Ed­u­ca­tion Goes Dig­i­tal

The Im­pact of Mo­bile Con­tent & Com­merce on the Ed­u­ca­tion Mar­ket

Arabnet - The Quarterly - - Content -

A study of the im­pact of mo­bile con­tent and com­merce on the ed­u­ca­tion mar­ket

MEF is the global com­mu­nity for mo­bile con­tent and com­merce. Among its pub­li­ca­tions is the Global Con­sumer In­sight Se­ries, which col­lects data from 13 sam­ple mar­kets, in­clud­ing Qatar, the UAE, and Saudi Ara­bia, and gen­er­ates world­wide in­sights on at­ti­tudes, be­hav­iours and trends in mo­bile con­tent and com­merce. Their third re­port, re­leased in April 2014, in­ves­ti­gates the im­pact of mo­bile con­tent and com­merce on the global ed­u­ca­tion mar­ket. The study looks at how users of ed­u­ca­tional apps be­have as com­pared to users of all apps.

Rimma Perel­muter, CEO at MEF said: “Mo­bile-first mar­kets are clearly driv­ing the up­take of ed­u­ca­tional apps. This nascent sec­tor has been quick to adopt en­gage­ment and busi­ness mod­els from other types of app with en­ter­tain­ment and gam­i­fi­ca­tion key mo­ti­va­tors for con­sumer up­take”.

“A com­mon theme across our In­sight Se­ries with re­ports on Mo­bile Money and Sec­ond Screen­ing is the fact that early adopters are driv­ing mo­bile com­merce across the board. This theme con­tin­ues, with ed­u­ca­tional app users who are more likely than the av­er­age mo­bile me­dia user to pur­chase via their mo­bile.” Here are the key take­aways from the re­port:

POP­U­LAR­ITY AMONG MO­BILE APP USERS Ed­u­ca­tional apps rank 9th among all app cat­e­gories in terms of down­loads, with 17% of mo­bile app users down­load­ing this par­tic­u­lar type—that’s a third of the num­ber down­load­ing mo­bile games. The num­ber has dropped from 20% last year. The decline how­ever is in line with a gen­eral decline in app con­sump­tion which has been at­trib­uted to a ‘choosier’ smart­phone con­sumer and the rise of ‘ hero’ apps with a longer ac­tive life.

Users of mo­bile apps show the great­est en­thu­si­asm for ed­u­ca­tional apps. The five coun­tries that ex­ceed the av­er­age rate of down­loads in this sec­tor are In­dia, South Africa, US, Kenya and Nige­ria. This is at­trib­uted to the mo­bile-first na­ture of th­ese re­gions where ac­cess to on­line re­sources is scarce (the US is an ex­cep­tion, ex­plained be­low). UAE and

Qatar show down­load rates very close to the av­er­age of 17%. KSA falls be­low it.

MO­TI­VA­TION FOR PUR­CHASE When asked about “mo­ti­va­tions for pur­chase,” the re­ply “I had to for my school/col­lege/uni­ver­sity” mostly came from users in Nige­ria, In­dia, Kenya, and South Africa, and came least from users in UK, US, and China. A sim­i­lar ob­ser­va­tion was made when study­ing the source of app down­loads. The graph re­sults show­ing who bought apps from an ed­u­ca­tional author­ity web­site and who had to use th­ese same prod­ucts as part of their ed­u­ca­tion were al­most iden­ti­cal. One pos­si­ble ex­pla­na­tion to this ob­ser­va­tion is that wide ac­cess to ed­u­ca­tion re­duces de­mand for ed­u­ca­tional apps, and vice versa. In other words, users are less likely to down­load prod­ucts to help them with ba­sic learn­ing when they can tackle this at school.

THE CU­RI­OUS CASE OF THE UNITED STATES Among the five coun­tries with the high­est down­load rates of ed­u­ca­tional apps, only the US is con­sid­ered as a ma­ture mar­ket. Mo­bile app users in the US down­load around twice as many ed­u­ca­tional apps as their de­vel­oped mar­ket coun­ter­parts. One pos­si­ble ex­pla­na­tion could be re­lated to the iphone’s much higher share of the lo­cal smart­phone mar­ket com­pared to other ge­ogra­phies. The iphone’s man­u­fac­turer, Ap­ple, is known to push for ed­u­ca­tion hard in an ef­fort to dis­rupt the pub­lisher stran­gle­hold on ed­u­ca­tional books.

