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Jun252015

Mobile Phone Shopping to Create Efficient Markets across Borders

Thursday, June 25, 2015 at 9:08AM

An anticipated game-changing revolution in African trading set for 2013 is getting one innovative business very excited.

Southern African mobile phone “m-commerce” pioneer moWoza (mowoza.com) is developing new ways of selling services and products through mobile phones and developing the networks and infrastructure to capitalize on coming changes in Africa as cross-border trade is liberalized.

It is already selling food packages containing well-known South African brands that can be ordered by migrants on their mobile phones and then delivered to recipients – family or friends – even in remote and hard-to-reach communities. The service is currently operating between Mozambique and South Africa – the two countries share a border.

The start-up hopes to help the millions of migrant workers and small traders who contribute to the constant flow of trade and wealth between states in Africa. These people face many obstacles, including bureaucratic red tape, corruption and harassment.

Cross-border trade by economic migrants is largely informal. moWoza hopes to make it formal and efficient while reducing exploitation of migrants and corrupt practices by officials. By providing an easy-to-use mobile phone service, it hopes to build trust with these transactions.

Africa is a market of a billion people worth US $2 trillion in trade and business, but the World Bank estimates the continent is losing billions of dollars in potential earnings because of high trade barriers. It found that it is easier for African countries to trade with the rest of the world than with other African countries.

The continent’s leaders are calling for a continent-wide free trade area by 2017.

Studies by the World Bank and others have repeatedly shown that inefficient transport and trade barriers translate into higher prices of goods for consumers as importers pass along high transport costs to consumers. Food prices remain extremely high in Africa – almost 25 per cent higher than they were in 2006, according to the World Bank. In developing countries, people normally spend up to 80 per cent of their incomes on food.

With the world in the grip of an ongoing food crisis brought about by multiple factors – including growing populations, environmental challenges such as drought and soil depletion, declining rural economies, inefficient farming methods and commodity speculation – measures that increase efficiencies and trade can be a powerful counterweight and help drive prices back down again.

moWoza – mo stands for mobile and Woza is a Zulu word meaning running -sells a range of products including basic foodstuffs to a target market of cross-border migrants in Southern Africa. moWoza estimates there are 7 million migrant and cross-border shoppers in South Africa alone, and it’s building a network reaching into remote communities to deliver packages ordered through its m-commerce service on mobile phones.

moWoza aims to open up access to products in these underserved markets.

moWoza is trying to position itself for the new opportunities that will arise when, in 2013, 23 African borders open for regional trade, creating a vast trading area stretching from Cairo in Egypt to Cape Town in South Africa.

moWoza wants to be the m-commerce brand that people will turn to. It is chasing customer markets that include African economic migrants, small and medium-sized enterprises doing cross border trade, and the 30 million African economic migrants who are supporting family back in their home countries.

Founder Suzana Moreira says the company carried out extensive research in South Africa, Mozambique, Lesotho, Zimbabwe and Kenya before launching its first trial runs between South Africa and Mozambique. “We ran several pilots to determine the most efficient way to provide access to packages for the beneficiaries and developed the necessary technology to enable our customers (migrants) to place orders simply. We are now operating between Johannesburg and Maputo,” she said.

Officially incorporated in 2009, moWoza did not get up and running until 2010.

Once a customer has experienced a delivery from moWoza, they are introduced to other services like banking or how to download information from the Internet. Many customers are only just learning about the resources available online.

“We look forward to the opening up of cross border trade as our findings suggest that the liberalization and facilitation of the cross-border trade initiative will increase demand for all products and services from South Africa to neighbouring countries,” Moreira said. “South Africa offers an extensive range of products compared to the choice of products that are offered in many of the neighbouring countries.

“The structures and networks that compel migrants to come to South Africa are well established,” she explained.

“The social networks encourage the movement of labour. Hundreds of thousands of male migrants from the Southern African Develoment Community, SADC (http://www.sadc.int/), countries have spent the greater parts of their working lives in South Africa. They in turn had parents or grandparents who had worked in South Africa, while providing a lifeline to the family in the home country.

“This practice will continue: mobile money to a degree will facilitate this lifeline but as long as products can be sourced cheaper in South Africa, the demand for South African products will continue.”

The people behind moWoza sound like business radicals, proclaiming that traditional ‘bricks and mortar’ businesses will be replaced in a shopping revolution by WAP (wireless application protocol) and SMS (short message service) business platforms operating on mobile phones.

