JWT Intelligence have recently covered off a Nielsen Wire blog post about how emerging markets are defying conventional economic development models with the demand and emergence of the mobile phone as a disruptive model.

Both articles look at how “traditional” economic models look at Per-capita GDP growth as a spark for growth of innovation. They cite an example where the Per-capita GDP growth has been coupled with predictable internet usage growth. However, when it comes to mobile usage growth, this has not been the case, with the growth of mobile often outstripping the Per-capita GDP growth in emerging markets in Africa and notably in BRIC countries.

The mobile penetration in many of these emerging markets is over 100% (multiple handsets/user). Access to a mobile phone requires a far lower entry cost than traditional access to the internet. While growth still has some correlation with GDP growth, it is not wholly reliant on this economic force to drive mobile usage.

One of the interesting things to note was the point about development of advertising campaigns. While most developed country advertiser media plans incorporate a balance of traditional media and internet based advertising to achieve communication objectives, plans for developing markets will need to leap-frog the internet for the forseeable future to reach burgeoning middle classes in the these developing countries.

Also of interest, were points raised about innovation for mobile technology coming out of emerging markets and gaining refinement in developed markets. The Nielsen Wire post refers to it as “reverse innovation”.

Innovations in mobile banking have certainly come out of these emerging markets with countries like Kenya utilising mobile payment systems like M-PESA for low value purchases (over $320 Million average/month is being transferred through M-PESA).

The Nielsen Wire post points out that “a vibrant set of mobile advertising solutions will be an essential ingredient for long-term growth in emerging markets to ensure adequate trade-up to higher price points and brands as per capita income rises”. It will be interesting to see if currently developed ad models from developed nations will be fitted for emerging markets, or much like the innovations in mobile banking, new models will emerge from within these markets.

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