On today’s episode, we talk to Michael Zaitsev, the Managing Director in Africa for a company called AppsFlyer. We discussed the trends of apps in the African region, the rise and popularity of fintech apps, and whether AI will play a part in app development in the future.
Transcript of the Podcast
Joseph Kuuire, Tech Labari
And welcome back. So we are joined today by Michael Zaitsev. He is a managing director for Africa for Apps Flyer. Hi, Michael. How’s it going?
Michael Zaitsev, AppsFlyer
I’m good, thank you. How are you?
Joseph Kuuire, Tech Labari
I’m doing pretty well myself. So before we get in-depth about the Apps Flyer, can you tell us what Apps Flyer does, what you guys do?
Michael Zaitsev, AppsFlyer
Well, we are a mobile attribution authority. We are MMP, Mobile Measurement Partner. AppStyle was established in 2011 by Oren and Reshev, two friends who understood that mobile was going to be the next thing. But like in the web, we had cookies. In mobile, we don’t have it. So AppsFlyer is coming to help mobile marketers understand mobile activities, mobile revenue, and ROI. And since then we’ve become a global leader. We are around 70% market share globally. And yeah, and myself targeting now Africa to be much better in this field. So basically we’re measuring how apps are behaving or performing in the African continent and other places.
So basically FinTech is kind of dominating the African landscape on the continent. Around 80% of the apps and investments and apps and most ad monetization is going to FinTech.
AppSlayer is just a third-party data processor. If you are an app developer, you will be the data owner. And we will only process it for you and show you the right way to use this data.
OK, that sounds good. OK, since you are kind of the, I guess, the expert when it comes to measuring. How would you, I guess, look at the state of the African app landscape as far as the key trends and the growth areas? What’s happening in the African continent so far when it comes to apps?
It’s very interesting to see how Africa developed itself and what apps are currently much more popular. We’re talking about FinTech and finance apps. They’re the most popular all over Africa. And it’s interesting when you’re asking about Africa. It’s a huge continent by the way, I know everyone knows. But Nigeria is not like South Africa and not like Morocco and not like Kenya. Each and every country I mentioned acts as different countries. I believe that there is a connection with all of them. We can say that Africa has some connectivity but we need to concentrate on countries.
In general, the FinTech vertical is the most popular all over these countries. And the majority of investments go to this vertical as well. Okay. So basically FinTech is kind of dominating the African landscape on the continent. Around 80% of the apps and investments and app and ad monetization going on FinTech.
Yeah. Interesting. And what would you say may be the second most popular sector when it comes to apps?
Delivery. But, I think that’s a good question. I think that Africa can be much, much bigger than it is currently, at the current stage. And many startups and developers are concentrating on fintech and concentrating only on their countries. And it’s a shame because their vision and the level of innovation in their apps are huge. I believe that if they will open their mind and they will try to be global companies, they can conquer the world and be the leading apps all over the world. But currently, most of them concentrating only on their hometowns. And it’s a shame for now.
Oh, interesting. So basically, they’re focusing on their own countries. So what other maybe opportunities do you think they are, apart from just focusing on just the other countries that do it, more cross-border, What opportunities do you think app developers can take note of?
So the first opportunity, as I mentioned, is to think global and try to target not only your country, but let’s start from the whole continent. Most of them try to, like Nigerian startups, target only Nigeria. Some of them trying to be global, and we see a lot of them. There’s great case studies like Kuda Bank, Flutterwave, Opay, FinTech startups that become global and become very big players globally. I also believe that there are huge opportunities in Africa because the population is so young. The majority of the people are young people. And they trying to go to the big cities from the suburban and from the villages. They’re trying to have smartphones and we see that the numbers are rising. And this is a huge opportunity for any startup, for any vertical, just to take this population, young population and try to hook them on something new that will help their life to be.
I think you mentioned Nigeria has been one of the countries where there’s a lot of app development. What other African countries do you see as far as popularity of apps, using apps basically? Which other African countries are coming up when it comes to usage?
I believe we have the big four, Nigeria, Kenya, South Africa, and Kenya I mentioned, Kenya, South Africa.
Nigeria, Egypt, very big tech industry and mobile industry. Ghana, a little bit. And I believe that that’s it for now. This is the biggest countries and this movement around mobile. Other countries will just copycat these big countries.
What do you think the challenges are when it comes to other African countries? Why are they not picking up like Nigeria or Ghana or South Africa. What do you think the challenges are in those regions?
Well, the whole continent is suffering from payment issues. The majority of the population can’t pay as American customers. For example, so when you’re trying to think, I would like to develop an app that will be of benefit of the population, but I also want to have some money from it to develop myself, to grow my business.
I think that these companies need to learn more from their competitors abroad. And when apps are trying to enter the market. We are having an issue of how to convince decision makers that data matters
So it’s a big challenge to think how I can do it locally in Africa to bring them this opportunity but also to be positive. So it’s a big challenge. I believe it will change. Again, the population is young. They’re trying to go to the big cities. They’re studying things. Once the companies will become global, they will have their ROI from different countries.
