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Sunday, July 14, 2024

Travel tech: Africa needs a unique approach

Travel tech: Africa needs a unique approach

The prevailing message throughout conversations at the Web in Travel conference held at Cape Town’s Innovation City last week was that technology has the power to transform the travel industry. But whether it’s AI, e-commerce, or payments technology being deployed in Africa, it will require unique thinking to cater for its various markets and customer demands.

Christian Bombrun, CEO of Digital Platforms for MTN, said 287 million people accessed the Internet through mobile in Africa. With good network coverage, which is growing “super-fast” in Africa, and smartphone penetration of 55%, mobile connectivity dominates in the African market.

This dominance is also reflected in mobile service providers’ foray into other digital services such as financial services and marketing.

While mobile is definitely king, Bayo Adedeji, CEO of Wakanow, Nigeria’s largest online travel platform, said in the African market, operators still needed to consider a hybrid business model in which people had the ability to shop online, but also to deal with a real person. “45% of our transactions originate online but people want to see who they’re paying.”

Expedia’s global Path to Purchase research found that, in the 45 days leading up to travel, 80% of travellers used an online travel agency, 61% used a search engine, and 58% used social media for inspiration.

But, added Adedeji: “In Nigeria, which is the second-largest market in Africa, only 20% of customers are online.” Ease of payment is also a major issue, with just 4% of his customers paying by card.

Jonathan Smit, founder of payments platform Payfast, said in South Africa e-commerce was still not the predominant way of doing business.

“If you had to guess what percentage of commerce happens online, in South Africa it’s only 3% and that’s a fairly developed market.”

In other emerging markets, household income has played an important role in the growth of online travel.

Ross Veitch, CEO of online booking platform Wego, said: “In China, across South East Asia and India, the real key for travel generally, and online travel specifically, to take off was when incomes went above $10 000 per household per year. In the African context, you’ve got the added complexity of really poor (air) connectivity across the continent so people are paying more to travel.”

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