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Texting For Cheaper Marketplace Food With SokoText

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

An international group of graduate-social entrepreneurs from the London School of Economics (LSE) is pioneering a way to reduce food prices in Kenya using mobile phones.

Answering a call to action to address global food insecurity by the Hult Prize (hultprize.org), the team members looked at how they could make food cheaper for urban slum dwellers.

The Hult Prize, funded by Swedish educational entrepreneur and billionaire, Bertil Hult, is a start-up accelerator for budding young social entrepreneurs emerging from the world’s universities. The winner receives US $1 million and mentorship to make their idea become real.

SokoText (sokotext.com) (soko means market in Swahili) uses SMS (short message service) messages from mobile phones to empower vegetable sellers and kiosk owners in slums when it comes to bargaining the price for wholesale fresh produce. SokoText makes it possible for them to benefit from bulk prices by pooling their orders together every day. Usually vendors lack the funds to buy in bulk and have to make numerous time-consuming trips to the centre of Nairobi to buy stock.

SokoText reduces the price of fresh produce by 20 per cent for kiosk owners by buying the produce earlier in the supply chain. SokoText then delivers the food to a wholesale outlet at the entrance to the slum.

This approach makes available a wider range of produce and reduces the price. And best of all, it will knock down prices for the poorest people and enable them to buy more food and better quality food.

The team behind SokoText come from a variety of countries – Colombia, Canada, Kenya, Britain and Germany.

Hatched at the LSE, the enterprise prototyped its service in Mathare Valley, Nairobi, Kenya for four weeks during the summer of 2013 with 27 users and began the second phase of testing in November 2013, working with a local NGO, Community Transformers (https://www.facebook.com/pages/Community-Transformers-kenya/119937408165671).

According to SokoText, slum dwellers spend on average 60 per cent of their daily budget on food.

Mobile phones can be transformative since they are now a common communications tool, even in slums.

On the SokoText website, respected blogger and commentator on technology in Africa, Erik Hersman (http://whiteafrican.com/about/), calls it “a fantastic low-tech approach that could really scale for decreasing the inefficiencies in urban slum markets.”

SokoText’s 21-year-old co-founder and chief executive, Suraj Gudka, explained the genesis of the project to news and technology in Africa website, 140Friday.com.

“From our research, the Mama Mboga (small-scale vegetable retailers) spend between 150 and 200 Kenyan shillings (US $1.70 and US $2.3) daily, about 25 per cent of her revenue, to buy her stock, and since they do not buy in bulk they [she] get their goods at a higher price.”

Getting the market traders to cooperate is very difficult, Gudka found, because competition is fierce and trust is low. SokoText sees itself as a solution to this situation. By encouraging bulk buying by way of the SMS text service, there is no need to build trust between the traders before the produce is purchased.

“To use our service, the interested retailers would be required to send us an SMS every evening detailing what they need,” said Gudka, “and then we will source the produce and they come pick it up from us the next morning. In this way they do not have to incur the additional costs of transporting their goods and it also saves them time.”

SokoText is being incubated at the Nailab (nailab.co.ke) in Nairobi, a startup accelerator that offers a three to 12 month entrepreneurship program, with a focus on growing innovative technology-driven ideas.

SokoText’s summer pilot test confirmed taking the orders can work but found getting the product to the market in time was difficult.

The next step will be to set up a presence in the Mathare slum.

“We will be selling about seven to 10 different kinds of produce, and from our calculations, according to our projections for how much the Mama Mbogas buy every day, we hope to get  40-50 customers within three months,” Gudka said.

Published: December 2013

Resources

1) SokoText: The website explains further how the service works. Website: sokotext.com

2) Hult Prize: The Hult Prize Foundation is a not-for-profit organization dedicated to launching the world’s next wave of social entrepreneurs. It encourages the world’s brightest business minds to compete in teams to solve the planet’s biggest challenges with innovative ideas for sustainable start-up enterprises. Annual Hult Prize winners can make their ideas reality with the help of US $1 million in seed funding. Website: hultprize.org

3) White African: Where Africa and Technology Collide! Website: http://whiteafrican.com/about/

4) Nailab: Nailab (Nairobi Incubation Lab) is a startup accelerator that offers an entrepreneurship program focusing on growing innovative technology driven ideas. This is done through providing business advice, technical training and support, professional mentoring and coaching, giving access to market and fostering strategic partnerships as well as linking them to investors. Website: nailab.co.ke