MO­BILE PUR­CHASES AMONG ED­U­CA­TIONAL APP USERS The re­search re­flects that 65% of the to­tal group stud­ied makes some form of pur­chases from their phones. Among ed­u­ca­tional app users, this num­ber in­creases to 72%, and up to 84% for those who have pur­chased from an ed­u­ca­tion site.

Ed­u­ca­tional app users also tend to use a wider va­ri­ety of pur­chase chan­nels than the broader group. They are far more likely to buy from so­cial me­dia pages, op­er­a­tor stores and re­tailer web sites, for ex­am­ple. This could be be­cause so many ed­u­ca­tional app users are lo­cated in

de­vel­op­ing mar­kets where the app store has less of a stran­gle­hold on app pur­chases

THE ROLE OF EDU­TAIN­MENT, BRANDS, AND AD­VER­TIS­ING Many users don’t per­ceive ed­u­ca­tional apps solely as an aca­demic prod­uct. In fact, when asked what mo­ti­vated them to buy an ed­u­ca­tion app from an ed­u­ca­tional site, the top an­swer was ‘en­ter­tain­ment’. 47% of ed­u­ca­tion app users chose this fac­tor com­pared to 35% of con­sumers buy­ing any app from any­where. This re­flects blurry line be­tween play and learn­ing.

The im­por­tance of brands can­not be un­der­es­ti­mated as an in­flu­encer of pur­chase across all types of apps. 11% of mo­bile app users said they down­loaded apps be­cause “it was from a brand I know and trust.” When it comes to ed­u­ca­tional app users, 29% say they bought the apps from an ed­u­ca­tional site, high­light­ing the sig­nif­i­cant in­flu­ence of brands—in this case, ed­u­ca­tional sites—on pur­chase.

In­ter­est­ingly, ad­ver­tis­ing is also a pow­er­ful mo­ti­va­tor. Among all users of mo­bile apps, 8% said they bought an app be­cause “ad­ver­tis­ing prompted me”. That fig­ure in­creases three folds (24%) among ed­u­ca­tional app users who bought from an ed­u­ca­tional site and where prompted by ad­ver­tis­ing.

What­ever the mo­ti­va­tion for down­load­ing and pur­chas­ing, ed­u­ca­tional app users are gen­er­ally more en­gaged with the busi­ness of mo­bile than most.

Gam­i­fi­ca­tion of apps is driv­ing ed­u­ca­tional mar­ket growth, with en­ter­tain­ment as a key mo­ti­va­tional trig­gerer.

While on­line su­per­mar­kets are still emerg­ing in the MENA re­gion, they have been around in de­vel­oped mar­kets for more than a decade. The idea started with mostly on­line-only stores that sell gro­ceries in cer­tain places. The fail­ures that took place with sev­eral on­line gro­cers, such as We­b­van, in­ter­rupted the growth and im­prove­ment of the ser­vice. Only in­no­va­tive sell­ers with a solid busi­ness model and a limited area of ser­vice, such as Freshdirect, sur­vived and grew. To­day, big­ger names, in both con­ven­tional and in­ter­net shop­ping, are more and more in­ter­ested in the con­cept. Tesco, Wal­mart, and Ama­zon, among many oth­ers, have joined Freshdirect to sell gro­ceries on­line in se­lected ar­eas.

The con­cept is re­gain­ing in­ter­est for good rea­sons. Other than known benefits of buy­ing off the in­ter­net, on­line gro­cery shop­ping can be very con­ve­nient for cus­tomers who don’t have the time to browse aisles. It can also be a great way for shop­pers to avoid im­pulse pur­chases, low­er­ing the over­all shop­ping cost de­spite the ex­tra money paid for de­liv­ery. For peo­ple who live in New York, for ex­am­ple, there is no eas­ier way to get the ex­act needed amount of gro­ceries than to log on to Freshdirect; it al­lows cus­tomers to choose the recipe they want and de­liver the in­gre­di­ents of that re­cepie to their ad­dress—in the right quan­ti­ties.

