Across various sectors, the COVID-19 pandemic changed consumer behaviours, altering trends and making nonsense of forecasts for the year.
The Q2 GDP report recently released by the National Bureau of Statistics shows that while most sectors experienced a contraction, sectors like crop production, trade and telecommunications experienced positive growth.
Among other sectors that experienced positive growth, Telecommunications grew 18.1% contributing 14.3% to the total GDP. It is understandable that telecommunications would experience a surge in activities during a lockdown. People need constant relations to keep in touch, especially when they have been restricted to the four walls of their homes.
For MTN Nigeria, the Q1 and Q2 reports filed with the Nigerian Stock exchange showed that revenue from Data usage rose by more than N5 billion in Q2 when compared with the previous quarter. The company recorded N79.97 billion in Q2 against N74 billion in Q1.
In the same period, revenue for voice calls dropped by more than N20 billion, from N194 billion in Q1 to N174 billion in Q2.
Commenting on the report, the company had remarked that demand for data and digital services grew, even as other services were impacted by the economic constraints caused by lockdowns and movement restrictions. This is in spite of the 90-day free SMS initiative which was launched in April, where more than 4.3 billion free text messages were sent before the end of June.
Note also that the revenue from data does not factor in the visits to healthcare websites which MTN had zero-rated as part of moves to support Nigerians in accessing credible and reliable data. According to the Q2 report, customers used more than 3,000 Terabytes (equivalent of 3 million GB) of data in visiting these sites.
Towards the end of H1, this initiative was expanded to include a range of education platforms endorsed by Nigerian federal and state governments, but no data was given on this.
A look at Airtel Nigeria’s financials will also reveal same trend. Revenue from data grew by almost a billion naira, from N45.6 billion in the first quarter of 2020 (January to March 2020) to N46.4 billion in the second quarter (April to June). Revenue from voice calls dropped by N14 billion, from N88.9 billion in January to March 2020, to N74.8 billion in the subsequent quarter.
Airtel Nigeria usually reports its figures in dollars, so the figures given above were arrived at using an exchange rate of N380 to $1.
Chief Executive Officer, Raghunath Mandava, explained in the report that this is the result of people seeking new ways of socialising while trying to contain the spread of infection. To keep up with the trend, the company had to increase the penetration of digital recharges and expand its home broadband solutions.
More data, less calls! Why?
As soon as the realities of the lockdown set in, many companies set about activating the remote working framework. To do this, several applications came into use and employees had to set about adapting to them.
Working from home definitely played a role in increasing people’s data needs. A previous report from Themoneymetrics had some workers admitting that their data consumption tripled because of the demands of working online all day. Irrespective of who bore the cost of the increased data demand, employees had to stay online to work, attend to customers and clients, attend meetings, e-conferences and seminars.
The lockdown also saw teachers being compelled to go online. Whereas the usual teaching system in Nigeria would have required students seated in the classroom with the teacher physically present. Private schools took their lessons online during the lockdown. Some ran the entire term curriculum and classes, and even took their examinations online at the end of the term.
These activities came with increased demand for data, from a group of people who barely had need for them before. If the teachers were giving out lessons online, parents also had to ensure that their children were available to take these lessons, and this meant even more data.
In addition, some consumers converted most of their voice calls into data calls, using apps like WhatsApp, Facebook, skype, Google etc.
Many brands also had to rethink their advertising and promotion strategies. There was hardly need for adopting electronic billboards and roadshows since people had been confined to their homes. Some of these companies took the options of online conferences, webinars, live sessions on Instagram and Facebook, and other opportunities to interact and engage with their customers online. These, of course, came with data implications for the audience.
A lot of information that could have been shared via voice calls are now being done through internet connectivity. Live sessions online have become the surest way to create activities with a customer base that you do not have personal interactions with.
Current data trends, as revealed in the American Business Council Economic e-conference recently held, indicated that hygiene concerns about cash could be responsible for the increase in e-commerce transactions and growing dependence on internet connectivity for both work and lifestyle needs.
Note that the data consumption figures stated in the article do not factor in the 3,000 Terabytes (or 3 million GB) of data consumed in visiting zero-rated sites during the period. One Gigabyte of internet data costs an average of N300, and multiplied by the free 3 million GB, we could be looking at almost N1 billion (N900 million) worth of data consumption.
Add this figure to the actual N154 billion of data revenue MTN recorded in the two quarters, and the N92 billion of data revenue for Airtel Nigeria in the two quarters, and we can see that Nigerians used at least N247 billion worth of data in H1 2020. This figure is not conclusive, of course as it does not factor in data revenue from the other two telcos – Globacom and 9Mobile.
According to Bola Asiru, Principal/Divisional Lead at MasterCard Advisors (Sub-Saharan Africa), consumer habits have been completely changed by the pandemic, and it is now more difficult to predict buying behaviours. However, what is certain is that there is going to be a lot of contactless business operations, and the data need will surge even higher among Nigerians.
The company noted that it will be sharing its values and updates to its users through the status feature available on WhatsApp.
In the coming weeks, Whatsapp plans to display a banner on their App that will provide users with information on its new privacy policies that they can read at their own pace. And they will subsequently remind users to review and accept these updates to keep using the platform.