And this will allow them to give these solutions to their countries and with less payment from this side, it will develop them. OK, so basically, they just need to develop more globally to get more success. So I think you mentioned about finance and payments.
Do you have any thoughts in mind about the best way to strategize when it comes to payments? Because as you said, different African countries have their own methods and everything else. But do you think that, are there any strategies app developers can use as far as getting paid for their app developments?
And well, your question is about how to collect money from the customers? Yes. Any strategies as far as trying to actually monetize their apps in different regions.
Thank you for the question. I think that these companies need to learn more from their competitors abroad. And when apps are trying to enter the market. We are having an issue of how to convince decision makers that data matters. Like how to look in data, how to not to go with the gut feeling, but also how to measure yourself better. And it’s important because when some big banks in Africa believe that their marketing campaigns going well, but show me the data, no one cares about it. It’s good. It’s working. Let’s keep it that way.
I believe that African decision-makers should go more into data and how to work with BI systems, how to work with analysts, how to work with systems like Appsflyer that will show you when you’re spending money, when you spend money, and when your money actually working for you. So once it happens, we will see much more companies that develop themselves, growing faster and they can collect money from the people that can afford to pay and you concentrate on this.
Yeah, so I think we mentioned that finance and deliveries are the biggest sectors when it comes to apps. Do you see a growing number of, I guess, app developers when it comes to video games or just games in general across continents?
Unfortunately not. I search for them. I know of four companies, I believe. Yes, there are big ones in South Africa and a few smaller developers. There’s one in Kenya, one in Nigeria, and one in Egypt. I believe that it should be much more. There are some conferences, but these developers are so small, we can’t call them actual players.
But it’s a huge vertical all over the globe, so Africa should go there now.
Okay. So what do you see the future of when it comes to app development in the African region? Do you see any new technology? Because AI is coming up, it’s always a big topic. Do you see something like that being used when it comes to app development in Africa or are we kind of still on the back end of things?
I believe that in the verticals that Africa is spending a lot of time, Africa is much better than the other world in the fintech industry, for example. So we just need to find the right developers to inherit all these new features globally. But I believe that Africa is going very well and in the next 10 years, we’ll see much more improvement in this.
OK. So that means we will definitely see more improvement when it comes to app development. Do you think the pricing might be a factor? Because getting access to tools and companies charging more subscriptions to tools might be a factor? Or is that something that’s not going to affect us?
I can answer about AppsFire, for example. When we do this, we’re going to have the right to develop Nigeria and South Africa, we try to think about new pricing for Africa, just to give a chance for smaller companies to grow with us. The pricing is an issue and also the payment for global companies. It’s a big problem in Africa. Many companies sign a contract with you, but they’re not so fast on paying for this service.
But I think that the basic of this issue is understanding how much important is this data and how much important for you as a developer or decision maker or owner of a company to have this data with you and to decide to have right decisions according to data and stop gut feeling and spray and pray, as I mentioned before. I feel that it’s a very important issue.
2023 was very high in investment in Africa and this year started very low for African developers. I followed the investments and followed the developers to see how they were reacting and it was very interesting to see how they were growing no matter what and spending the money in the right places because of AppStyle usage for example.
We are in a good place and it will change next year for sure. Once it happens, companies will see case studies and success stories of their competitors and they will try to do the same and the movement will change the whole industry.
Okay, so just staying on AI, I know that you guys kind of released something measure ChatGPT. Are you seeing any movements in the African region when it comes to use of chat GPT so far?
Not yet. It’s new also to us. We’re trying to be a marketing as a place where we will have many partners of us that will, can give you a lot of solutions and you as a marketing develop marketeer in mobile, you’ll have this in one place at our system, but not in Africa, not for now. And it’s, it’s super new. I believe that there are many other things that mobile marketers in Africa should know how to use better before the AI.
On the other hand, once the AI is much sophisticated and easy to use, I believe we will share it with our friends in Africa and they will use it better.
Okay, so I just have a couple more questions. So, 2023 is ending. So just a couple of questions about this year so far. What has been the most interesting thing you’ve seen so far in your reports when it comes to app development in Africa?
We have a massive growth in app usage and end usage in Africa despite the year, despite the situation that’s happening in the world. It was very interesting to follow the market.
2023 was very high in investment in Africa and this year started very low for African developers. I followed the investments and followed the developers to see how they were reacting and it was very interesting to see how they were growing no matter what and spending the money in the right places because of AppStyle usage for example.
Our clients growth because of us, with us.
Okay. And do you see, not saying you can actually predict, but what do you see coming in the next year in 2024, as far as trends or any key growth areas?
We will see much more AI usage in the marketing ad spend and ad space in general. We will see much more data usage in Africa. People are starting to understand that the success stories of their competitors matters and they need to be like them. We will see much more investment. The investment will come back to Africa. What else? I see great success for Africa. I see Africa rising next decades. I believe in it.
Okay. So I think on that note, we can end it here. So thank you again, Michael, for answering my questions. Really interesting to see what’s happening when it comes to apps in Africa and what the future looks like. So thank you for coming on.
Thank you, Joseph. Have a good day.
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