisement space is placed on radio
2%
0%
15%
Radio
83% Television
Print
Cinema
Source: Scangroup, 2010
84. 209%
growth of gross advertisement exposure since 2006
50
40
Kenyan Shillings (billions)
30
20
10
0
2006 2007 2008 2009 2010
Source: Synovate, 2010
Note: 1 Euro is 107 Kenyan Shillings, the total advertisement exposure in 2010 is 390 million Euro
85. 301,488
daily newspapers are distributed every day in 2009
350,000
Average circulation (daily newspapers)
300,000
250,000
200,000
150,000
100,000
50,000
Total
0 English
2004 2005 2006 2007 2008 2009 Swahili
Source: Central Bureau of Statistics, 2010
86. 336,635
weekly newspapers are distributed every week in 2009
350,000
Average circulation (weekly newspapers)
300,000
250,000
200,000
150,000
100,000
50,000
Total
0 English
2004 2005 2006 2007 2008 2009 Swahili
Source: Central Bureau of Statistics, 2010
87. 13.67%
net profit margin for Nation Media Group in 2009
16%
15%
14%
Net profit margin
13%
12%
11%
10%
2005 2006 2007 2008 2009
Source: Nation Media Group, 2010
88. Newspaper publishers offer radio and television
Nation Media Standard Radio Africa Media
Group Group Holding Max
The Daily Nation
Business Daily
Newspaper The East African
The Standard The Star The People
Taifa Leo (Swahili)
Classic FM
Kiss FM
Easy FM East FM
Radio Q FM
Maisha FM
Jambo Fm
Kameme FM
X FM
Smooth FM
NTV Classic TV K24
Television East Africa
KTN
Kiss TV STV
Note 1: Also broadcasting organizations (i.e. Royal Media Services, Capital FM, and KBC) are active in the market
Note 2: Only titles and stations within the Kenyan market are included
97. Kenyan newspaper publishers
have the opportunity to satisfy
customer information needs in
a fully cross-medial manner
98. Two strategic challenges for Kenyan publishers
Book publishers are forced into a Catch-22 by the Kenyan
government
Newspaper publishers have an opportunity to claim a
dominant position utilizing their cross-medial organization
99. Transformation
is inevitable
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100. Mobile will evolve to information and commerce
Communication Money transfer
Information Commerce
104. Being ahead of fierce competition from
new entrants and substitute services
105. Learning from successful mobile services
1. solve real problems of target customers
2. with understanding of the local context and needs
3. by offering data collection, notification or content services
4. in a simple and accessible way
5. utilizing the customer and rewarding him
106. Benefiting from mobile
money transfer services
which enables charging for
information and commerce services
115. Thank You
... for your attention. Discovered new opportunities? We can help you transform.
Koen Voermans, consultant of Thaesis, researched the Kenyan mobile and publishing market between
October and December 2010. He interviewed 26 executives, entrepreneurs, and representatives.
Strategy Boutique Thaesis Kanaalweg 17L-A Koen Voermans
Since 2006 3526 KL Utrecht Consultant
http://www.thaesis.nl The Netherlands koen.voermans@thaesis.nl
info@thaesis.nl +31 30 267 3514 @kvoermans
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We research trends and consult clients
We invest in our people
We are Thaesis
What we do
Thaesis is all about strategy. We develop strategies for large companies, for example in publishing and
retail. We challenge outdated assumptions that underly current business models. We understand changes
in consumer behaviour. And we help companies redefine their raison d'être in today’s business
environment. In the last year, Thaesis has worked on strategies related to e-books, mobile, digital rights
and social media. In formulating winning strategies, Thaesis combines financial analysis with business
model design. In short: we translate tomorrow’s developments into today’s answers. And we do it precise
and fast.
Strategy Boutique Thaesis Kanaalweg 17L-A Koen Voermans
Since 2006 3526 KL Utrecht Consultant
http://www.thaesis.nl The Netherlands koen.voermans@thaesis.nl
info@thaesis.nl +31 30 267 3514 @kvoermans
117. 26
executives, entrepreneurs, and representatives
Cyber School Technologies Kalahari Ratio Magazine
Daily Nation Kenya Buzz Safaricom
Dealfish Kenya Publishers Association Story Moja
East African Educational Publishers Kenyan Blogs Webring Symbiotic
eMobilis Longhorn Synovate
Homes Kenya Magazine Longman TBL Mirror Fund
InReturn Capital Mobile Planet Ushahidi
Jambopay Mocality Virtual City
Jomo Kenyatta Foundation Pesapal