Crowdsourcing Mobile Phones To Make The Poor Money
Dabbawallahs Use Web and Text to Make Lunch on Time
Innovative Mobile Phone Applications Storm South
Kenyan Mobile Phone Innovations
Microwork Pioneer Transforms Prospects For Poor, Vulnerable
Mobile Phones: Engineering South’s Next Generation of Entrepreneurs
Mobile Phones: New Market Tools for the Poor
Web 2.0 to the Rescue! Using Web and Text to Beat Shortages in Africa

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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SokoText co-founder Sofia Zab (left). She oversees SokoText’s marketing strategy and manages SokoText’s technology products.

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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Mobile Phones: Engineering South’s Next Generation of Entrepreneurs

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Technology is fuelling unprecedented growth in productivity in Asia, with sub-Saharan Africa languishing behind (International Labour Organization). But the growth in mobile phones could help close this gap, as home-grown entrepreneurs are stepping up to exploit this new opportunity.

Mobile phone applications are proving a boon to small businesses and entrepreneurs. They are now putting power in the hands of individuals, making it easier to invent new ways of doing things, transfer money, organise business accounts, provide services, sell things, and keep in touch and up-to-date.

Technology has been the common factor in increases in productivity around the world, and with the rapid rise in mobile phone use, especially in Africa, it looks as if this handy device augers in the next wave of innovation.

And technology and mobile phones in particular, are creating a whole new route to wealth: “The switch.. frees people from geography,” Gregory Clark, an economic historian at the University of California, Davis told The Christian Science Monitor. “Singapore can be as rich as Canada, even though Singapore has no land.”

Technology is seen to be opening a new phase in economic competition in services, embracing a wide range of fields, from banking to tourism to healthcare. And it is entrepreneurs who will be at the forefront of making this happen. The majority (59 per cent) of the world’s 2.4 billion mobile phone users live in developing countries (MIT) – making it the first telecommunications technology in history to have more users there than in the developed world. The number of African mobile phone users passed 200 million at the beginning of this year (www.ovum.com), making it the fastest growing mobile phone market. It has increased at an annual rate of 65 per cent – twice the global average (MIT Media Laboratory).

In Kenya in 2005, the government’s Economic Survey found the small business sector, which employs the majority of workers in the nation of 32 million people, created 437,900 jobs – mostly down to the boom in mobile phones. According to the Massachusetts Institute of Technology (MIT), adding an additional 10 mobile phones per 100 people boosts a typical developing country’s GDP growth by 0.6 per cent. The boost comes from the innovative use of mobile phone technology by local entrepreneurs.

At the University of Nairobi, the SMS Boot Camp (SMS is the text messaging system on mobile phones) is breeding the next generation of African technology entrepreneurs. Working in partnership with MIT, the student entrepreneurs are working on an impressive list of projects, which can be found online at eprom.mit.edu. The projects are varied, and include perfecting prototype ways to collect medical data on mobiles, accurately tracking phone user’s profiles (habits, friend networks etc.), improving communication between Kenyan hospitals and the centralised blood banks in the country, and quick ways to install applications on all of Kenya’s mobile phone SIM cards.

One graduate, Mohammed Temam Ali in Addis Ababa, is now working on a project for the Ethiopian Telecommunications Company. Another is working for Kenyan mobile phone download service, Cellulant.

Nathan Eagle, a visiting lecturer at the University of Nairobi, has been working with the students on the projects: “Phones are starting to be used as a surrogate for all sorts of technology we take for granted in the West. Credit cards, TVs, radios, computers, etc… In the small Kenyan village where I’m writing this email, I can pay for the taxi ride home with my mobile — we’re even scheduled to be getting a Wimax network (wireless internet) here next year. Talk about leapfrog…”

“I’m also advising a small group of newly graduated Rwandan hackers who are building an SMS-based payment system for electricity.”

But Eagle says the obstacles can still be huge: “Government corruption and red-tape. SMS is illegal in Ethiopia… it is pretty frustrating when you go over to teach an ‘sms bootcamp’ class.”

