Getting In on the Emerging Markets Smartphone Boom

And what it means for Entrepreneurs

I work in Technology, focusing on Emerging Markets at Google. All views expressed here are strictly my own — formed through travel, work, observation, and many ongoing conversations with experts on the ground. All feedback is welcome.


Emerging Markets and the Mobile Phone Frontier

Whether your mobile interests lie in hardware, user behavior, habits, trends — or sheer numbers — the advent of the smartphone has significant implications.

The smartphone boom today encompasses sophisticated mobile users and scalable products being pioneered out of India, Russia, Southeast Asia, China, and across the supposed long tail of ‘developing’ countries in Africa, Latin America and the Middle East.

Powered by the surge of ‘Chinadroid’ devices coming out of Shenzhen, increasingly cheaper licensed devices being run on platforms like Android and Firefox, and the concurrent expansion of manufacturers across Asia (Huawei, Samsung, Karbon, Micromax) — suddenly, almost anyone can get their hands on an affordable smartphone.

Entrepreneurs and the Importance of Going Mobile

Bottom line: Expect more users with smartphones all over the world. Some thoughts for Entrepreneurs below.

  1. Go Mobile first if you can. Bet ahead on Mobile Apps — for the growing number of users this is overtaking Desktop browsing.

Mobile internet usage worldwide now surpasses desktop browsing, and many users in developing countries will only ever access the internet through a mobile device or tablet. With this, the rules of sales, transacting and distribution will change for many businesses.

Entrepreneurs can look beyond basic feature phones, as 2013 was the first year annual global sales of smartphones exceeded those of feature phones. Nearly one billion smartphones were shipped in 2013, and smartphone users at the end of 2014 comprised 30% of all mobile users. The total global mobile user base is 5.2 billion devices — so the upside is huge, and mobile apps are now > mobile web.

Selfies in Bangkok (photo credit: Tamara Sanderson)

2. In most emerging markets, any online product in from social messaging, audio, games, video to banking services is likely a good sell for mobile.

The new wave of communication, don’t get left behind (photo credit: Tamara Anderson)
Staying Mobile in Hanoi (photo credit: Devika Daga)

Think about it: your Great Aunt in Jakarta isn’t going to be checking out Zomato reviews on her vintage fuchsia Moto Razr.

Drivers in Nairobi aren’t figuring out routing on Google Maps via a piece of plastic with 8 buttons and a digital strip. And tweens in Manila aren’t going to be breathlessly gaping at YouTube Vloggers from Brighton without a shiny, touchable, LCD backed screen. Also, can anyone imagine a serious conversation on KakaoTalk without Stickers?

Mobile-first companies have been able to scale quickly, online e-commerce startup SnapDeal gets a whopping 60% of their $400 million gross sales on mobile. The growth has been exponential, and is setting the trend for competitors in the Indian market.
Another banner name mobile-heavy startup — Zomato, has been scaling out from major Indian cities into Brazil (Sao Paulo), Turkey (Istanbul, Ankara), and Indonesia (Jakarta), and beyond. Mobile is the primary platform for the startup and is still growing quickly. Their plan for the next two years? Moving entirely off the website and onto mobile only.
Mobile Banking in Nairobi (photo credit: Devika Daga)
The African mobile experience has been ongoing for far longer in the banking space (two-thirds of adult Kenyans transact via M-Pesa). Given the sophistication in cashless payments, Bitcoin usage has been on the upswing too, and crypto-currency may be a source of future business growth and a potentially central means of transacting — particularly between countries in the region where exchange rates are often unpredictable.

3. Aim for Breadth when it comes to Operating System

Source: IDC Market Data, 2013

Build Apps keeping in mind that OS matters.

Across developing countries Android is easily the leading operating system. The platform accounted for 78% of the nearly one billion smartphones shipped in 2013.

Despite the coming rush of entrants like Mozilla’s new India foray, the $33 Firefox-based smartphone, the launch of Android One, the low-cost (~$100) Android phone this month is likely to continue to perpetuate this trend. Google’s announced plans for launch: only Emerging Markets (India, Indonesia, the Philippines, Bangladesh, Nepal, Pakistan and Sri Lanka).

4. Target multiple Marketplaces

Android Apps can be downloaded from more than just the old Play Store. Do get on more than one App store.

Globally, users and developers can go with a range of options — from the banner name Baidu Market and Samsung’s new Apps Platform; to mid-tier players such as GetJar and SlideMe. China alone has a host of players. Risks with smaller platforms involve piracy, fraud and security breaches.

