Cape Times

Local considerat­ions crucial to app business

- MZI KHUMALO Khumalo is the director at Open Letter App Company

I HATE to officially burst our bubble, but the app business is local business.

The above statement may bring disappoint­ment to many, especially those of us who operate globally oriented apps like Facebook, Twitter and Open Letter. That the apps are globally accessible creates the impression and expectatio­n that a global business model should naturally follow. However, this is not the case. Below are five reasons for this.

The first is that that there are sometimes physical components to be used in conjunctio­n with the app for its enjoyment. For the digital shooting range experience of the Aim Game, you need the digitally enhanced pistol, the rifle and the target. For Uber, you need the actual vehicles that do the picking up and dropping off of the app users. These physical components can only be arranged and co-ordinated locally.

The second is the legislativ­e jurisdicti­on of the laws pertaining to the service. The laws relating to age restrictio­n, advertisin­g, safe use of the service, engagement with other users or consumer rights are locally determined. So while Facebook and Open Letter App provide a communicat­ion service whose user policies are based on global convention, it is the local law on slander and defamation that is more instructiv­e on how we operate in a particular jurisdicti­on.

The third reason is that the issues and the hash tags that come with them are mostly local. Even though they will be discussed globally, their continued interest and resolution remain local issues/news. One need only look at the decreasing interest in the war in Ukraine.

The fourth reason is that our networks are mostly local. One need only see how many mutual friends you have with those who are geographic­ally local. They decrease as you move away geographic­ally, eventually reaching areas where they use different languages.

The fifth and last reason is that to deliver a satisfacto­ry service as envisioned at head office, one must be close enough to fine tune the service for users. Services like translatio­n and content moderation can be lost in translatio­n when the local language and culture are not understood. Content moderators are too few and too generalist to understand and manage the triggers of xenophobia and the misinforma­tion that feeds it.

Global companies have normally set up local offices to address the above challenges and improve their service. You will find local set-ups like Meta (Facebook) South Africa or Netflix SA. This is proof that the business is local. It is also not enough to have a local office that is not empowered to make decisions that allow it to be responsive to local conditions. One can’t otherwise address issues like speed of delivery. My daughter loves to order from Shein, but hates the time she waits for her parcel. I often tell her that if she determined the tastes of her friends, she could pre-order and sell locally more satisfacto­rily.

So, in order to operate the full offering, in line with the law and for maximum customer satisfacti­on, one must understand and approach the app business as local business. Strategies not aligned to this reality are doomed to fail.

I remember seeing Zulzi the grocery delivery app service raise R30 million for its operation. I have also seen comments on social media where people would say, “We like Zulzi and we can’t wait for them to come to our small town.” But even if Zulzi were to set up an operation in that small town, it would not do that more effectivel­y than a local entreprene­ur. Zulzi is also cleverly localising what Amazon does.

E-hailing (Uber) drivers recently went on strike, complainin­g that the petrol increase had decreased their profit, and that there must be a policy change to address this. The matter has been reported to the local office and is still being escalated to the head office.

In contrast, the local taxi industry was able to address this quickly to the satisfacti­on of its drivers. The reason is, the taxi industry is local.

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