Mobile Report

Nigeria 2018



#JumiaMobileWeek




Introduction to the 4th Edition of the Nigerian Mobile Report

Juliet Anammah

CEO, Jumia Nigeria

Nigeria remains Africa’s largest mobile market, with about 162 million subscribers and a penetration rate of 84%. The number of internet users fell in 2017 as consumers responded to a poor economic climate, adopted other OTT channels for voice and data services, and as regulatory measures continued to oblige operators to disconnect unregistered SIM cards.

Despite the setbacks, we noticed four key growth drivers enhancing the adoption of smartphones in Nigeria and Africa: First, the multiplicity of affordable smartphones and a growing market for second-hand devices played a major role in driving the country’s e-commerce sector, which is estimated to be worth 13 billion USD by 2018. The third lever is the multiplication of easy payment options such as credit or debit cards payment, or even cash on delivery; and the fourth is the increasing use of social media sites (active social media users).

Welcome to the 4th edition of the Nigerian Mobile Report by Jumia. Happy reading.





" Jumia continues to lead the charge
in facilitating easy access to
affordable smartphones for the
Nigerian market "



1. Digital Nigeria 2018


Nigeria Continues to Lead as Africa's Most Populous Nation


Population



Nigeria is Swiftly Becoming a Mobile-first Country


Mobile Subscriptions



The number of mobile subscribers grew astronomically in 2017 and its penetration increased to 84% in
comparison with 53% in 2016. The availability of lower price points’ phones has paved way for more
Nigerians to own mobile phones. With an increase in the number of affordable phones entering the Nigerian
market and looking at the trajectory of growth between 2016 & 2017 (31% growth year-on-year), there is a
strong indication that by the end of 2018, there might be a 100% penetration of mobile subscriptions.

Despite Unstable Economic Climate, Sector's Contribution to GDP Remains Strong

Mobile & Telecom Economy



The mobile industry plays an increasingly important role in the socio-
economic development of the region. Mobile connectivity has become
the main platform for innovation and the driving force for greater inclusion;
while the mobile ecosystem - which includes mobile network operators
and device vendors - contributes significantly to the economic growth and
job creation. Africa boasts of a mobile subscription base of 1.04 billion,
representing 82% of its total population. The mobile economy currently
contributes 7.7% to the African GDP, worth 110 billion USD in economic
value.


Internet Connectivity Still on the Rise in Nigeria & Across the Continent


Internet Penetration



Internet Connectivity is Enabling More Social Media Users


Active Mobile Social Media Users



Internet Penetration

The number of internet users in 2017 shot up to 98 million with a 65% penetration compared to 53% in 2016. This new figure is a sum total of internet services provided through Global System for Mobile (GSM), Code Division Multiple Access (CDMA), Fixed Wired & VoIP. Nigeria still continues to lead the pack in Africa in terms of internet penetration whereas the latter stood at 34% in 2017.

Social Media

Out of the 162 million mobile subscribers in 2017 in Nigeria, only 21 million of them are smartphone users, and only 17 million smartphone users are active on social media via their mobile phones. This new figure for active mobile social media users doesn’t capture the number of active desktop social media users (those that use their desktop computer, laptop or tablet to access social media).



2. Experts' Interview


Juliet Anammah

CEO, Jumia Nigeria








"Increasing disposable income,
responsible for increase in smartphone adoption"

Olubayo Adekanmbi

Chief Transformation Officer, MTN Nigeria








"The preponderance of low cost smartphones drove
smartphone adoption in 2017"



  • Drop your Kpalasa phones: The preponderance of low-cost smartphones and the drive towards aspirational self-enhancement, coupled with exciting mobile operator-led propositions further drove smartphone penetration, with many first-timers finding a compelling reason to pick up low-priced smartphones or second-hand smartphones.

  • Short Videos/Vloggers driving mobile consumption: Peer-to-peer mobile video sharing and over-the-top video platforms drove incremental increases in internet usage, with the so-called illiterates joining the bandwagon to enjoy their latest comedy on the go. This mobile trend is shifting advertising’s focus from traditional TV to short videos shown as branded content with subtle product placement. According to Markelytics.ng’s Mobile Poll, WhatsApp is the most actively used app for video sharing and an average Nigerian spent 35 minutes per day on this platform.

  • From Me to Me-dia: The increasing mobile pro-sumption behaviour of the emerging digital natives provided a veritable platform to monetise mobile footprints beyond the traditional ad-based user-generated content that we are all familiar with. Now, we are seeing possibilities in mobile footprint equity (social influence ratings) as another form of customer risk scoring for mobile-enabled propositions like social lending, virtual guarantors, etc.