In India, where there are 185 million mobile phone subscribers, computer science doctoral student and founder of Ekgaon Technologies, Tapan Parikh, has founded a business specifically targeting developing mobile phone-based information systems for small businesses in the developing world. Working in rural India, the applications are designed to make it easier for business owners to manage their own operations in an efficient and transparent way, and also to build strong connections both with established financial institutions and their customers. By making it easier to access finance, and also to get a better price, these businesses will stand a better chance of flourishing, it is believed.

One of his applications is called Cam (named after the phone’s camera). It is a toolkit that makes it simple to use phones to capture images and scan documents, enter and process data, and run interactive audio and video.

Parikh is also using these applications to improve micro-finance. Targeting Indian self-help groups (15 to 20 people who pool their capital together, usually women), the application (called SHG MIS – self-help group management and information system) uses the phone’s camera to enter data, uploading it to online databases, and a package of Web-based software for managing data and reporting to the institution that lent the money.

“In these groups, things are often done in a somewhat ad hoc manner, using informal documentation,” Parikh says, “which can lead to instability and impermanence and contribute to the kinds of tensions that lead small groups to fall apart.” The software gives groups a more systematic method of documenting decisions, tracking financial performance over time, and collecting information on loan effectiveness. Parikh has developed his applications around the needs and behaviour of the users.

This next wave of entrepreneurs will be joining a growing list of made-in-the-South mobile phone innovators like ARYTY, G-Cash and Smart Money in the Philippines; WIZZITand MTN Mobile Money in South Africa; M-Pesa in Kenya; Celpay in Zambia and the Democratic Republic of Congo.

Published: September 2007

Resources

  • Key Indicators of the Labour Market, 2007: www.ilo.org
  • Commission for Africa report on mobile phones and development: www.commissionforafrica.org
  • The Massachusetts Institute of Technology and the University of Nairobi are training the next generation of mobile phone entrepreneurs with their “SMS Boot Camp”, focused on developing applications for African phone users: eprom.mit.edu.
  • Entrepreneurs can track the growth of the mobile phones market here: www.wirelessintelligence.com

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.

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Mobile Phone Shopping to Create Efficient Markets across Borders

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

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.”

Published: August 2012

Resources

1) A downloadable map showing border delays, bribes and barriers impeding cross-border trade. Website: http://www.borderlesswa.com/resources/18th-usaid-uemoa-road-governance-map

2) Borderless Alliance: Removing Trade Barriers in West Africa: Borderless is a vision for competitive trade in West Africa – of eliminating barriers to trade. Streamlining procedures, attacking corruption and facilitating the movement of people and goods will lower costs. Consequently, businesses will expand, create jobs and generate more revenue for government and more income for people. Website: http://www.borderlesswa.com/

3) Borderless Conference 2013 and 2014: Call for proposals: The Borderless Alliance Secretariat announces a call for proposals to host the 2013 annual Borderless Conference. Borderless Conference 2013 will be the second transport and trade annual conference in West Africa, and will bring together more than 300 stakeholders from around the world to discuss efficiency in logistics, using data for decision making and advocacy. Website:http://www.borderlesswa.com/news/borderless-conference-2013-2014-call-proposals

4) West Africa Trade Hub: Website:http://www.watradehub.com

5) Trade Mark East Africa: Supporting East African Integration: Through TradeMark East Africa, a cost-effective regional aid delivery mechanism has been established that can focus on building long-term East African capacity. TradeMark East Africa provides a durable platform for scaling-up of Aid For Trade to East Africa. Website: http://www.trademarkea.com/home/

6) Geneva Trade and Development Forum. Website: http://www.gtdforum.org/

7) Spaza News: The newspaper aimed at spaza shop owners seeking to connect them. Website: http://www.spazanews.co.za/

8) Africa Trade Gateway: Website: https://www.africatradegateway.com/

9) Cross Border Trade Desk: This website is a ‘resource’ to help cross border traders in Eastern and Southern Africa to find an association near to them, to voice their opinions and explain what COMESA is doing in improving conditions for small-scale cross border traders. Website: http://www.cbtcomesa.com/

10) Defragmenting Africa website including the report De-Fragmenting Africa: Deepening Regional Trade Integration in Goods and Services by the World Bank. Website: http://tinyurl.com/cta3ykf

A New Mobile Phone Aimed at the Poor
Crowdsourcing Mobile Phones To Make The Poor Money
DIY Solution Charges Mobile Phones With Batteries
Entrepreneurs Use Mobiles and IT to Tackle Indian Traffic Gridlock
Innovative Mobile Phone Applications Storm South
Kenyan Mobile Phone Innovations
Mobile Applications Market: Opportunities for South
Mobile Phones: Engineering South’s Next Generation of Entrepreneurs
Mobile Phones: New Market Tools for the Poor
Mobile Phones Bring the Next Wave of New Ideas from the South

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.

