Vodacom and Nedbank will be launching a new TV ad on June 26, in an attempt to do away with all the misconceptions that were initially made about the product, soon after its launch last year and hopefully gain more market share.
This time the product is expected to target the higher LSM market and have a broader appeal – not limited to black woman living in rural areas that have little to no money – which was the initial PR mistake, according to managing executive of Vodacom’s M-pesa, Mark Taylor.
Following the release of the cellphone operators annual results last month, many questions were raised with regards to the performance of M-pesa in the country.
Vodacom CEO Pieter Uys had announced that the mobile money initiative had failed to reach expectations and perform as well as it has in other African countries, namely Tanzania and Kenya.
Uys’s statement and his then reluctance to answer specific questions about their M-pesa initiative led to a lot of speculation by industry observers that the project was a fast sinking ship – and it appears that both Vodacom and Nedbank want to clear the cloud of misconception surrounding their joint venture.
Taylor says that broadening of the marketing campaign will entail efforts to target the higher LSMs. “This is a product that anybody and everybody can use, such as domestic helpers, to migrant workers, to employers, and even students,” said Taylor.
Initial challenges and new action plan
Both Taylor and Magda Tollet, marketing head of M-pesa agree that the initial introduction of the product on the market had a lot of misconceptions.
“We are now going for a more youthful approach, opening it [the market] up and showing its possibilities,” says Tollet.
A tough regulatory environment with regards to customer registration and the acquisition of outlets also compounded the company’s troubles, as the local regulations are more stringent in comparison to our African counterparts. Lack of education and product understanding also hindered efforts in the initial roll out of the product.
To combat this Vodacom has developed an Mzala Programme, where it encourages the spirit of entrepreneurship by developing young community leaders to assist the public in understanding the product and its use.
Innovation around the prospects of using IP Based interface at points of sale is also being considered by those managing M-pesa. Ilze Wagener, head of transformational banking at Nedbank believes that the ultimate goal is for M-pesa to bridge the gap between the banked and unbanked market.
Future retail opportunities are currently being explored to allow for a wider spectrum in cash withdrawal and registration facilities. Boxer Stores is next in line to be an M-pesa outlet. Talks are also in place to get stores like Pick and Pay and Edcon involved.
It’s expected that M-pesa will make its way to neighbouring countries soon, whilst all regulatory requirements have been met. Taylor remained mum on the costs and future endeavours involved in broadening the M-pesa spectrum, citing the fact that he didn’t want to give too much information away that might work to his competitor’s advantage.
The initiative currently boasts as many as 3 000 outlets, which comprises Vodacom Shops, Nedbank ATMs, PEP stores, and other registered outlets like Spaza shops in local communities. It also has 140 000 registered customers. With a new action plan in place and some stiff completion around, it will be interesting to see how M-pesa’s performance changes in the coming months.