Apart from developing the m-commerce business, moWoza aspires to become a well-known brand for the migrant community.

“Becoming a lifestyle brand is a bold statement on our part,” Moreira said. “However, this goal reflects a measure of success and would demonstrate that we are delivering value to our customers (migrants and micro-merchants) and their beneficiaries.”

The moWoza brand hopes to reflect the lives of their customers and be all about embracing fluidity and mobility.

“As our primary customers are transnational and highly mobile (immigrants with a dual existence), we would like moWoza to represent mobility and fluidity (attune to anytime, anywhere, always).” she said. “Their greatest aspiration is an improved livelihood and a simplification of the rigours of grass-roots existence.”

moWoza foresees big changes coming for the economies of the African countries affected by the opening up of regional trade. According to its website: “New markets and trading routes will mushroom, traditional value chains will be replaced with ICT [information and communications technology] innovations; a savvier and younger consumer will emerge who will value convenience and simplicity.”

For users, moWoza’s service works like this: A customer uses a mobile phone to make a purchase. An agent helps with selecting the right package and delivery options. When the payment is made, an SMS mobile receipt – a so-called m-receipt – is sent to the customer. The person who will be receiving the parcel will also receive a text message. During the delivery process, ‘m-updates’ are sent on progress to both parties and when the parcel is finally delivered, a final notification is sent of delivery.

Special drop-off points have been set up in countries where the service is available and there is follow-up contact with the customer to determine their continuing needs.

MoWoza hires people from the communities they operate in as agents. An agent works with the customer to show how the Internet works on mobile phones and to improve their literacy skills.

Product parcels are selected to meet the World Health Organization (WHO) nutritional guidelines. The packages are selected based on focus groups and customer feedback.

With offices in South Africa and the United Kingdom, moWoza is looking forward to expanding what it can offer.

“We will continue to innovate, and deliver services that improve the livelihoods of our target market and their beneficiaries,” Moreira said. “We will extend our packages to include seeds and other agricultural products, school and educational materials, and health products. As we grow, our services will extend to digital (virtual) goods, e.g. insurance products specifically targeting the underserved communities.”

By David South, Development Challenges, South-South Solutions

Published: August 2012

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=CQHG3jRMm4UC&dq=development+challenges+august+2012&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsaugust2012issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Anti-bribery Website in India Inspires Others

Wednesday, June 24, 2015 at 1:22PM

An Indian website tackling corruption has been so successful it has inspired a wave of followers in China.

The I Paid a Bribe website – motto: “Uncover the Market Price of Corruption” – was set up by the Janaagraha Centre for Citizenship and Democracy (http://www.janaagraha.org), a non-profit organisation based in Bangalore, India.

Janaagraha is dedicated to working with government and citizens to “improve the quality of life in Indian cities and towns,” according to its website.

Janaagraha’s initiatives strive “to make government departments transparent and accountable,” and the ipaidabribe programme (http://www.ipaidabribe.com) fits in with that goal. It seeks to harness the collective voices of the citizens to report and quantify incidents of corruption. The website will help to paint a picture of the level of corruption in cities and help the NGO in its fight to improve government oversight systems and procedures and to improve law enforcement and adherence to regulations.

The website tackles the “pernicious effect of corruption on destroying city life and disempowering citizens,” according to Raghunandan Thoniparambil, the site’s programme coordinator. “The original idea was that the website could become a simple means of tracking the market price of corruption – a kind of price prediction mechanism.”

He said the original idea was tongue in cheek and propelled by cynicism – but the site’s creators soon realized that “such an effort was indeed a very powerful one.”

The website displays reports and analytics on bribe patterns by city and by transaction amounts, frequency and averages.

The long-term goal is to reduce corruption faced by Indians when they use government services. The website asks users to log both recent and past incidences of bribery. It says: “Please tell us if you resisted a demand for a bribe, or did not have to pay a bribe, because of a new procedure or an honest official who helped you. We do not ask for your name or phone details, so feel free to report on the formats provided.”

Neither accusers nor accused are identified by name – only the incidents are logged. The website is funded by a grant of US $3 million and the NGO is planning to launch a mobile phone application as well.

The website doesn’t pursue individuals because it has found this approach is a distraction to getting systemic improvements by government.

