Friday, 29 March 2013

Google's Android, dis-empowering the poor?

Yes, like most of you I love my iPad. At the same time I have promoted Google's Android since its early days. Simply, it fits better for the target group we serve most - the Bottom of the Pyramid. But, are we being misled in our optimism about Google Android? We have spent considerable time addressing this question and now share with you our concerns.
It is obviously exciting to see the potential to 'empower the poor' in terms of: a) developing country app developers can earn a reasonable income by selling Apps in Google Play (formerly Android Market), and; b) the apps developed by these developers serve a purpose that is more relevant to the local community.

Recently, an inspiring story of one rural youth in Sri Lanka developed: his product was a  local language browser app (SETT Browser) that enables web browsing in local languages. It has been downloaded more than 50,000 times from the Google Play. Before its introduction, people who were not literate in English had difficulties in reading content (blogs, newspapers) that was in local languages. The developer of the app (Dhanika Perera)  has since January 2011 developed another six apps for the Google Play, and has set up a company (Bhasha Ltd.). 

But how scalable is the promise?

Our research into four developing countries (Kenya, Rwanda, Bangladesh, and Sri Lanka) illustrated an interesting pattern. In terms of 'relevance' (i.e. in the local, country, context) the majority of the top ten apps are produced by local app developers. Yet  in terms of 'popularity' (i.e. number of downloads), almost all the top ten apps are developed by outsiders (mostly from developed countries). In Sri Lanka, none of the leading apps of the 10 most popular ones were developed by locals. They were products from developed countries such as France, Germany, Sweden and Japan.

Why is this? Are the developing country app developers not capable?, or is there some other issue at play? 

There is a significant population of freelance coders in developing countries who feed into the crowd-sourcing platforms. According to the oConomy report, in 2012 freelance coders in Bangladesh contributed 1.3million projects to oDesk, with 3.5million from the Philippines.  (Data from oDesk).

Major problem

One major problem we found, which might help to explain these disparities, was related to online payment gateways. The developing country app developers do not have the same privileges  as their counterparts in developed countries  to carry out transactions in the online marketplace.  

Google Play supports the sale of paid-for apps in only 32 countries. Google says, 'If you are not located in any of the countries listed, or do not own the required bank account for receiving payments, Google may not be able to pay for the sales in that account by any other means'.
This situation denies opportunities for aspiring app developers in the majority of developing countries (see the online discussions of shared pain by developing country app developers here).  App developers in many countries such as Pakistan, Slovakia, Kenya, and Sri Lanka are struggling to find solutions. (See more evidence linkindi ) .   

* Most familiar online payment gateways such as PayPal are operating in many developing countries only for the outward payments, not allowing inward remittances.  For instance, a small online residential trader in Sri Lanka cannot earn due transactions via a direct PayPal account. About 80 countries including Rwanda, Uganda and Nepal, cannot receive USD transactions via PayPal (see evidence in Paypal link enabled countries, and this link for the not-enabled ones).

Negative outcomes

Some developers work around this problem by setting up accounts in different countries, and working through local banks, and so on. But that increases their costs and kills their competitive edge. This situation increases the risks of them using methods that are not quite legal, or of losing their business transactions. It seems that, often, developing country app developers are being exploited by the larger companies.
(Read online petition by the online community).
This is surely a major issue that stands in the way of developing country entrepreneurs  bringing success to themselves and their communities.
(p.s. Our research into India and Malaysia Google app markets shows some new insights into possible options. We may share those insights in due course).

Additional reading:

Project Pitfalls: 10 Business Risks of Android Development
Analysing e-commerce for development    

Blog by: Harsha Liyanage, Masum Billah and Philip Edge.

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