Today, owning DVDs and CDs seems like a quaint idea – why would you clutter your home with physical media when you can get the music or movies you want over the Internet on a pay-per-download or subscription basis? But the digitalisation of our entertainment is just the start of an on-demand economy that is rapidly changing our lives.
From fast food to personal transport, more and more of the products and services we use every day are being transformed into on-demand products. Think about the rise of ride-hailing companies like Taxify, Uber and Lyft, for example, and how they allow us to buy transport as a service with a swipe on a smartphone.
Though startups referring to themselves as the “Uber of tutoring” or the “Uber of car washing” and so on has become a cliché, there is a profound change underway in market. Many of us are moving away from owning stuff or getting tied into long-term service contracts to buying what we want or need as a service, as and when required.
As Accenture puts it in its Technology Vision 2019: “Digital tech means businesses are no longer able to just capture markets. They can capture moments, delivering goods or services to a particular customer at their particular moment of need.” Some of 85% of executives in Accenture’s global research agreed integration of customisation and real-/near-time delivery is the next wave of competitive advantage.
One of the most important factors driving the trend is the way that digital technology enables companies to deliver instant gratification. Think about how we have quickly learnt to take it for granted that an Uber will arrive five minutes after we order it, or how the global ecommerce industry has evolved towards same-day or even two-hour delivery, or how you can binge-watch a series of Netflix as soon as it drops.
Though South Africa is a bit behind the curve when it comes to delivery of ecommerce goods on the same day, we are seeing a range of startups come to market with on demand offerings that are enjoying strong consumer adoption. From domestic cleaning on demand via SweepSouth Services to WumDrop’s local courier service to OrderIn’s fast food delivery, innovation abounds.
The benefit for consumers is that they pay for the service they use – no more, no less – and get it when they need it. Here are some examples of this trend in action.
The mobile network operator, rain, is disrupting its market with a 4G, data-only service priced at 5c per meg, R50 a gig. You pay only for the data you use at the end of the month – no complex contracts or bundles to understand, no risk of high out of bundle charges, and no danger of your data expiring.
Television and music
Pay television survives in South Africa because of its local content and exclusive sports rights – but streaming services such as Netflix are giving it a run for its money. For many viewers, it’s attractive to pay R100 or R200 a month for a service that offers completely on-demand entertainment. You can also subscribe to a growing selection of international sport streaming services when you want to watch a big golf or tennis match. In months where money is tight or you will be travelling or there is simply nothing that you want to watch, you can easily switch off your subscriptions.
On the international front, challenger banks and fintech companies are coming to market with a range of innovative, mobile banking products and services. For example, Rocket Mortgage in the US offers home loan approvals in as little as 10 minutes, while digital banks like Starling Bank in the UK allow people to open a bank account within minutes.
South African institutions are now looking to join the party, with Tyme having recently launched its digital-centric bank and Discovery looking to deliver its own app-driven Discovery Bank later this year. Then there is Bank Zero, an initiative headed by former FNB CEO, Michael Jordaan. He, too, promises a slick, simple mobile experience when the bank launches.
Will any of these mobile challengers take the gap and offer a genuine on-demand service, perhaps offering affordable flat-fees for transactions and scrapping the monthly account fee? There may be a real disruptive opportunity here for the first institution that takes the gap.
Insurance, traditionally a grudge purchase for most consumers, is also becoming an on-demand service as “insurtechs” and larger insurers alike offer customers digital-only customer experiences that give them more control over their insurance products and services. One example is the Sanlam-backed Go Cover – an app-based, on-demand accident cover product – which offers adrenaline junkies, holiday-makers and seasonal workers life cover of up to R1 million for as little as R30.
Car insurance, too, is turning into an on-demand service, powered by artificial intelligence and algorithms, just like ride-hailing services. For example, you can sign up for car insurance with Naked in a matter of minutes. Then, Naked’s CoverPause allows you to switch your accident cover off when you are not using their vehicle for a while.
The next wave of consumer choice
It’s no coincidence that most of the companies above are young, mobile-first startups that are unencumbered by legacy systems, processes and infrastructures. The success stories in on-demand commerce tend to start with a clean slate, building their businesses with the goal of addressing consumers’ needs and wishes at the moment they emerge.
They use technologies such as mobile apps, big data analytics and artificial intelligence to gather real-time information from their customers, and respond to their needs nearly instantaneously. As autonomous vehicles, 3D printing, drones, smart home devices and other technologies reach maturity, we can expect to see the growth of on-demand explode.
This will usher in a new era for consumers, with more freedom of choice, more flexibility and more transparency into their relationships with companies. One day we may see fixed-term contracts for cellular telephony or opaque and impersonal insurance offerings to be as old-fashioned as needing to buy an entire CD album because there was one song on it that you liked.
Tech promotes connections across groups in emerging markets
Digital technology users say they more regularly interact with people from diverse backgrounds
Smartphone users – especially those who use social media – say they are more regularly exposed to people who have different backgrounds. They are also more connected with friends they don’t see in person, a Pew Research Center survey of adults in 11 emerging economies finds.
South Africa, included in the study, has among the most consistent levels of connection across age groups and education levels and in terms of cross-cultural connections. This suggests both that smartphones have had a greater democratisation impact in South Africa, but also that the country is more geared to diversity than most others. Of 11 countries surveyed, it has the second-lowest spread between those using smartphones and those not using them in terms of exposure to other religious groups.