5. Location-based is working

GPS is pre-loaded into more and more phones and people are making use of it. The explosive use of Tinder during the 2014 World Cup in Brazil is a recent illustration. The mobile dating app reported a pretty impressive 50% uptick in downloads and usage in Brazil during the games.

Religiously taking selfies (photo credit: Alexandra de Sá Moreira)

In India, E-commerce startups like Findable are using GPS services to hack the logistical issues of purchase and delivery in a country where street addresses are notoriously confusing. And Zomato, which provides all food and restaurant recommendations based on location, has over 60 million users.

Changes in the transportation industry are even more transformational, companies like Uber, Lyft, TaxiForSure, and Olacabs are already changing how people get around in many major cities the emerging world.

6. Keep it simple

Expect everyone to be on Line and super-adept at sticker-driven-chats, even your cab driver in Bali (photo credit: Tamara Sanderson)

Design and UX still count with users (bonus tidbit: people love Stickers).

But keep it clean. In the design world, simplicity in interface and graphics always trumps more complex layered multitudes of colors and design. Think the iconic Facebook blue and white.

The same counts for UX.

Kunal Bahl, the CEO of e-commerce site Snapdeal overcame mobile connectivity issues in India (and customer frustration in dealing with delays and dropped connections) by shortening the buying process down to three clicks on the phone — as a result mobile sales on the platform shot up from 5% to 60% over a 14 month period.

7. Account for connectivity challenges

Allow for offline content — internet connections can be spotty and expensive. And think about design modifications like Snapdeal’s (above) to minimize user fatigue around low quality connectivity.

At the same time, avoid being overly worried about people not being able to connect to the internet entirely. Yes, connectivity can be limited, but users get creative: think finding free WiFi hotspots to ‘catch’ the internet; data zero-rating packages for app bundles; and the overall prospect of declining prices with growing demand and innovative Tech-driven solutions from Google and organizations like the Gates Foundation.

8. Payments are tricky

There is no prevailing mobile-based solution. Some leaders are Card.io and Braintree, which are used in India and Southeast Asia for seamless Mobile-based payments by Uber’s, while Airbnb uses the Concur platform.

Africa continues to be a leader in solutions as well as business opportunities for mobile payments — with options for online payments and e-commerce like PesaPal built on the M-Pesa platform. Be careful with other markets, as regulations and lack of user behaviour may slow you down and prove to be an unexpected hindrance.

9. Localize for language and demographics

Having the right language can be an unexpected competitive advantage — it can help get your product ahead in markets which have a dearth of localized content and apps.

Security guard in New Delhi (photo creditL Rishab Malik)

The United Arab Emirates (74%), South Korea (73%), Saudi Arabia (73%) have the highest levels of smartphone penetration in the world, and none of them counts English as the primary spoken language. If you don’t have translated content, focus on countries which are more English-accepting such as India and Malaysia.

Additionally, remember that smartphone users will usually skew younger in these countries, so build Apps with demographics in mind. According to a 2014 Pew Global study, 69% of 18- 29 year-olds in China have a smartphone, as do half or more in Lebanon (62%), Chile (55%), Jordan (53%) and Argentina (50%).

10. Keep in mind that user experience will be variable based on the phone, layer in features accordingly and build your product for the target users— don’t worry about the ‘latest model’

Make your UX and design simple so less stuff will break. For the more ‘obviously fake’ phones, icons are too big, fonts do not fit, the UX experience is worse, and GPS is not prevalent. Also, don’t count on videos if you don’t need them; it can slow down the experience with poor devices

Remember that you can’t keep up with the phone models, for every ‘real’ model, there are ~10 different whitelabel devices. New model turnaround times are an incredible one to three months from launch to sale; with lots of room for customization. So focus on your target userbase.


Mini-guide to the Shenzhen Chinadroid Market: Smartphones for Everyone
A recent glance into Shenzhen in China solidified the source of this shift to the Smartphone and drove home some of the implications. My quick walk-through to the most important massive electronics shopping district in the world (linked here).
The Chinadroid Market in Shenzhen, in China’s southern Guangdong Province, churns out millions of smartphones of all prices for global distribution every year. In 2013 alone, an estimated 400 million devices were shipped out from China to the rest of the world, with the vast majority produced and sold from Shenzhen.
Show your support

Clapping shows how much you appreciated Suhair Khan’s story.