This post is more for the benefit of my non-South African readers, South Africans would be aware of the phenomena.
I had a meeting with some guys from Mxit yesterday. Mxit is a very interesting product. Its a social network/instant messaging platform for your mobile phone that has 14MM users in South Africa (around 1/3 of the population). How it works is that you’ll install Mxit on your phone and add your friends mobile numbers, Google Talk, MSN etc and be able to chat to them for free on your phone IM style.
They have a micropayment system called Mxit Moolah which then allows you to purchase games, wallpapers, song downloads, access to news and video and other paid content. One of the struggles is that they have to have initial payments come through the handset operators who take a 50% rev share immediately (however there are no further transaction costs when they’re purchasing on their own ecosystem). The costs are extremely low, if you want to have a chatroom style chat, its about R0.05 (about eur0.004) compared with an SMS of R0.80.
They’re an interesting case from a marketing perspective too, they’ve spent nothing on marketing to get them where they are, its all been viral. They’re expanding to other developing markets too, very interesting company.
Brendan McNulty 
4 replies on “Mxit”
European mobilists know about Mxit and covet it's success. There have been many well funded European start-ups providing the exact same service which have failed. Analysis suggests that European kids tend to do their digital socialising with laptops/PC where as their African counterparts use their mobile phone. This has been attributed to the general lack of fixed line internet in SA and the relative cheapness of the mobile internet. European mobilists all see massive opportunity in the African mobile sector!
thanks for the considered response; its interesting to see that Mxit has come to the same conclusion and is aiming at developing markets as opposed to Europe or the US. Africa is the mobile holy land; penetration is huge, people arent on PC, but the challenge is to overcome payment methods and monetise on a mass scale.
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The other dynamic is the relatively high cost of SMS in SA, vs low cost of mobile data – created an easy arbitrage opportunity to do short messaging as data in SA. In Brazil the situation is reversed – they have extremely expensive mobile data and very cheap SMS, leading to all sorts of odd SMS-based services and games(ps.. your link to MXIT is broken, needs some http// stuff in it)