Social Media Shaping Business Models in Africa

Johannesburg, South Africa – Social media in Africa is on the rise and will increasingly shape business models making it imperative for business not to ignore this medium.

“By 2016, it is estimated that there will be one billion mobile phones in Africa. This will happen at a compound annual growth rate of well over 30% that will have a $35 billion stimulus on the economy in Africa. With mobile Internet usage in Africa among the highest in the world, significant opportunities exist here to use social media in business,” said Mark Casey, director of the technology, media and telecoms industry at Deloitte at the Africa Frontiers Forum, held in Johannesburg recently.

Experts said that social media usage in Africa as in other developing parts of the world is different and needed to be thoroughly understood in order to be effective.

“Social media is doing something different in Africa as opposed to the rest of the developed world. There, most people use the Internet to find things, check e-mail, and do social media. In developing countries, we find that people use the Internet primarily for engaging in social media activities and to be entertained,” said Brett St Clair, head of new products in sub-Saharan Africa at Google SA.

Salim Amin, chairman of A24 media said that social media provides another platform for people to engage with one another. However, he cautioned that if companies do not produce a good product, the platform becomes irrelevant, as people will choose not to engage with them.

“But this does not mean people are just looking for companies with Web sites. In this new age, they are expecting to have continuous interaction and engagement from brands. This raises the question of how a company measures its return on investment in social media,” he said.

Jeremy Sampson, chairman of Interbrand Sampson said that social media is changing lives and companies are using it to do business are certainties irrespective of calculating the direct value. Sampson said social media can adjust people’s thinking about what products to buy, where to go on holiday, and what movies to watch.

“We have found that if people read three negative reviews, they will not buy a product. It is even more sobering to think that most companies in Africa still do not have a proper social media strategy,” said Sampson.

St Clair added that brands need to focus their strategies on short-term gains. He said companies need to iterate faster and change according to the needs of their clients much faster.

“Consumers are arming themselves with data. The companies that understand the feedback from their customers in real-time, and who know as much as possible about them, will have the critical advantage,” he said.

And it is in the collection of this customer data and how to use it effectively that raises the issue of how private people’s information is on the Internet.

“People need to realise that privacy is dead. It simply does not exist anymore. It is scary what big companies know about us and what we are doing online. The marketers of tomorrow will be statisticians. They will be the ones who will crunch the data and build profiles of users to be better able to sell to them on a more individual level,” said Anastasiou.

Sampson pointed out that the key to successful brand building is not about digital marketing.

“Digital brand building is to ensure meaningful relationships with consumers and being aware of what is important to them at any given point in time,” said Sampson.

Looking at how social media platforms like Facebook and LinkedIn are growing across the continent, it is clear that companies can no longer afford not to view social media as a potential business platform.

“What is even more exciting is that African problems will be solved with African solutions in the social media market. The growth of mobile devices will contribute to the empowerment of people from all walks of life with companies finding innovative ways to educate, manage their business and engage with potential customers,” said Casey.

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