Across every country surveyed, those who use smartphones are more likely than those who use less sophisticated phones or no phones at all to regularly interact with people from different religious groups. In most countries, people with smartphones also tend to be more likely to interact regularly with people from different political parties, income levels and racial or ethnic backgrounds.
The Center’s new report is the third in a series exploring digital connectivity among populations in emerging economies based on nationally representative surveys of adults in Colombia, India, Jordan, Kenya, Lebanon, Mexico, the Philippines, Tunisia, South Africa, Venezuela and Vietnam. Earlier reports examined attitudes toward misinformation and mobile technology’s social impact.
The survey finds that smartphone and social media use are intertwined: A median of 91% of smartphone users in these countries also use social media or messaging apps, while a median of 81% of social media users say they own or share a smartphone. And, as with smartphone users, social media and messaging app users stand apart from non-users in how often they interact with people who are different from them. For example, 52% of Mexican social media users say they regularly interact with people of a different income level, compared with 28% of non-users.
These results do not show with certainty that smartphones or social media are the cause of people feeling like they have more diverse networks. For example, those who have resources to buy and maintain a smartphone are likely to differ in many key ways from those who don’t, and it could be that some combination of those differences drives this phenomenon. Still, statistical modelling indicates that smartphone and social media use are independent predictors of greater social network diversity when other factors such as age, education and sex are held constant.
Other key findings in the report include:
- Mobile phones and social media are broadening people’s social networks. More than half in most countries say they see in person only about half or fewer of the people they call or text. Mobile phones are also allowing many to stay in touch with people who live far away: A median of 93% of mobile phone users across the 11 countries surveyed say their phones have mostly helped them keep in touch with those who are far-flung. When it comes to social media, large shares report relationships with “friends” online who are distinct from those they see in person. A median of 46% of Facebook users across the 11 countries report seeing few or none of their Facebook friends in person regularly, compared with a median of 31% of Facebook users who often see most or all of their Facebook friends in person.
- Social activities and information seeking on subjects like health and education top the list of mobile activities. The survey asked mobile phone users about 10 different activities they might do on their mobile phones – activities that are social, information-seeking or commercial in nature. Among the most commonly reported activities are casual, social activities. For example, a median of 82% of mobile phone users in the 11 countries surveyed say they used their phone over the past year to send text messages and a median of 69% of users say they took pictures or videos. Many mobile phone users are also using their phones to find new information. For example, a median of 61% of mobile phone users say they used their phones over the past year to look up information about health and medicine for themselves or their families. This is more than the proportion that reports using their phones to get news and information about politics (median of 47%) or to look up information about government services (37%). Additionally, around half or more of mobile phone users in nearly all countries report having used their phones over the past 12 months to learn something important for work or school.
- Digital divides emerge in the new mobile-social environment. People with smartphones and social media – as well as younger people, those with higher levels of education, and men – are in some ways reaping more benefits than others, potentially contributing to digital divides.
- People with smartphones are much more likely to engage in activities on their phones than people with less sophisticated devices – even if the activity itself is quite simple. For example, people with smartphones are more likely than those with feature or basic phones to send text messages in each of the 11 countries surveyed, even though the activity is technically feasible from all mobile phones. Those who have smartphones are also much more likely to look up information for their households, including about health and government services.
- There are also major differences in mobile usage by age and education level in how their devices are – or are not – broadening their horizons. Younger people are more likely to use their phones for nearly all activities asked about, whether those activities are social, information-seeking or commercial. Phone users with higher levels of education are also more likely to do most activities on their phones and to interact with those who are different from them regularly than those with lower levels of education.
- Gender, too, plays a role in what people do with their devices and how they are exposed to different people and information. Men are more likely than women to say they encounter people who are different from them, whether in terms of race, politics, religion or income. And men tend to be more likely to look up information about government services and to obtain political news and information.
These findings are drawn from a Pew Research Center survey conducted among 28,122 adults in 11 countries from Sept. 7 to Dec. 7, 2018. In addition to the survey, the Center conducted focus groups with participants in Kenya, Mexico, the Philippines and Tunisia in March 2018, and their comments are included throughout the report.
Nokia to be first with Android 10
Nokia is likely to be the first smartphone brand to roll out Android 10, after its manufacturer, HMD Global, announced that the Android 10 software upgrade would start in the fourth quarter of 2019.
Previously named Android Q, it was given the number after Google announced it was ditching sweet and dessert names due to confusion in different languages. Android 10 is due for release at the end of the year.
Juho Sarvikas, chief product officer of HMD Global said: “With a proven track record in delivering software updates fast, Nokia smartphones were the first whole portfolio to benefit from a 2-letter upgrade from Android Nougat to Android Oreo and then Android Pie. We were the fastest manufacturer to upgrade from Android Oreo to Android Pie across the range.
“With today’s roll out plan we look set to do it even faster for Android Pie to Android 10 upgrades. We are the only manufacturer 100% committed to having the latest Android across the entire portfolio.”
HMD Global has given a guarantee that Nokia smartphone owners benefit from two years of OS upgrades and 3 years of security updates.