At whatever industry conference or meeting you go to these days it seems that the real buzz is all about Africa and how much potential it offers the online gaming industry. As with all industry trends it is always difficult to know how much traction an idea is currently achieving, and how much is unsubstantiated hype and the proverbial everyone getting on the “band-wagon”.
Having been an affiliate since 2003, Web Analysis Solutions Limited has attracted a large amount of African traffic to its football tips and statistics websites WinDrawWin.com and PredictZ.com. Seventy-percent of our traffic now originates from Africa, and our African visitor growth is more than doubling each year. In recent years we have started to do very well out of emerging African markets, primarily due to promoting local brands that have a much better chance of converting than traditional global brands. African markets offer great value and potential as we will describe below, but taking a balanced view there is a lot more change and development in Africa that could make online gaming more successful and lucrative.
Firstly, let’s clarify some misconceptions about Africa. We tend to refer to Africa as one big market. It’s not. Just like European countries do not behave the same way in terms of online gaming, African countries do not either. African online gaming is very different between countries – user behaviour, taxes, licensing, payment methods, terminology and language, online trust and familiarity, and a whole host of other factors vary according to each geo.
Africa is also often termed an “emerging” market, but it is not. Betting in Africa has been around as long as it has in Europe. However betting has very much been, and perhaps still is in a lot of countries, a land based activity. Regardless of channel, betting in Africa is undoubtedly extremely popular though.
Betting in Africa is changing. With the rapid growth in full feature smart phones across Africa online growth has been enormous. Some reports have claimed that the number of smart phones in Africa has doubled in the last 2 years. The cost of mobile technology has also dramatically fallen, as well as the cost of data, albeit still restrictive in some countries.
Growth on our own websites has reflected the general trend in African mobile growth. Two years ago a marketing manager from a Nigerian operator told us that at least 50% of our website traffic would be desktop - hard to believe when our sites average 80% mobile globally. However, upon investigation we found it was actually the case. The reason – at the time the majority of sports bettors would struggle to get a good enough internet connection on their phones, let alone own phones that would render most websites very well, and quickly on a slow connection. Therefore most Nigerians would use desktop, if they did bet online at all. What’s more, this usually equated to more affluent Nigerians who could surf the internet from their office where connections were reliable and fast. Fast forward to 2017 and 85% of Nigerians visiting our sites are now mobile. In Kenya it’s even higher – more than 90% of our visitors are mobile. Conversion varies, but when users do convert to depositing players they are surprisingly good value in terms of revenue, player retention and loyalty. Unlike the small sports betting margins that European operators work on, African margins are much higher at around 25%. The nature of betting is very different to Europe in that users tend to bet on high volume, high odds, but low stakes multiple bets.
The challenge now is that many operator websites are only just catching up in terms of good mobile functionality and, more importantly, mobile payment methods.
Effective payment methods are the key to operator success in Africa. In Kenya we see conversion from registration to depositor higher than 50%, because it is easy and familiar for users to register using their mobile phone number, which is then connected to their mPesa payment account. In Nigeria we see conversion as low as 10% due to the lack of an mPesa-like equivalent mobile payment method and streamlined mobile registration and first deposit user journey. It is frustrating that online growth in Africa is currently so strong, and registration rates are very good, but conversion is lacking in some countries.
Operators in Africa of course need to have good brand awareness, a great product, good odds value, trustworthiness, fast pay outs, and all those other things that do not make online gaming in Africa any different a business proposition than in Europe or the rest of the world. However, if operators overlook payment methods then they are certain to fail, or at least miss out on converting a lot of players who register and then fall out of the registration process. For example, 95%+ of our users in Kenya use Vodafone’s mPesa payment method to deposit and withdraw. Traditional European bookmakers do not offer this method, so even if they are licenced and willing to accept Kenyan players then they are limited to those few who might have a debit or credit card, or some other form of payment method. The challenge for operators is understanding local payment methods, and secondly getting these payment operators to work with them and their own products, which can mean having a local presence in the African countries an operator wants to offer services in.
Despite a lot of betting activity still happening in the shops and on the street or through agents in many areas of Africa, the growth in online betting is only going to grow in the coming years. When you look at the success of retail brands like Jumia.com and Konga.com, Africans already have a proven appetite for ecommerce. There’s no reason why much of the land based and agent based betting activity cannot move online, as it started to do 15 years ago in the UK.
Going forward, any savvy operator in the African market must also consider setting up a credible affiliate program on an effective affiliate platform, and with trained affiliate managers that can drive growth and work with affiliates. A number of African operators have already launched affiliate programs, many in the last 12 months, and are already stealing a lead on their competitors. Others have set up affiliate programs, but they just don’t have the resource commitment at the moment, nor the understanding of the potential that a large affiliate program can offer. Some European facing affiliate programs rely on affiliates to generate almost 50% of their user growth and African operators need to understand this potential. Affiliation in Africa is still in its infancy, and operators perhaps see affiliation as an unnecessary and costly overhead given that much of their revenue still comes from land based activity.
African brands may soon also face stiff competition from some of the established European and more global facing brands too, as they seek to capitalise on these emerging markets. It is therefore even more critical that well established African brands grow their reputation and user base online through affiliation. Although there might not currently be many large African based affiliates, many of the established and large super affiliates in Europe and the rest of the world have an enormous amount of untapped African traffic. For example, prior to 2 years ago we were sending most of our 2.5 million Kenyan visits per month to traditional European brands and achieving very little conversion. Today we are registering one Kenyan player for every 40 clicks with local facing brands that offer the products Kenyans want, and more importantly the payment methods Kenyans are familiar with.
The African online gaming market is an exciting one, full of potential. The industry buzz around Africa at the moment is certainly warranted, but as with any emerging industry trend it will only reach its full potential if operators seize the opportunities Africa offers. For more information and insight into the Sub-Saharan market be sure to attend WrB Africa taking place from 7th – 8th June in Nairobi, Kenya.
About the author: Matthew Symonds is CEO at Web Analysis Solutions Ltd, one of largest affiliates in Africa. They have attracted a large amount of African traffic to their football tips and statistics websites WinDrawWin.com and PredictZ.com.
About WrB Africa 2017: The 2nd instalment of WrB Africa will take place from 7-8 June at the Villa Rosa Kempinski Nairobi in Kenya. This event provides a vital channel into the African gaming market, offering a market leading, unrivalled agenda with top regulatory and operational experts. Our first WrB Africa hosted over 30 market leading organisations, all there to learn, network and do business.
Join us today to gain competitive advantage, learning from the experiences of global industry leaders and building productive relationships with key stakeholders from across the sub – Saharan region.