Mobile Phone Shopping to Create Efficient Markets across Borders

 

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.  

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Egyptian Youth Turns Plastic Waste into Fuel

The challenge of finding alternate fuel sources is capturing the imagination of innovators across the global South. As the world’s population increases – it recently reached 7 billion (UN) – and the number of people seeking a better life grows in turn, the energy demands on the planet are pushing up competition for existing conventional fuel sources.

The modern lifestyle that many aspire to requires energy, whether it’s using electronic products which consume large quantities of electricity, driving personal vehicles or living in homes that are artificially heated and cooled.

This energy hunger has opened up a whole new market demand that needs to be met. The scale of this market is enormous, but the solutions are ultimately limited only by people’s imaginations. An award-winning Egyptian teenage scientist is capturing attention for the imaginative solution of turning waste plastic into biofuel, sparking interest in the creation of a whole new source of wealth for her country.

Sixteen-year-old Azza Abdel Hamid Faiad (http://tinyurl.com/dysemjg) has found a new way to take waste plastic and break it down into fuel. She has discovered aluminosilicate minerals (http://en.wikipedia.org/wiki/Aluminosilicate) – which contain aluminium, silicon and oxygen and are found in clays – can break down the polymers that make up plastic (http://en.wikipedia.org/wiki/Polymer) to produce the gases methane, propane and ethane, all of which can be turned into ethanol (http://en.wikipedia.org/wiki/Ethanol), which is useful as a biofuel.

According to Inhabitat (inhabitat.com), a website dedicated to “green design, innovation, and the future of clean technology,” her solution could turn the country’s annual consumption of 1 million tonnes of plastic into a year’s supply of biofuel worth US $78 million.

Clever innovators are sitting on a goldmine if they can come up with renewable energy solutions. The U.S. Army alone is looking to spend US $7 billion on renewable energy sources and is accepting bids from the private sector to meet its needs (http://www.forbes.com/sites/toddwoody/2012/08/08/u-s-army-opens-bids-to-buy-7-billionin-renewable-energy/). The army is looking to sign contracts stretching up to 30 years for buying electricity generated by solar, wind, geothermal and biomass projects.

The options are numerous for renewable energy – from solar power to wind power to algae as a source of biofuels (http://en.wikipedia.org/wiki/Biofuel). The challenge is to find a fuel source that is plentiful, renewable, and crucially, doesn’t harm other needs.

Using biofuel as a replacement for conventional petroleum-based fuels like gasoline and diesel appears to be an attractive solution, but it can lead to other problems. Some people are using used cooking oils to convert into biodiesels, but sometimes there is not enough used cooking oil to meet demand. In short, a constant supply source is required to meet ever-increasing energy demand.

A famous example of where the use of renewable plant-based fuel sources can go wrong is the case of corn. The widespread use of corn as a source for biofuels – rather than for animal feed or human food – has led to accusations this is contributing to the global food crisis. The current drought in the United States is damaging corn crops and only making this problem more acute. The U.S. is the world’s largest producer of corn (US Department of Agriculture) and much of it is used as livestock feed around the world.

Faiad’s solution is appealing because the fuel does not come from biomass – derived from plant matter – but turns waste plastic into the raw material for biofuel.

Plastic waste is a common byproduct of modern life. Plastic is used extensively in packaging, bottles, bags and electronic products. It fills up landfill sites and is a blight on the landscape in many countries. It is also a product made from petrochemicals (http://en.wikipedia.org/wiki/Plastic), the very source of conventional fuel used by most of the world’s vehicles.

Breaking down waste plastic from bottles, packaging and other products into what is called ‘biofuel feedstock’ – the substance necessary to start the creation of biofuel – requires a means to turn the plastic into fuel.

According to Green Prophet (greenprophet.com), Faiad believes her technological breakthrough “can provide an economically efficient method for production of hydrocarbon fuel namely: cracked naphtha (http://en.wikipedia.org/wiki/Petroleum_naphtha) of about 40,000 tons per year and hydrocarbon gases of about 138,000 tons per year equivalent to US $78 million.”