  • Phy-gital: E-commerce expanded into a dual business model that blends the physical and the digital to create an ecosystem between brands and consumers across the two worlds. A customer can order online and do a pick-up at a much safer public collection point.

  • Everything Mobile: Nigeria remains the most mobilised country in the world. With so many people accessing the internet via mobile devices the implication is that major innovations must be mobilised to deepen penetration. The fastest growing area is Mobile Betting, with up to 60 million Nigerians between the ages 18 and 40 years spending up to N1.8 billion Naira on sports betting daily (NAN).


  • Mobile Lite and Data-Savers: Customers’ concerns about “extreme” data consumption are now being addressed by the emergence of data usage management tools like with Google’s Datally. This puts the customer in control and eliminates usage phobia. For example, the app shows the current rate of data usage, and users can easily choose to block any app’s data. It also serves as a Wi-Fi finder. Browsers like Opera Mini are also making mobile browsing more data-saving for price-sensitive customers.

  • Rise of chatbots: Customers’ natural penchant for messaging/chats will drive chatbot adoption as the preferred platform for enquiry management and issue resolution. The emergence of specific purpose chatbots like EatDrinkBot, Lara.ng, Access Bank’s Tamara, and Kudi.ai will open new opportunities for more local chatbots and opportunities for versions in local languages.

  • Converged Mobile Apps: Customers’ drive for simplicity and integration will drive preferences for apps that aggregate multiple content. The growth of news platforms like the BounceNews app or Opera (each with over 1 million downloads in Nigeria) are indicative that customers want their mobile news all-in-one and not on disparate platforms.

  • Cash-less to Mobile-ness: A renewed drive towards a cashless society will drive digital payments and enhance mobile-based consumption behaviour. With the expected CashLess Lagos coming in March 2018, more customers will explore mobile payments as a payment channel for the first time. This is in addition to the possible availability of local payments on global platforms like Android, Amazon, Facebook, and Apple Pay. Many states are already exploring daily tax payment via mobile channel for small-scale entrepreneurs.

  • Offline browsing: Mobile internet penetration in the low-income segment will be further enhanced by the increased popularity of offline platforms like YouTubeGo, which allows users to download videos for offline viewing or even share the locally with friends over a direct device-to-device connection.


  • Mobile Identity-based innovations: Mobile Innovation will now be accelerated with the new NIMC Verification Service API, which allows certified third parties to verify the identities of persons enrolled in the National Identity Database. This is in addition to the now-mandatory use of National Identity Numbers (NINs) across all channels. Platform-based innovations that power on-demand or the sharing economy can now happen faster than before.

  • Local IOT innovations: Huge social transformation becomes possible when mobile is the primary basis of technology ideas. Can you imagine a future when a refrigerator can place a direct order to Jumia for a supply of milk, and a prompt payment approval is given by a bank based on preset logic because everything and anything has some form of inter-connectivity? This is the Internet of Things, which has already been promoted by MTN. It offers the opportunity to track every single cow in Nigeria, keeping them safe from the threat of cattle rustlers.

  • Mobilised freelancing/crowdsourced workforce: A large pool of unemployed Nigerians with mobile devices can join virtual workstations to serve as customer service agents on Twitter or Facebook using the same principles of social customer relationship management that aggregate on-demand experts to resolve an issue without needing their physical presence.

  • Open banking for the mobile lifestyle: With the Open Banking Nigeria drive towards standardised open source APIs, more innovative financial applications and services will be built to support multi-context customer lifestyles and serve as a precursor to the Second Payment Services Directive (PSD2). This means that in the immediate future it would be irrelevant which bank an account is domiciled in Nigeria. With the success of Bank Verification Number (BVN), open banking will fasttrack the development of more innovative financial products and services by fintechs with unlimited access to all the existing banked customers.




3. Mobile Market Trends


Lower Price Point Smartphones Still Leading the Pack




Average Price of Smartphones Continues to Dip Year-on-Year




Looking at the trajectory of the average price of phones sold on Jumia
from 2014 to date, we see a decline from 216 USD in 2014 to 100 USD
in 2017. Some of the explanations for this trend include fewer
smartphones with lower price points in 2014 compared to 2017.
Also, Asian mobile brands continue to build on their Africa-specific
strategy by introducing lower price points’ smartphones adapted to the
profiles of African users. As such, the likes of Infinix, Tecno, Fero etc, are
still among the top selling smartphone brands on Jumia in 2017.



