Mobile operators need to build online marketplaces

There are two main problems facing anyone who wants to conduct business online,  namely: Payments and Distribution.

The payment problem

When one needs to make online transactions, they must to have a MasterCard/Visa card or PayPal, or any other method of online payment.  None of these are easy to come by for the majority of internet users (be it mobile or PC).  Most content publishers also have no way to receive payments for their content.

The distribution problem

We lack sufficient means of delivering services to users, e.g. music downloads. Potential customers resort to piracy because they cannot buy the songs they want conveniently. Same applies for apps, e-books and games.  Content publishers have nowhere to sell their content.

This is where an online marketplace would come handy.

The marketplace

A marketplace is an online store which sells virtual and physical goods, ranging from apps, music files, videos, ringtones, and games amongst other things. Content/goods are provided by third parties but the marketplace is run and controlled by the operator. Well known examples are iTunes, Play Store, Amazon.com and the less known Korea’s SK T-Store.

T-Store is a perfect example of how an operator run marketplace can be a major success. Having spent about a year in South Korea where I got the opportunity to use such a service, I thought I could use the SK Telecom’s T-Store as an example of a successful implementation of a marketplace by a mobile operator.

It is owned by South Korean Telecoms operator SK Telecom, it was launched in 2009 and has already had 7 million users, 24,000 partners and 220 million app downloads since September 2009. It is an online marketplace for smartphone applications,  music, comics, ebooks, movies and other virtual content.
Other online businesses that SK Telecom operates are MintMarket – a mobile marketplace for second hand items in mint condition, and 11th Street – an online auction and shopping site.

The technology sector is a place where only those continually seeking change and innovation can survive and thrive. MNOs need to find new ways to expand their businesses beyond the current paradigms, find new ways to generate revenue and explore new areas where they can succeed.

Given the aforementioned obstacles (payments and distribution), the MNOs would be best suited to deliver a successful online marketplace; they can overcome the logistical problems required in setting up such a marketplace. They already have efficient payment methods; transactions would rely mainly on carrier billing.

Since most of mobile users don’t have bank accounts, but can easily get access to airtime. My airtime wallet (E-wallet/ EcoCash / whatever they want to call it) could be linked to the hypothetical E-Store (Econet Store).

I’m using Econet as the archtype in my hypothesis, mainly because it has the majority of the local subscriber base and Econet is on the right path with EcoCash, it has the potential to morph into something much bigger than its current form; it could be the spark that ignites Zimbabwean eCommerce and help transform our economy.

On this E-Store I would be able to buy the latest Winky-D or Macheso song or buy a local ebook using my E-wallet. Econet owns the traffic that travels on their network, they would then be able to subsidize downloads of content bought on their Store.

Implementation of an online marketplace could help rejuvenate certain industries in the country such as the music industry which now generates revenue mainly through live performance as opposed to sales. Zimbabwean apps could easily be uploaded to the store and developers could circumvent the tiresome requirements of Google Play Store and Amazon App store. Book publishers could sell their books in a convenient way in one place.

Econet is best suited to lead the way mainly because it has the right telecommunications in place to implement the service. It has a large subscriber base, a payment solution already in place in the form of EcoCash, and the company would definitely be able to get adequate funding and expertise required to undertake such a project.

Other MNO’s could definitely get in on the action, they all have adequate pull to undertake such a project. This is something that is tremendously needed in the country to stimulate online business.

Share your thoughts and views, add any other suggestions or point out flaws in the logic.