Southern Innovator Issue 1
Creative Commons License

This work is licensed under a
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ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

Categories
Archive Blogroll

Mobile Phones: New Market Tools for the Poor

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Bangladesh’s poor can now buy and sell goods and services with their mobile phones, thanks to a Bangladeshi company’s pioneering mobile phone marketplace. The company, CellBazaar, serves as a useful role model for other Southern entrepreneurs and companies looking to develop and market mobile phone applications for the poor that really help them.

CellBazaar is simple to use: A user begins the process by texting the word “buy” to short message (SMS) code 3838. They then are offered a list of all the items for sale and scroll through them to find what they want. When they have found something, they send another SMS. In response, an SMS comes back telling the seller’s phone number. And from that point, business is underway between the buyer and the seller.

“It’s a far more efficient way of finding things. In the past you have to go to newspapers, magazines, and find the best match,” founder Kamal Quadir told MobileActive.

The categories run from used cars and motorcycles, to new laptops, agricultural products like corn, chickens and fish, educational tutors, jobs, and places for sale and rent.

Quadir said he had the idea for CellBazaar when he was a graduate student at MIT, the Massachusetts Institute of Technology in the United States.

“I was surrounded by technologically sophisticated people,” he said. “I saw all this technological possibility and heard one top-notch scientist mentioning that a very cheap mobile phone had the same capabilities as a NASA computer in 1968. A country like Bangladesh has 35 million NASA-type computers, and most importantly, they’re in people’s pockets.”

Quadir saw all this power going to waste, and realized how business was being held back by the lack of information. Absence of market intelligence – or what is available for sale and what is a good price – was a big impediment to more profitable and efficient business transactions.

Quadir first created the idea at MIT Media Labs and eventually signed a contract with GrameenPhone. CellBazaar launched in July of 2006, and, after a year of beta testing, the team started to actively market the service in August 2007.

CellBazaar can also be accessed through its website. This has the advantage of making what is a very local market an international market.

Partnering with Grameen Phone, Bangladesh’s leading telecommunications service provider with more than 18 million subscribers, had its advantages. With 60 percent of the Bangladesh market, “their network is larger than others,” Quadir said.

Just as web applications like Google and the powerful social networking website Facebook (www.facebook.com) transformed the way people work and socialize, so CellBazaar has needed to encourage a change in behaviour for it to work. At first, people didn’t think they had anything worth selling, or that they could use the text messages to connect to a marketplace.

“In the past, a rural village person couldn’t even imagine that they wanted to sell something and the whole world would be willing to buy it,” Quadir said. “The biggest challenge we have is people blocking that audacity and courage.”

To date, over 1 million people have used the service out of a country of 150 million people. “Fundamentally the real issue is about changing people’s patterns,” he said. “But once they learn how to use it, people start doing it really frequently.”

The CellBazaar experience also shows how critical clever marketing is to business success. The company has been marketed through tastefully designed stickers placed in the windows of cars, taxis and microbuses — ubiquitous and continuous publicity for low cost.

CellBazaar also has launched educational booklets for four target audiences: villagers and farmers, the elderly and retired, young professionals, and tech-savvy teenagers. There are detailed booklets for those who want step-by-step instructions, as well as short leaflets for customers who want to carry a “quick guide” in their pocket.

CellBazaar launched its first television campaign during the Muslim festival of Eid in 2007. The ads featured a newspaper seller called Shamsu Hawker, and show how he begins a new career buying and selling used televisions with the help of CellBazaar. The advertisement’s unusual setting on a train, as well as positive imagery of Bangladesh, created a sensation among TV viewers. The character “Shamsu Hawker” has become a nationally recognized icon and popular cultural figure.

As the service grows, the demographic that uses it has also expanded. “Young people were the early adopters,” said Quadir. “Initially urban people used it more, because we didn’t market very aggressively. Word of mouth spread faster because of the higher concentration of people in cities. But now it has spread to rural areas as well.”

