UNRAVELLING THE BoP WALLET 1 2 Over 60% of the Kenyan BoP - PowerPoint PPT Presentation

UNRAVELLING THE BoP WALLET 1

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Over 60% of the Kenyan BoP consumers own a mobile phone, but very few use applications other than M-PESA https://www.infodev.org/infodev-files/final_kenya_bop_study_web_jan_02_2013_0.pdf

Challenge at Hand M-PESA is currently our largest revenue growth driver, contributing to just over half of our total service revenue growth Zero Charges Shs 185bn P2P M-PESA transactions below Total social impact of M-PESA in 2016. Most Shs100 do not attract charges. Buy of the value arose from M-PESA customers Goods tarrifs for transactions of up to being able to receive, save and send money Shs 200 attract no charges. freely and jobs created by M-PESA agents. 4

Over 66% of Africa’s economy is informal How can we get reliable data on spending? 5 http://nitibhan.com/wp-content/uploads/2016/01/Yeebo_Market_01.jpg

The BoP Challenge Highly Informal Market 1 More Frequent Purchases 2 Unpredictable Cross Category Purchase Decisions 3 (Coping mechanisms …) Diverse, Stochastic Spending – Betting! 4

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What is Consumer Wallet? Conversations through mobile messaging that ask Kenyan consumers daily: What did you buy How did you How much did you yesterday? pay? spend? 8

Answering Spending Questions Consumer Wallet collects daily spending information from Kenyan consumers and breaks down this information into four key areas: Allowing you to answer three important questions: 1 2 3 How do consumers across Who is your brand’s How does this change over various classes spend? real competition? time? 9

Divider – Transition into BoP CW Deepening BoP Understanding through Consumer Wallet 10

BoP Consumers in CW LSM <6 with proportional representation across Gender, age and region 45% Difference in Average Income Mobile Phone Possession (Basic, Feature Smart) 11

1 in 5 BoP Consumers forgoes an expenditure to buy Airtime - World Bank

Overall Wallet Share Trend 25% 25% 23% 18% 17% 15% 14% 13% 13% 12% 11% 10% 9% 9% 9% 7% 7% 7% 7% 6% 6% 5% 5% 4% 4% 3% 3% 3% 3% 2% 2% 1% 1% food household & airtime bills transport non-alcoholic medical bills betting household alcoholic entertainment personal care beverages ware beverages & tobacco May-18 Jun-18 Jul-18 13

Wallet Share Trend – Rest of Consumers BoP – Some notable differing priorities to the Rest of the consumers 25% 24% 24% 17% 15% 15% 13% 12% 12% 12% 9% 9% 9% 9% 8% 8% 7% 7% 7% 6% 6% 6% 6% 5% 5% 4% 4% 4% 3% 3% 2% 2% 2% food household & bills airtime transport medical bills household ware non-alcoholic betting alcoholic entertainment personal care beverages beverages & tobacco May-18 Jun-18 Jul-18 14

BoP – Some notable differing priorities Wallet Share Trend - BoP to the Rest of the consumers 26% 25% 24% 17% 14% 14% 13% 12% 12% 10% 10% 9% 9% 8% 8% 8% 8% 7% 6% 6% 6% 6% 6% 5% 5% 4% 4% 3% 3% 3% 3% 3% 2% food airtime household & betting medical bills transport bills non-alcoholic household ware entertainment alcoholic beverages personal care beverages & tobacco May-18 Jun-18 Jul-18 15

BoP – Some notable differing priorities Wallet Share Trend - BoP vs Rest to the Rest of the consumers 16

Understanding the BoP Coping Mechanisms 17

ACTIVATING BoP VOICES 18

Activating B O P voices 80% of Phone More than 90% mobile activity is texting phone ownership Generating high definition Understanding the non- Consumer Profiles digital transactions 19

Even more Opportunities More Spending Data than there has ever been in Africa 1 Moderate Volume and Velocity ; Controlled Variety ; 2 Zero Veracity Opportunity to Develop Market Segments using Robust 3 Clustering Algorithms

Using Clustering Algorithms to segment and profile 21

Segmentation Using CW to build powerful unique consumer demographic profiles. Gender: Living standard measure: Gender: Living standard measure: Female 3 Female 5 Age group: Total amount spent in 12 days: Age group: Total amount spent in 12 days: 30-34 KES450.50 18-24 KES770.88 Region: Approx. spending/month: Region: Approx. spending/month: Rift Valley KES3,130 Nairobi KES3,940 #profile_001 #profile_002 Food 36% Food 24% Transport 19% Transport 7% Other Household bills 14% Other Household bills 5% Household and Personal care 12% Household and Personal care 5% Airtime 10% Airtime 14% Non-Alcoholic drinks 8% Non-Alcoholic drinks 7% Home Ware & Appliances 0% Home Ware & Appliances 10% Alcoholic drinks & Tobacco 0% Alcoholic drinks & Tobacco 26% Entertainment 0% Entertainment 1% 22

CW Dashboard 23

Intimate Segment Conversations - Snapshot 24

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