Technology company Neotech Kenya last week launched a smartphone application called Livia that enables users to buy medicine and personal care items as the latest entrant in a market that offers consumer convenience, but where website and app launches have so far failed.
Fewer than 0.01 per cent of consumer mobile apps will achieve financial success in 2018. But it is a problem borne more of marketing than of utility.
“Livia is to the retail pharmacy industry, what Uber is to the taxi industry. We have signed up reputable chemists in Nairobi and Mombasa as Livia Partner Chemists. As partners, they receive an instant alert when a customer makes an order for medicine or personal care items via the app and are invited to submit quotations. Chemists that offer the most competitive prices are then linked with the customers,” said Dr Samier Muravvej, Chief Executive Officer of Neotech.
To promote safety and build customer trust, the app, which has so far managed to attract 2000 user downloads, has ensured its partner chemists go through a rigorous vetting process to ascertain that they can supply safe drugs and has also secured the endorsement of the Pharmaceutical Society of Kenya.
However, in a market where there are over two million applications across mobile app stores, achieving financial success takes more than just building and launching an app in the store and expecting people to discover and download it for use.
The challenge for Livia, as for earlier efforts at selling medicines online in Kenya, is achieving a high enough public profile to reach a critical mass of sales.
“Consumers are increasingly turning to recommendation engines, friends, social networking or advertising to discover mobile applications rather than sorting through the thousands of mobile apps available. As a consequence, we predict that through 2018, 99.9 per cent of consumer mobile apps will be considered a financial failure by their developers,” reported research and advisory firm, Gartner Inc in a study on the state of the mobile apps market.
“The vast number of mobile phone apps may imply that mobile is a new revenue stream that will bring riches to many. However, our analysis shows that most mobile applications are not generating profits as the mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun. Application designers who do not recognise this may find profits elusive.”
The balance between development costs and marketing costs to achieve a successful online launch has shifted markedly in the last seven years.
In 2010, when smartphones were not a household item, it was almost guaranteed that developing and launching an app would be a financial success.
There were fewer applications in the mobile store and social media marketing was usually enough to get people to download and use new launches.
“Back then, developing a medical app would have cost at least Sh500,000 because there were fewer skilled developers, but a high demand for such services, and minimal or no marketing budget was required. However, now with more skilled developers and more applications in mobile stores, it can cost as little as Sh100,000 to develop an app but a marketing budget will also be required in order to guarantee financial success,” said George Kibaru, a Kenyan app developer.
“Promoting the app before its official launch is one tactic that has proved to be successful. This can create brand awareness and lead to more downloads for the app.”
- African Laughter