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Geospatial data key to growth in Africa

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Africa is a place of extreme contrasts, with a booming middle class and small, rapidly growing clusters of wealth existing alongside swathes of widespread poverty. For a business owner hoping to tap into these growing markets, the value of population and geospatial data at a granular level cannot be overstated.

As competition for lucrative business opportunities becomes even fiercer in regions like Europe and North America, Africa is attracting more attention from the international business community than ever before. And this isn’t just in the powerhouses of South Africa and Nigeria – both of which have recently shown lacklustre economic growth of around 0.8% – while smaller economies like Ghana, Rwanda and Ethiopia show growth at double the rate of many of their sub-Saharan counterparts.

Africa is a place of extreme contrasts, with a booming middle class and small, rapidly growing clusters of wealth existing alongside swathes of widespread poverty. For a business owner hoping to tap into these growing markets, the value of population and geospatial data at a granular level cannot be overstated.

How, for example, is a restaurant or coffee chain that is already experiencing promising growth in East Africa to accurately understand neighbouring markets, into which they hope to aggressively expand in the coming months and years?

Buying survey data from traditional providers, and assembled at the city-wide or regional scale, can only get a business so far. After all, knowing how many potential consumers are present in a city with millions of people does little to help you capture the right clientele, when much of a business’s turnover is dependent on local foot traffic and patronage of customers mostly based in the immediate area.

Location, Location, Location

What is the average household income in the area you’re eyeing-out for your next franchise location? How many children does the average family have? How do they consume media? How many people live and work in the area? Which competitors will you be going up against, and how popular are they? Knowing the answers to these questions can mean the difference between success and failure in any market, especially those as rapidly evolving as the ones in many African urban centres.

By combining existing household data with a far more granular layer of individual information, it becomes possible to construct a more useful target-customer profile than has ever been possible before. At Fraym, for example, we help our clients to identify potential customers at the hyper-local level through division of the geographical landscape into far smaller sections, often grids that divide communities into detailed areas of as little as a single square kilometre.

A competitive landscape analysis that takes as many high-quality data points into account as possible is essential to reducing chances of failure in growing markets. Fortunately, the digital data disruption is adding unique advantages to the practice. When customers are clearly understood, a business can make the most informed decision possible when searching for a location that will expand their operations successfully. Satellite imagery and complex machine-learning algorithms are an invaluable way to process such large amounts of data, looking for the common thread between household survey data sets and the geo-coordinates of the respondents, to identify new opportunities that would previously have gone unnoticed.

Getting Big Impact from Small Areas

Very often, businesses will consider locations based on anecdotal evidence or expensive survey data – inefficient, often dated, and usually not aligned to the data points that a business would find relevant to their own product or service offering. These anecdotes and surveys also often focus on national, aggregate results, missing important insights into consumer characteristics beyond traditional boundaries. But our experience has proven time and time again that success rests on understanding small clusters of consumers at the neighbourhood level, with pockets of untapped consumers often popping up at the intersections of traditional geographic divisions.

The Bottom Line: Quality Over Quantity

Ask any multi-national company for a quick opinion about the African business landscape, and you’ll likely hear that it’s intimidatingly low on consumer data, but also rich with potential that almost no other region can match. Granular consumer data that is informed at the individual and community level, rather than the aggregate level, is essential for businesses hoping to get a foothold in these fast-growing pockets of potential. It’s no longer enough to ask where customers live. We must ask how they live as well, and answering this question will depend on new data sources and creative ways of looking at them, if companies are looking to grow across Africa in the coming years.

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ME and Africa Consumer tech spending to hit $149bn

Reaching $130bn this year, consumer spending on technology in the Middle East and Africa is expected to grow just 4% a year.

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Consumer spending on technology in the Middle East and Africa (MEA) is forecast to total $130.8 billion this year, a year-on-year increase of 4.1%. According to the latest Worldwide Semiannual Connected Consumer Spending Guide from International Data Corporation (IDC), consumer purchases of traditional and emerging technologies will remain strong over the 2019–2023 forecast period, increasing at a five-year compound annual growth rate (CAGR) of 3.5% to reach $149.4 billion in 2023.

86.3% of all consumer technology spending in 2019 will be on traditional technologies such as mobile phones, personal computing devices, and mobile telecom services. Mobile telecom services (voice and data) will account for 68.7% of this amount, followed by mobile phones which will account for 26.6%. Spending growth for traditional technologies will be relatively slow, with a CAGR of 2.4% for the 2019–2023 forecast period.

