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Forget BRIC - Will the Middle East & Africa Please stand up. SXSW 2014 Presentation
- 1. @Dubai_CEOs FORGET BRIC! Will the Middle East & Africa Please Stand Up Amit Vyas – Nexa, Dubai
- 2. Is the Middle East & Africa a good market for technology companies? What is the potential? How?
- 3. The Lands of Opportunity or The Lands that Time Forgot?
- 5. “At a regional level, internet users in the Middle East and Africa are the most likely to be on the major social networks, indicating how enthusiastically networking has been embraced by digital audiences in this region.” Global Web Index 2014
- 6. Social Networks DO NOT come with a user manual
- 11. Think about this for a second…
- 14. Mobile Penetration Rates Higher than Anywhere Else in the World Over 200% in some parts of the Middle East 80% in Africa
- 15. The Opportunity
- 16. Ref: Arabnet Regional online shopping didn’t really exist until 2010 Today, online shopping in the Middle East and North Africa is estimated at $1Bn, and online transactions (including flights, hotels, etc) more broadly have reached $15Bn.
- 17. Ref: Arabnet Ecommerce Average Order Value is $115 in MENA There is a variation between countries in ecommerce value: highest is Qatar/UAE around $150, lowest is Egypt $79 Saudi Arabia, UAE, and Egypt make up 93% of ecommerce business
- 18. Ref: Arabnet What has caused the change? Simple: Understanding regional differences
- 19. Ref: Arabnet 75% Cash on Delivery versus 25% Online Payments
- 21. M-PESA promotes online (mobile) transactions M-SHWARI: On-demand loans and savings. 2-5% returns
- 22. Sustainability
- 24. Ref: MXit
- 25. “Barring catastrophe, Africa's population will reach 2 billion by 2050. To get a sense of this kind of increase, consider that in 1950 there were two Europeans for every African; by 2050, on present trends, there will be two Africans for every European” The Economist
- 26. Government’s now understand the value of technological and online innovation … …even in resource rich countries
- 27. Ref: MXit
- 29. 1990 2012
- 30. Where do I start?
- 31. Take time to understand the market and the right market for your business
- 32. If you don’t have time, find a partner that does and understands how the region works
- 33. Don’t be scared of the language differences
- 34. Don’t try to define how the market should use your product – let the market do that for you
- 35. Is it safe?
Editor's Notes
- Hi – I’m Amit Vyas and I run a digital agency in Dubai that I founded in 2005. Born and grew up in England so am a non-native Middle Easterner or African but having been there for 9 years now, have been amazed at what’s happening over there.
- So, over the next 10 minutes, I’ll hopefully provide some clarity on why I love the region and provide some answers to these questions.
- Much of this has come from the sudden availibility of information. Connectivity, if you like. Back in 2005 I often wondered what kind of mistake I’d made by starting a digital agency in a place where large companies would argue with me about why they didn’t need a corporate website. This has changed.
- The 2014 global web index showed for the first time that the Middle Eastern and African populations are the most likely to be on one of the major social networks – this is significant, and shows a huge turnaround in mindset and mentality in just a few short years.
- Part of the reason for this is the message contained in this slide. Technology travels faster than ever before, An none of this comes with a user manual. So, when a platform such as Instagram suddenly lands on peoples phones, they try to understand what it is and if and how this could impact their lives. And I think that happens more in emerging markets than in more traditional markets.
- There is no greater example of this than the impact that Facebook and Twitter had on the people of Tunisia, Egypt and Libya. People were suddenly given a voice. A voice which could be heard not just by 5 or 6 trusted friends and confidants but by a entire nation and what followed has changed history.
- I was in Cairo just a few months ago and its amazing that a large proportion of street grafitti contains the Twitter and Facebook logos. There’s a huge emotional attachment to these brands – many people see FB and Twitter as their saviours.
- A results of this emotional attachment is a sense of loyalty that is every marketers dream to have with its customers.
- Its certainly no surprise to me that in another survey, both Egypt and Saudi Arabia were found to have the most engaged online populations in the world.
- So lets think about this for a second
- Imagine being blind for your entire life and then being given a pair of glasses that suddenly shows you what’s out there. Somewhere like Saudi for example where women still arent allowed to drive. They suddenly have access to information – how others live and this is having a profound effect on them.
- New meaning to ‘Mobile first’. Many africans bypassed the laptop and desktop revolutions
- But there’s a obvious reason for this. Mobile penetration is incredibly high. In the UAE alone, the mobile penetration is above 200%. Most of us have at least 2 devices. I know it sounds nuts, but that’s just how it is. In Africa, the percentage is 80% which equates to over 800 million people across the continent. 50% of videos on Youtube are watched from mobiles in Saudi
- So using this, lets talk about the opportunity for every business in this room.
- E-commerce didn’t really exist up until a few years ago. Group buying sites were the catalysts for change – everyone wants a good deal!
- The region is relatively wealthy (did I mentioned that we pay not tax) and as a result in some countries the disposable income and spending power is huge. Compare $115 with x in the Usa and x in Europe and you see what I mean here. Black Monday aside, very comparable if not more favourable than the US marketl $75 is USA?
- So how has this happaned? Well, quite simply, online businesses including the group buying sites, really started to understand how the market would work.
- And this is how they did it. Users could make a purchase online and instead of worrying about credit card safety (or even if they had a credit card), retailers started to offer cash on delivery options with all transactions. This gave shoppers a new level of trust in the system and this figure of 75% is naturally declining as confidence grows.
- In a nutshell, from necessity comes innovation and in Africa this has certainly been the case. How do you get mobile connected Africans to send, transfer or make online transactions?
- M-PESA helped to do exactly that and as the industry begins to mature, new needs are identified and solved. The recent M-Shwari prouct by Safaricom allows mobile users to not only access on-demand loans of up to $1,100 but also make cash deposits into their mobile accounts to make savings that provide a higher return on cash deposits than most banks.
- So as I start to conlude, we need to ask the question of how sustainable all of this is.
- Well, the econimist predicts that 7 out of the top 10 growing economies in the next few years will come from Afrcia. The previous previous period over the last decade had 6.
- The populations across the entire region are very young. Average ages in some countries are as young as 16, which potentially means that over the next 5 to 10 years, a vast number of people will be joining the workforce and helping to create wealth for not only themselves but for their nations. Education levels are increasing, opprtunities are also increasing.
- A population of 2 billion in less than 40 years is significant and cannot be ignored.
- And leaders are waking up to the realization that embracing innovation can only be good in the long term.
- Dubai Internet City was only a pipe dream in Dubai just over a decade ago. Within 2 years of that dream, most of the major tech companies in the world use this as their middle east and african base of operations. Similar initatives are alos there to see in Ghana, South Africa and Kenya amongst many others.
- Things happen very quickly in this region. This entire city of Dubai has been developed in less than 10 years. The worlds tallest building in less than 5.
- Things happen very quickly in this region. This entire city of Dubai has been developed in less than 10 years. The worlds tallest building in less than 5.
- But is it a safe place to do business? The answer is yes BUT (and it’s a big but) go in with your eyes open and choose the most business friendly places to start your operations.
- What place can be safer when your police force drive around in Ferarri’s and Lamborghini’s! We don’t tend to have many OJ type chases over there.