Smartphone Sales in Africa


Sales Increased by +70% Between 2016 & 2017



Preferred Payment Method on Jumia


Cash on Delivery Ranks 1st Among the Payment Options



Smartphone Adoption in Africa


Africa's Adoption of Smartphone Devices Projected to Rise by 2020




The number of mobile phone users in Nigeria is continuously increasing. A recent
report by Twinpine describes Nigeria as officially the most “mobilized” country in
Africa – with 76% of all internet traffic in Nigeria coming through mobile devices.
This, to a large extent, justifies the volume of smartphones sold on Jumia in 2017:
we recorded a 70% growth compared to 2016.


Cash on delivery still appears to be the most preferred method of payment at
67%. 23% of our customers paid with their credit or debit card; while 10% used
mobile payment options.


The reason pay on delivery, or cash on delivery has become the most preferred
method of payment is because it enables buyers to examine the item they receive
before paying for it. If the item is good, the customer pays for it. If the item is not
the same thing seen on the website, the customer can reject the item on delivery.




4. M-Commerce & the Nigerian Customers


The Male Gender Purchased More Mobile Phones than Female

Delivered Orders by Gender in 2017



Mobile Remains Foremost in Browsing Jumia Website



Devices Used for Accessing Jumia Website



Devices

A slight increase is to be noticed in the number of customers who used their mobile devices (via the App & the website) compared to 2016. In 2016, 71% of Jumia Nigeria customers used their mobile phones to shop while 79% did so in 2017 - an additional 11% of customers accessed Jumia via their mobile phones, which confirms the strong preference for this device in Nigeria and the region as a whole. In parallel, the number of users accessing Jumia via their computers have plummeted, from 29% in 2016 to 18% in 2017. The shift - although gradual - from Jumia.com to the App is a commendable development, and we hope to see a higher conversion in 2018.

Gender

It is not surprising that there were more male than female mobile phone shoppers in 2017. In many low and middle-income markets like Nigeria & Africa, male mobile ownership is approaching saturation, particularly in urban areas. This means that women represent the vast majority of the untapped mobile market. Even among mobile owners, there is a gender gap in usage that widens for more transformational, typically higher revenue services, especially mobile internet. There is a commercial opportunity for closing the gender gap. The mobile phones category still remains the highest selling category on Jumia.



Number of Visitors on Jumia Website Peaked at +60% in 2017



Monthly Visitors on Jumia




A major increase was recorded in the number of internet users in Nigeria who visited
Jumia every month. From 9.4 million visitors in 2016, the number shot up to 15
million in 2017 (+60%)
.



Lagos Takes the Lead in the Number of Mobile Devices Sold in Nigeria



Jumia Mobile Phone Sales by Regions



Chrome Ranks 1st as the Preferred Browser for Accessing Jumia both in Nigeria and Africa






The internet browser Chrome took the lead in 2017 with 30% of Jumia customers
accessing our website through the browser, whereas in 2016, 41% of our
customers accessed Jumia website through the Opera mini browser. But
compared to 50% Chrome users in 2016, only 40% of Jumia African customers
accessed the website in 2017 via the Chrome browser.


One reason for this could be the slow progress of purchasing power from Nigerian
shoppers on Jumia. Indeed, it has been shown that users with higher levels of
income access the internet with heavier browsers like chrome – which typically
have higher system requirements. Opera mini is a lighter browser in terms of data
usage and is popular among new mobile internet users who have lower incomes
and can’t afford costly internet data packs.



5. Mobile/ IT Expert Interview

Dr. Isa Ali Ibrahim Pantami, DG NITDA

DG, National Information Technology Development Agency (NITDA)

"NITDA is Levelling the Playing Field in the ICT Sector”



I prefer to call it an even playing field not level playing field. We level the playing field to make it even for players and create competitive neutrality in the sector. In line with the above, NITDA is creating, not encouraging or I can say NITDA is leveling the playing field in the IT sector.


When I came onboard the first thing I did was to come up with a Strategic Roadmap on how to transform the IT sector and make it second to none in terms of revenue generation in the country. The overall target of the strategy is to help NITDA deliver its statutory mandate. However, Information technology (IT) development can only be achieved if NITDA puts in place the right policies, frameworks, guidelines and programs that align stakeholders and resources to foster sustainable IT value chain creation driven by innovation. The strategic roadmap focuses on how to create new value chains in the sector and strengthen the existing ecosystem. The roadmap has seven strategic pillars which are interwoven to ensure cohesiveness and collective purpose – IT Regulation, Capacity Building, Local Content development and promotion, Promotion of Government Digital Services, Digital Job Creation, Digital Inclusion and Cyber Security.


