In order to launch any business, it is of utmost important that you consider your location. In this blog, we will assess lucrative business growth opportunities present for the taxi-booking services in African market.
Image Source : Peerbits.com
In the timespan of a couple of years, the ride-hailing service market in Africa has become a goldmine of a business and attracting numerous businesses to cash in on the opportunity. In addition to market majors such as Uber and Bolt, numerous regional taxi-hailing app development companies are scrambling towards Africa to bridge the gaps and capitalize on the opportunity.
A key reason for Africa being the hotspot of a market is on account of the region’s readiness to adopt rickshaw, motorbike as well as watercraft taxi-hailing services. The acceptance of consumers residing in this region can be motivation enough for players in the taxi-hailing service business to penetrate into the region and consolidate a high market share in Africa.
Below are some of the other reasons that explain why African market should be the targeted market for your taxi-hailing business:
Underdeveloped Transportation Service Can Help you Cut through Into the African Market
Since time immemorial, the countries in the Africa region have remained financially backward. With no proper development initiatives in the region, even the transportation industry has been facing a set back in the region.
That is not it.
In the region where proper transportation services are available, the high transportation fare nearly costs a lot to consumers. This further keeps consumers away from using transportation services.
However, if looked carefully the same underdeveloped transportation facility can serve as a lucrative opportunity to leverage and grow in the African market. Take for instance Uber. Uber was launched in North America, the region with advanced technology and developments. Uber into account the preferences of riders and saw a massive uptake in luxury car.
The smart decision made by Uber?
It launched with luxury rental cars, so as to attract a wider pool of audience. In the same manner, when you target African market, considering its weak economy, you can start with motorcycle rides or car-pooling options. Gradually, as you see a traction in your business, capture the attention of upper class of population with the help of prime and luxury vehicles.
Low Car-ownership Instances to Boost Taxi-hailing Service
It may come to you as a surprise, but the fact is, the car ownership rate in Africa is really low. Blame it to the weak economy or reluctance of consumers to make such a hefty investment, a survey found that there are 35 car owners in every 1000 number of people.
So, the most obvious choice of transportation for these consumers is public and private transportation. However, long queues and significantly high wait times of public transportation and cost-prohibitive nature of private transportation serve as a gap for consumers.
By launching an affordable taxi-hailing service business in Africa, you can make a mark easily, as there is a lack of intense competition. In addition, operational costs in Africa are also less, which translates into huge profitability.
Being located near key oil-producing regions, you can save ample amount that is otherwise spent on fuel as compared to other locations.
Low Cost of Acquisition to Increase Profitability
Being an undeveloped economy, financials in the region of Africa are now gaining strength. However, on a relative note, economic scenario in the region is still weaker than other regions.
On-demand service app businesses can leverage this benefit to target riders with heavy discounts and deals. On the other hand, acquisition of service providers—drivers—is also easy, given the lack of employment opportunities in Africa.
This, further offers a benefit to business owners to acquire both stakeholders—service providers and service seekers—at a low cost, and draw lucrative prospects for their businesses.
Key Takeaway
While the traditional approach of business is to capitalize on opportunities available in key regions, the on-demand service model helps in gaining exposure even in the remotest of the region like Africa to build a business empire out of the underlying opportunities.
A lot of taxi-hailing businesses are already scrambling towards Africa, now is the time to get into the competition to gain an early mover’s advantage. For that, you need an expert ride-hailing software development company that will help you shape your business with the requirements of the real.
Author – Bio
Mushahid Khatri is a Chief Executive Officer at Yelowsoft, one of the leading Taxi Booking app development company. It is known for developing Taxi Dispatch Software of unmatched quality. He believes in sharing his strong knowledge base with learned concentration on entrepreneurship and business.
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