“By not allowing names to be published, we have eliminated any incentive for any individual to make a false or malicious complaint,” said Thoniparambil. “Since nobody will gain anything by reporting a false complaint on our site because we do not act on complaints, we expect that the stories on the site are true.”

The site has been so popular it has spawned imitators in China and elsewhere. Thoniparambil said Janaagraha has been approached by civil society organisations in 13 countries about collaborating.

After a story was published in the Beijing News about I Paid a Bribe, a flurry of ‘tips’ and accusations flooded the Internet in China, and people set up similar websites to gather information on bribery and corruption in their country. One web developer called “Peater Q” set up a Chinese version of I Paid a Bribe, calling it wohuilule.com. Another two websites that popped up included “I Bribe…” (http://www.wxhwz.com) and http://www.tmzg.org. Some of the dozens of websites have been taken down, but others have received official support and encouragement.

“Peater Q” says he is a young Communist Party member and has received government permission for his site. He says the name of his site, wohuilule.com, is a Chinese translation of “I paid a bribe.”

These are still early days as these websites work out how to balance the need to ferret out corruption and bribery and the need to avoid gossip, rumour and slander. It is clear the damage done to a country when corruption and bribery get out of control is significant.

The United Nations’ Global Compact on anti-corruption calls it “one of the world’s greatest challenges.”

A report by the Carnegie Endowment for International Peace on Chinese corruption (http://carnegieendowment.org/2007/10/09/corruption-threatens-china-s-future/g4) found it threatens the country’s future by increasing socioeconomic inequality and social unrest. The report found 10 percent of government spending, contracts, and transactions goes to kickbacks and bribes, or is simply stolen. It also found the indirect costs of corruption to include efficiency losses, waste and damage to the environment, public health, education, credibility and morale.

“Corruption both undermines social stability (sparking tens of thousands of protests each year), and contributes to China’s environmental degradation, deterioration of social services, and the rising cost of health care, housing, and education,” the report said.

I Paid a Bribe is being used to build up an intelligent picture of corruption and bribery in India so that real change can be made.

“Citizens’ reports on the nature, number, pattern, types, locations and frequency of actual corrupt acts and values of bribes will add up to a valuable knowledge bank that will contribute to a reduction in bribe payments,” Thoniparambil said.

Not only does the website raise awareness about the problem and its dynamics, it maps out the path corruption takes through a public service. This, the website hopes, will enable better “more consistent standards of law enforcement and better vigilance and regulation.”

“We believe that every citizen who reports a story on our website about paying a bribe is angry enough to begin to resist it,” explains Thoniparambil.

“Except for using the data that we receive for further analysis, we will not take the complaints and stories forward. We do not intend to invoke the courts.”

But these websites need to be run with caution and care and they do have their critics.

“If you wanted to tarnish the reputation of the government or a department within it, or settle a vendetta, you could just get all of your friends to post claims against them,” Raymond Fisman, a professor at Columbia Business School who has studied corruption, told the BBC.

“There is no way of credibly aggregating the information to assess the magnitude of the problem,” he added.

Thoniparambil, however, remains positive that corruption and bribery are problems that can be tackled.

“I believe that corruption has grown this big only because as citizens, we have tolerated it,” he explains. “If we actively oppose it and there are enough of us, the government has to buckle down and tackle the problem effectively.

“Corruption may be rampant in India, but it is not endemic,” believes Thoniparambil. “Blaming it on our value systems is a poor alibi with no substance in it. I do not believe that Indians are inherently corrupt; our value systems are as good or as bad as anybody else’s. Corruption is not a social trend that arises out of an erosion of value systems; it is born out of systems failure. Corruption flourishes because we have poorly designed governance systems in the country.”

Thoniparambil sites a number of Indian successes to back up his optimism: competition in telephone service providers has reduced corruption; booking of railway tickets online has taken the power away from corrupt ticket sellers; and government departments have been forced to state how long services will take to complete.

Thoniparambil believes it is about changing the relationship between citizens and the public services they receive.

“We would like citizens to begin to realize that public services are our entitlements,” he says. “These are not favours dispensed from above. They ought not to be pessimistic about corruption. Countries have cleaned up very dramatically and the processes by which it has been done have been documented.

“Reduction of bribery in India will improve access to government services, particularly for the poor, reduce the cost of delivery of such services, speed up business and recourse to legal remedies. It will improve the quality of infrastructure and will be deeply empowering for Indian citizens.”

“It is only the collective energy of people that can turn the tables on the corrupt.”