Desire for Social Networking Spurs Mobile Growth in Africa

Filed under: Business |
m pesa cell phone photo

Mobile phones are now essential in parts of Africa

Africa’s thirst for social networking seems insatiable and homegrown products to meet this thirst, like MXit and 2go, have really gotten traction.

It’s a mixture of flirting, free messaging and meeting real people that draws people in. With the current numbers, advertisers will begin to use mobile as a media and support their development.

2go is a mobile social network where people can use IM to chat with their friends for free and meet new friends in its chat-rooms. In total, it has over 20 million registered users, of which 3-3.5 million use it on a regular basis. Over the last 30 days there have been 8 million active users. Its biggest market is Nigeria (61% of total) which has 12.5 m users, followed by South Africa(31%) with 6.5 million users, followed by Kenya (4%) and Other (4%).

It’s continuing to grow at between 40,000-60,000 registered users a day.

All this has been achieved with virtually no marketing and lots of word of mouth. When users sign up, they can send notifications to their friends to join.

The users are young: 74% are 15-24 year olds in South Africa and 60% in Nigeria. The gender balance is almost equal in South Africa with 49% women but slightly more male in Nigeria with 64% men:”In South Africa, it’s the women cleaning our office and the person trying to sell me a prepaid mobile at the corner-store. In Nigeria, users are more educated and sophisticated.”

It is a profitable start-up launched by South African Anthony Davis.

Currently it’s self-funded but it may look for VC funding in the future. As Herson (part of whose background is in VC funding at Softbank) told us:”I’ve only recently joined 2go and I’m their first executive hire. I’m also an equity stakeholder in the business.”

It’s focused on giving users a light application that will work on low-end phones:”We are totally focused on creating the most nimble and light technology. A great deal of users in Nigeria have feature phones so it’s easy to use Java-based application. You simply download it, answer a few questions like your age and you’re ready to go.”

It supports around 1,000 different feature phones (J2ME), Blackberry (with BIS integration) and Android. Better still, its messaging integrates with Gtalk, Facebook and MXit Chat so users don’t have to choose between these applications.

The messaging is free but there are three premium elements: 1) a clickable full screen; 2) goFriends; and 3) a sponsored Chat Room. In addition, 2go is pitching to advertisers that click-through and user engagement rates are between 5-35%. It also offering market research through sending questions to its considerable user base. However, the key source of income is Go credits which the user buys within the application and users use to get access to chat rooms. They have also had advertising from big brand names like McDonalds in South Africa. 50,000 2go users are friends of McDonalds in South Africa.

Herson doesn’t want 2go to overload the simplicity of what it does:”AOL and Yahoo used to try and be everything to everybody. If you’re everything to everybody, you lose your focus. We need to make sure that users know why they’re there, to meet people and date. It’s got to be simple and fun.” That said, it is looking at adding on little pieces of content, things like text-based jokes.

In geographic terms, it wants to focus on those places where it’s already got a foothold rather than tearing off all over the globe. This means building its offer, market share and revenues in its two key markets.

Herson has also soft-launched another company with an app called Friendura, ten days ago that offers private chat rooms where groups of friends and family can share telephone numbers and photos. These chat rooms are limited to only people in the network. Herson says that sign-ups over the two weeks have been brisk and describes it as giving the user “instantaneous sharing of personal moments.”