CellBazaar has won many awards for its innovation in social and economic development.

The ambitious Quadir wants to expand CellBazaar into East Africa, Eastern Europe, and South Asia. Unlike the web, CellBazaar has to make deals with local mobile phone providers. He can’t just offer the service through the internet. “The Internet belongs to everybody — like highways and like fresh air,” said Quadir. “Mobile networks are privately owned.”

“So far the operators we have worked with have been very good,” he said. “We are very selective in terms of what operator we work with.” As CellBazaar looks to expand, Quadir is focusing efforts on places that have high mobile penetration rates and low web penetration. “We’re looking at any place that has less internet. No matter how good the application is, having internet and high computer penetration doesn’t help us,” he said. “And mobile is everywhere.”

The same lesson is being learned around the world. A study of grain traders in Niger found that “cell phones reduce grain price dispersion across markets by a minimum of 6.4 percent and reduce intra-annual price variation by 10 percent.” According to the study, “The primary mechanism by which cell phones affect market-level outcomes appears to be a reduction in search costs, as grain traders operating in markets with cell phone coverage search over a greater number of markets and sell in more markets.”

Mobile phones are now the fastest growing consumer product in history. Portio Research estimates that between 2007 and 2012 the number of mobile subscribers will grow by another 1.8 billion, mostly in emerging economies like India and China.

Informa Telecoms and Media estimates mobile networks now cover 90 per cent of the world’s population – 40 per cent of whom are covered but not connected. With such reach, finding new applications for mobile phones that are relevant to the world’s poor and to developing countries is a huge growth area. It is estimated that by 2015, the global mobile phone content market could be worth over US $1 trillion, and basic voice phone calls will account for just 10 per cent of how people use mobile phones.

Leonard Waverman of the London Business School has estimated that an extra 10 mobile phones per 100 people in a typical developing country, leads to an extra half a percentage point of growth in GDP per person.

The experience in the Philippines has shown that the best way to drive fast take up of mobile phone services is to offer something very practical and connected to personal income.

“The most significant lesson learned so far,” said Shawn Mendes, lead author on the report, The Innovative Use of Mobile Applications in the Philippines: Lessons for Africa, “is that m-Banking, rather than more altruistic applications such as m-Health and m-Education, has delivered the greatest benefits to people in developing countries.”

Published: October 2008

Resources

  • SME Toolkit: A free online resource aimed at the South to help entrepreneurs and small businesses access business information, tools, and training services to be able to implement sustainable business practices. Website:http://www.smetoolkit.org/smetoolkit/en
  • Entrepreneurial Programming and Research on Mobiles: EPROM, part of the Program for Developmental Entrepreneurship within the MIT Design Laboratory, aims to foster mobile phone-related research and entrepreneurship. Key activities include development of new applications for mobile phone users worldwide. Website: http://eprom.mit.edu/
  • Textually.org: a very inspiring website profiling loads of innovations with mobile phones in the developing world. 
    Website:http://www.textually.org/textually/archives/cat_mobile_phone_projects_thir
  • The innovative use of mobile applications in the Philippines Lessons for Africa: A paper from the Swedish International Development Cooperation Agency (Sida) on mobile phone innovation. Website:http://www.sida.se/sida/jsp/sida.jsp?d=118&a=33306&language=en
Crowdsourcing Mobile Phones To Make The Poor Money
DIY Solution Charges Mobile Phones With Batteries
Entrepreneurs Use Mobiles and IT to Tackle Indian Traffic Gridlock
Indian Mobile Phone Application Innovators Empower Citizens
Innovative Mobile Phone Applications Storm South
Kenya Reaches Mobile Phone Banking Landmark
Kenyan Mobile Phone Innovations
Mobile Applications Market: Opportunities for South
Mobile Phone Microscopes to Revolutionize Health Diagnostics
Mobile Phone Peacekeeping
Mobile Phone Shopping to Create Efficient Markets across Borders
Mobile Phones Bring the Next Wave of New Ideas from the South
Mobile Phones: Engineering South’s Next Generation of Entrepreneurs
A New Mobile Phone Aimed at the Poor
Ring Tones and Mobile Phone Downloads are Generating Income for Local Musicians in Africa

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.

Southern Innovator Issue 1
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