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.