Three out of the seven pillars are related to leveling the playing field, the Agency uses its regulatory power as a major instrument to level the playing field. It has started the groundbreaking work to maintain a level playing field between Multinational and Indigenous IT companies on one hand and between Startups and Matured companies in the other hand. The rationale behind this is to balance between efficiency and creativity. Most times, the startups have the best ideas while the matured are more efficient. Multinationals follow best practices while indigenous have the best tailored solutions.


The Agency uses regulation to neutralize the sector and at the same time is exploiting its IT Project Clearance house mandate, to enforce compliance with its local content guidelines as well as the presidential executive order on local content.


Capacity Building – NITDA is actively engaged in training our youths on different IT skills and entrepreneurship to close the gaps between Multinational and Indigenous companies as well as Startups.


Local Content – we are collaborating with both umbrellas of indigenous hardware manufacturers and software associations to close the glaring gaps between our indigenous products and foreign IT products. We have issued several guidelines to them, on how to perfect their products and make them globally competitive.


In addition, the Agency is working on state-of-the-art testing labs to test and certify products before going to the market. This will give confidence to consumers that our indigenous products meet best practice standards. Furthermore, we have programs such as Startup Friday, Startup Clinic and Startup Nigeria specifically designed to help startups accelerate and incubate ideas.


NITDA’s mandate is broad; our aim is to see encompassing radical development across ICT. All devices used in telecom industry are IT devices and by defaults fall under our regulatory powers. Thus, our guidelines are very helpful to telcos. In addition, our aim is for service providers to use our guidelines to adopt and implement best practice IT standards across board. We believe in stronger collaborations with NCC to deliver our mandate; the collaboration would be mutually beneficial. We have overlapping mandates, however, we are not on cross purpose, we are in one government. Thus, the more we collaborate the better for us. Our roadmap is for the entire IT sector therefore, the more MDAs we collaborate with, the merrier for us. We also have a standing committee of NITDA and NCC.


Digital inclusion is one of our seven strategic pillars - NITDA prioritizes digital inclusion in its intervention project. NITDA provides IT infrastructure, connectivity and related capacities. Building facilities to Schools/ Higher Institutions, under-served and unserved communities. The Agency has executed several initiatives to promote digital inclusion in Nigeria, part of recent projects in the area are:

  • The National e-Agriculture project is a strategic initiative of the National Information Technology Development Agency (NITDA) in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD). It is aimed at making the various datasets of the Nigerian Agricultural sector readily available to stakeholders, while highlighting the strategic and operational components of the agricultural value chain in Nigeria.

  • More than 15 Virtual Libraries were deployed in a number of tertiary institutions. The Agency provides more than 50 computers, furniture and subscription to online libraries for research in higher institutions.

  • Campus Wireless Wide Area Network (WAN): this is a special intervention project that is targeted at Nigerian higher institutions of learning. The project involves the establishment of a fully functional campus wireless network connectivity that primarily provides campus-wide wireless Internet services. It is a model design that lays down an ICT infrastructure foundation, carefully designed for scalability to accommodate future growth and expansion. To date, the Agency has deployed more than 12 WAN.

  • Digital Job Creation Centre (DJCC): this is a model project designed to provide basic ICT facilities and Internet connectivity primarily to schools (community centres) and similar environments where teaching and learning takes place. It involves the deployment of a network of Internet connectivity, computing devices and related IT infrastructure including alternative solar power energy in the school community to ensure uninterrupted access to Internet services.

  • e-Learning Centres: these are purely educational resources, packaged in accordance with Nigerian educational curricular, and are deployed in all the DJCC. The project is to further enrich the rural communities quest for learning and for continuous after-school reading and learning by both the students and teachers.

  • IT Innovation Hub: NITDA has seen in ICT the potential to change new and old forms of economic activity. IT Innovation hub has the capacity to produce e-literate groups out of low skilled or low paid workers, unemployed people, and those with disabilities that do not have access to these ICTs. The modeled IT Innovation hub is designed to be seen as a sustainable physical centre with the necessary infrastructure to provide generic services like tele-centres, desktop publishing, Network Skills, business support, application development, training and information services to the community. The project is planned to provide a structure, which enables communities to manage their own development, by providing access to appropriate information, facilities, resources, training and services. We have three IT Innovation projects ongoing and we are partnering with Nokia for a cloud based IT Innovation hub.




Download the 2018 Nigerian Mobile Report

For more information, please contact

Olukayode Kolawole

Head of PR & Communications, Jumia Group Nigeria

[email protected]

Sources: Jumia. We Are Social. GSMA. NCC. Statistica


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