“Faster connectivity, combined with declining data service costs from telecom service providers and the need for end users to use telecom services for an increasing number of devices, will ensure that consumer spending on traditional technologies will continue to grow,” says Fouad Charakla, IDC’s senior research manager for client devices in the Middle East, Turkey, and Africa.

Emerging technologies, including AR/VR headsets, drones, on-demand services, robotic systems, smart home devices, and wearables, will deliver strong growth with a five-year CAGR of 10.2%. This growth will see emerging technologies account for 17.1% of overall consumer spending in 2023, up from 13.7% in 2019. Smart home devices and on-demand services will account for around 93% of consumer spending on emerging technologies by the end of the forecast period.

“The low penetration of smart home devices in the region, combined with growing efforts from market players to educate home users on the benefits and usage of these devices, will serve as an engine of growth for consumer spending on emerging technologies,” says Charakla. “A large portion of end users are already looking to invest in devices that will improve their productivity and quality of life, two key demands that smart home devices can be positioned to fulfil.”

On-demand services represent a new addition to IDC’s Worldwide Semiannual Connected Consumer Spending Guide. “On-demand services enable access to networks, marketplaces, content, and other resources in the form of subscription-based services and includes platforms such as Netflix, Hulu, and Spotify, among others,” says Charakla. “As connected consumers juggle multiple services across their devices, it is essential for technology providers to understand how the adoption of these various technologies and services will impact their customers’ experiences in the future.”

Communication and entertainment will be the two largest use case categories for consumer technology, representing more than 79% of all spending throughout the forecast. More than 70% of all communication spending will go toward traditional voice and messaging services in 2019. Entertainment spending will be dominated by watching or downloading TV, videos and movies, as well as listening to music and downloading and playing online games. The use cases that will see the fastest spending growth over the forecast period are augmented reality games (49.5% CAGR).

The Worldwide Semiannual Connected Consumer Spending Guide quantifies consumer spending for 22 technologies in ten categories across nine geographic regions. The guide also provides spending details for 23 consumer use cases. Unlike any other research in the industry, the Connected Consumer Spending Guide was designed to help business and IT decision makers to better understand the scope and direction of consumer investments in technology over the next five years.

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Could robots replace human tennis players?

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While steeped in tradition, tennis has embraced technology on multiple fronts: coaching, umpiring and fan experiences. Since the early 2000s, the Sony-owned Hawk-Eye system has been assisting tennis umpires in making close calls. At Wimbledon, IBM’s Watson AI analyses fan and player reactions in real-time video footage from matches to create highlight reels just minutes after the end of a match.

Meanwhile, at the ATP Finals in London, similar data analysis is being carried out by digital services and consulting firm Infosys.

GlobalData’s Verdict deputy editor Rob Scammell hears the future of tennis discussed at a recent panel discussion about the use of data analytics and technology in the game.

Scammel writes: “Infosys has been partnered with ATP for five years, providing features such as its cloud-based platform, which leverages artificial intelligence to analyse millions of data points to gain insights into the game.

“Players and coaches can also make use of the Infosys’ Players and Coaches Portal, allowing them to “slice and dice” matches on an iPad with 1,000 data analytics combinations. This is data crunching is vital according to Craig O’Shannessy, strategy analyst for the ATP World Tour and a coach for 20 years – including for the likes of Novak Djokovic. 

O’Shannessy says: “Video and data analytics is crucial for giving players an edge. It’s about finding out of 100 points, the 10 or 15 that matter the most, and explaining that these are the patterns of play that you want to repeat in these upcoming games to win those matches.”

However, although Chris Brauer, director of innovation at the Institute of Management Studies at Goldsmiths, University of London, asked whether the “inevitable conclusion” of technological innovations in tennis was removing humans from the game entirely. ATP chair umpire and manager Ali Nili suggested that while there could one day be robot players adjudicated by robot umpires, it would be an entirely different sport.

Nili told GlobalData: “At ATP, we’re most proud of our athletes. It’s our athletes which make the tennis exciting. It’s how fast they are, how strong they are being. As humanbeings, we compare them to us and we’re fascinated by the things that they’re able to do. They’re the number one attraction for anyone who comes in, watches tennis, and everything else is secondary, you know, all the data and everything else, because we try to make our athletes more appealing.”

Could robots replace human tennis players?

Raghavan Subramanian, associate vice president and head of Infosys Tennis Platform, says it’s a “very philosophical question” and that we can look to the precedent set by other ‘man vs machine’ face-offs.

“In chess, we had [Garry] Kasparov play against the computer. So I think the natural first transition will not be two robots playing against each other, but one robot, possibly playing against the best player today. That’s the first possible bridge before two robots play.”

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