This could be a big economic boost to Egypt’s economy, simultaneously reducing dependence on petroleum-based fuels and creating a new source of income. Egypt’s economy has been hit hard since the start of the Arab Spring (http://en.wikipedia.org/wiki/Arab_Spring). The number of tourists fell 33 per cent in 2011 and revenue dropped by US $3.7 billion from 2010 (Egyptian Tourism Minister). In 2009 about 12.5 million tourists visited Egypt, bringing revenue of US $10.8 billion. The tourism sector is one of the country’s top sources of foreign revenue, accounting for more than 11 per cent of GDP, and offers jobs in a country beset by high unemployment – for Egypt, tourism makes up 11 per cent of its GDP (gross domestic product) (Reuters).

Faiad’s innovation has not gone unnoticed. She received the European Fusion Development Agreement award (http://www.efda.org/) at the 2011 23rd European Union Contest for Young Scientists (http://ec.europa.eu/research/youngscientists/index_en.cfm). She is also receiving interest from the Egyptian Petroleum Research Institute (http://www.epri.sci.eg/), according to Inhabitat.

Ambitious Faiad is also seeking to take ownership of her innovation by getting a patent from the Egyptian Patent Office (http://www.egypo.gov.eg/english/default.htm).

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

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Teenager Uses Technology to Protect Livestock from Lions

In Kenya, a teenage Maasai (http://en.wikipedia.org/wiki/Maasai_people) inventor has developed a way to chase lions away from livestock that doesn’t harm the lions. It is a common practice to kill lions when they threaten or kill livestock, and this has led to a precipitous drop in the local lion population at Nairobi National Park (http://www.kws.org/parks/parks_reserves/NANP.html/), near the country’s capital, Nairobi. Lions are a significant tourist attraction for Kenya and the population decline is a threat to the future of the tourist industry.

Trying to find the right balance between livestock and wild animals is a problem across the global South. As populations rise, and the number of animals kept for domestic food markets increases, so does conflict between farmers and predatory wild animals looking for an easy meal. And there is no more tempting easy meal than domesticated animals tamed and kept in herds.

According to Reuters, 13-year-old Richard Turere has developed a system of flashing lights to scare off lions at night. The LED (light-emitting diode) (http://en.wikipedia.org/wiki/Light-emitting_diode) bulbs were gathered from broken flashlights. Turere then wired them to a solar-powered car battery used to power the family’s TV.

Turere has placed the lights on poles surrounding the enclosure where the cattle stay at night.

“Lions were eating our cattle at night, which made me very annoyed,” he told Reuters. “And I thought that I have to come up with an idea of making bulbs. Because I knew that the lions were afraid of something moving.

“When someone wakes up at night and moves with a torch, they are afraid. So I made the bulbs which flash at night and keep away lions.”

Nairobi National Park is wild and unfenced, leaving lions free to wander on to farmland. Tragically for the lions, increasing numbers are being killed by farmers protecting herds. Conservationists say Kenya’s lion population has plummeted from 15,000 to just 2,000 in a decade. Since October 2011, Wildlife Direct (http://wildlifedirect.org/) has documented 169 killings of livestock by lions in the location near Turere’s farm.

Kenya depends heavily on tourism to the national parks where people want to see lions. Kenya has been enjoying significant growth in tourism and has the goal of reaching 2 million international tourists in 2012 (Kenyan Ministry of Tourism). Earnings from international tourism are the second largest source of foreign exchange for the country and the services sector – 63 per cent of GDP (gross domestic product) – is dominated by tourism (Brand Kenya). So-called ‘photo safaris’ to the country’s national parks and game preserves are the main attraction for international tourists.

But farmers need to have their herds protected since livestock are a critical income source for them, as well as a food source for the country. Cattle herding has long been an important income source and livelihood for the Maasai people.

According to conservationist Dr. Paula Kahumbu, executive director of Wildlife Direct, other herding families would like Richard to set up the light system on their farms too.

Since Richard installed the lights, his family has not lost any cattle to lions. This bright idea has also dramatically altered Turere’s life. The attention he has received for the invention has led to him being funded by local environment groups to attend a prestigious private school, Brookhouse International School (http://www.brookhouse.ac.ke/) in Nairobi. Things are truly looking bright for Turere!

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

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