Sell­ing on­line could be good for busi­nesses, too. Although pro­cess­ing an on­line or­der adds costs that don’t ex­ist when sell­ing con­ven­tion­ally, there is sub­stan­tial money saved on stock­ing shelves, cashiers, carts, etc. More im­por­tantly, sell­ing on­line fa­cil­i­tates gath­er­ing and an­a­lyz­ing in­for­ma­tion about buy­ers and their in­ter­ests, lead­ing to a deeper un­der­stand­ing of the mar­ket.

To­day, the most popular on­line su­per­mar­kets cover a limited geo­graphic area, usu­ally ur­ban cities. For ex­am­ple, Freshdirect op­er­ates only in New York; Ama­zon Fresh op­er­ates in South­ern Cal­i­for­nia, San Fran­cisco Area, and Seat­tle Area; Tesco op­er­ates mainly in Lon­don; and the list goes on.

E-SU­PER­MAR­KETS IN THE RE­GION Baby-steps are be­ing taken by su­per­mar­kets in MENA to shift on­line. Spin­neys, the renowned su­per­mar­ket chain, started an on­line shop­ping and de­liv­ery ser­vice in Larger Beirut area in Le­banon, with a plan to cover more ar­eas. Strangely, the Spin­neys smart­phone app does not in­clude this fea­ture. Car­refour, the in­ter­na­tional su­per­mar­ket chain, launched a sim­i­lar ser­vice in Dubai. Geant also launched the first hy­per­mar­ket store on­line in the Emi­rates.

There are sev­eral on­line-only su­per­mar­kets in the re­gion. Among many we name Sal­laty.jo in Am­man; Biqala.com in Cairo; and trol­ley.ae, Su­per­mart.ae, and many oth­ers in Dubai. But even though more and more e-su­per­mar­kets are emerg­ing in the re­gion, only a very small num­ber of the big brick-and­mor­tar su­per­mar­kets are shift­ing on­line, although with their al­ready es­tab­lished cus­tomer base and ex­per­tise in in­ven­tory and lo­gis­tics, they have a higher chance of suc­cess than nascent on­line stores. Suc­cess sto­ries in the West, namely in the US and UK, had shown that un­less there was a high level of in­no­va­tion in an on­line ser­vice, cus­tomers would pre­fer to stick to con­ven­tional su­per­mar­kets that are more familiar and cred­i­ble.

FAC­TORS FOR SUC­CESS­FUL E-SU­PER­MAR­KET BUSI­NESS MOD­ELS Re­gional su­per­mar­kets have to con­sider sev­eral fac­tors be­fore in­te­grat­ing on­line shop­ping ser­vices. One is choos­ing the right cov­er­age area, which is di­rectly cor­re­lated with their abil­ity to de­liver gro­ceries fast enough to main­tain their fresh­ness. That’s why Ama­zon, while de­liv­er­ing ev­ery other com­mod­ity across the world, pro­vides on­line gro­cery shop­ping in 3 ar­eas only, and Freshdirect.com, although has been in the mar­ket for over a decade, still op­er­ates in one city: New York.

The cities that ben­e­fit from suc­cess­ful on­line su­per­mar­kets (New York, Seat­tle, Lon­don, etc.) have a high pop­u­la­tion and great in­fra­struc­ture. Re­flect­ing that on MENA, a suc­cess­ful on­line su­per­mar­ket must op­er­ate in cities with a dense pop­u­la­tion to en­sure a sus­tain­able cus­tomer-base, a re­li­able trans­porta­tion sys­tem for timely de­liv­er­ies of fresh prod­ucts, ro­bust and fast In­ter­net con­nec­tions, and high pen­e­tra­tion lev­els of credit/debit cards—although the lat­ter is not as cru­cial as the other fac­tors as COD can still be a vi­able pay­ment op­tion. Also, the life­style of the pop­u­la­tion should be con­sid­ered. A so­ci­ety with dual work­ing par­ents, for in­stance, would see a great need for on­line su­per­mar­kets.

Tak­ing th­ese fac­tors into con­sid­er­a­tion, we can safely claim that GCC cities pos­sess the needed cri­te­ria for the suc­cess­ful im­ple­men­ta­tion of on­line su­per­mar­ket mod­els; and we are most likely to see more brick-and-mor­tar su­per­mar­kets shift on­line in th­ese cities. Dubai, which is now turn­ing into a smart city, might be the one to take the lead.

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