Over 175 million people message a WhatsApp Business account every day and more will want to do this in the future.
WhatsApp charges businesses to provide customer service on WhatsApp – not people. So, this new update is about optional business features that are a part of the broader efforts to make communicating with a business secure, better, and easier for everyone.
The company is building a business that puts people in control – what people choose to send to a business is up to them, not to WhatsApp.
WhatsApp also reminded its users that they are committed to protecting users’ privacy and security, so personal messages will always have end-to-end encryption, so WhatsApp can’t read or listen to them.
In case you missed it
- Earlier this year, WhatsApp announced that it will start sharing users’ personal information with Facebook.
- The tech giants got a lot of backlash from people concerning this privacy update and they have worked round the clock to clear the misinformation.
- Whatsapp’s new policy forced some users to seek Signal and Telegram as an alternative, as they consequently both experience a surge in downloads.
Jumia plans to spin off logistics and payment unit in a bid to become profitable
Jumia Technologies is laying out longer-term plans to spin off divisions and enter new countries.
Jumia Technologies announced a plan to spin off its logistic unit in Africa in a bid to boost revenues, which have been helped by the pandemic as e-commerce activities rose during the period.
This was disclosed by Co-Chief Executive Officer, Sacha Poignonnec, who said its time Jumia lays the foundation for future growth, in a Bloomberg report.
He added that the unit to be focused on is responsible for goods transport in 11 Africa countries it has operations in, including Nigeria and also the payments unit of the company, which enables Jumia to settle transactions.
The co-CEO said the company is exploring spinning off both units.
“We created something that does not really exist in Africa, which is an end-to-end logistics partner on the continent. We have built it from the get-go so that one day we are in the position to carve it out if we want to.”
Poignonnec added that Jumia in recent years has opened up its logistic units, enabling 3rd party suppliers in negotiating shipping and transport costs.
“The focus is on reducing losses and controlling costs, and deciding where to allocate our resources. No one questions the relevance of e-commerce as a business — and the opportunity in Africa is massive. Seven years ago, people were questioning how we are even going to do this, now the only question remains on profitability.”
He also added that as Jumia exits operations in some African markets, it still sees opportunities in some, especially Ethiopia, as being African focused enables the company and shareholders to have an exposure to the entire continent, citing institutional investors like MTN and MasterCard working with Jumia across the continent.
Jumia’s stock price has increased by more than 500% in the past 12 months.
What you should know
It was reported in August that Jumia recorded a loss after tax of N17 billion in the second quarter of 2020, despite the rampaging effect of COVID-19.
It was also reported last month that apart from the rebounding stock price, the company is recording positives in almost all performance indices in the year 2020.
In the Q3 financial results released on 10 November 2020, Jumia’s gross profit was €23.2 million ($27.3 million), a YoY increase of 22 percent.
Jumia’s gross profit after fulfilment expense reached €6.6 million, compared to a loss of €1.7 million in the third quarter of 2019, marking the first time that the Jumia Group scored a positive in its gross profit after fulfilment and advertising expenses.
Sanwo-Olu launches Nigeria’s first electric car, to complete Lagos-Badagry expressway
Sanwo-Olu unveiled the first Nigerian electric car named Hyundai Kona.
The Lagos State Governor, Babajide Sanwo-Olu on Friday, November 13, 2020, unveiled the first Nigerian electric car named Hyundai Kona.
The car, which is a product of Stallion Group, was launched at the VON Automobiles Nigeria in Ojo, Lagos State where the car was manufactured.
The new Kona, an Electric car is regarded in European motoring industry as the world’s number one, with the cost, put at about N24 million
While speaking during the unveiling of the product, Sanwo-Olu observed that VON has over 40 to 50 years of vehicle manufacturing history, when they were assembling various Volkswagen products.
Governor of Lagos State, Mr @jidesanwoolu today unveiled the first Locally-Assembled Electric Car called Hyundai-Kona at the Stallion Group Automobile Factory, Ojo Lagos. #ForAGreaterLagos @StalliongroupNG @gbenga_omo @drobafemihamzat pic.twitter.com/b8EAN4b6RQ
— Gawat Jubril A. (@Mr_JAGss) November 13, 2020
The governor was full of commendation for Stallion Group for the noble initiative, just as he promised that Lagos State Government will make provisions for electricity charging points for the vehicle across the state, to make it easy for users to enjoy their Electric Vehicles (EV).
The Governor also promised the completion of the Lagos-Badagry Expressway, which was started under the administration of former governor of the state, Babatunde Fasola, in order to facilitate business activities in the state.
Sanwo-Olu said, “Lagos-Badagry Expressway which has been expanded from 2 to 10 lanes will soon be complete, we are not rushing the road; we are building a first-class road construction project.’’
The Managing Director, VON Automobiles, Mr Rohtagi Manish, while explaining the essence of the launch, pointed out that Kona will change things positively in the Nigerian auto market.
According to Manish, the changes in global temperature and weather patterns are seen today are caused by human activity. Kona, he said, is one way to respond to the global weather challenges, so as to achieve a greener environment.
This appears to be a huge boost for the promoters of more environmentally friendly automobile and subsequently promote a green environment. This will also help to drive the Federal Government’s efforts to shift focus from petrol-based automobile to vehicles with a cheaper source of energy