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Mobile operators need to build online marketplaces

marketplace

Online MarketplaceThere 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.

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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.
MintMarketOther 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.

18 thoughts on “Mobile operators need to build online marketplaces

      1. The answer is already in the making, enter biNu, the mobile application that (for now) allows you to send low cost SMS’ but soon will allow local developers to host their apps/content for as much as 70/30 (in the developers favour)….

        1. host as in allowing developers to run their networking apps/content on your servers or host as in provide a market ?

          1. Host as in allow developer to make apps that are relevant to the Zw market and that they know people are willing to pay for

  1. I like your article on the many things you happen to have mentioned. My 2 cents to the matter is in two parts.

    First the optimizing of content to be downloaded, what I mean by this as in your example, content bought from an operator should really not attract a charge as internet usage, or rather a single item should be billable off airtime or an e wallet like you mentioned.

    Second being sustainable distribution of revenue generated as profit by the network to content owners I doubt MNO would agree to 50/50 arrangement or even 30/70 as they prefer having the lions share in any value added service.

    When a meaningful method to address just these two areas I’ve mentioned I think your idea would take off in no time and show results.

  2. A local Consultancy Company is working on an online store to sell their products. will post the link soon. The on-line store is now on testing mode. should be live to the public within a fortnight.

    1. There’s another thats working on a combined android & iphone shop in Zim. It will also sell stuff. On beta release too!

      Coming soon…

      end of unknown trailer.

  3. I think people are now thinking of a local online payment gateway (like Paypal) as opposed to a marketplace (like Apple Store or Google Play) as discussed above.

  4. if Econet could API, their ecocash service that would be useful for web developers and mobile developers alike

    1. I once emailed them about that. they looked excited/interested about doing that but said that would only come (possibly) in the future.i think they will eventually do that

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