Name of Faculty Sponsor
Dr. Mona Sinha
Faculty Sponsor Email
msinha1@kennesaw.edu
Publication Date
Winter 2019
Abstract
Vodafone’s mobile wallet service, M-Pesa, was originally created in 2007 for Kenya and was extremely successful in providing millions with access to mobile-based financial services. Essentially, a mobile wallet service enables payments via digital money in the form of mobile airtime. According to industry estimates, the global mobile money market is expected to reach USD 112.3 billion in 2021, with a compounded annual growth rate of 39.6% since 2016. Vodafone launched M-Pesa in India in 2013, but by mid-2019 it had announced its plans to merge its mobile wallet business with an associate company or a third party. Clearly, Vodafone had failed in its attempt to market M-Pesa in India even though India is a rapidly growing emerging market with a gross domestic product (GDP) growth of 8.2% in 2018. Currently over 90% of transactions in India are cash-based largely due to lack of access to bank accounts and low penetration and use of credit/debit cards. This not only hampers business but also exacerbates issues like corruption. India is seen as lucrative for mobile wallet providers due to its large population with growing disposable income, rising mobile phone penetration, increasing number of mobile internet users, government reforms, and government investment in telecom infrastructure. Indeed, the Indian mobile wallet market is poised to grow by 150% to reach $7 billion by 2023. Vodafone had hoped to repeat its Kenyan success by using M-Pesa to target Indians who either didn’t have bank accounts or rarely used them. However, it lost its early entrant advantage, and a host of new start-ups took over the market. The dominant player now is Paytm, the fastest growing mobile wallet in India with a 70% market share. This case study examines Vodafone’s marketing strategy in the context of the competitive, regulatory, and cultural challenges in India. The case questions initiate discussions on a wide variety of issues aimed at uncovering why Vodafone’s M-Pesa failed in India and what it could have done differently.
The case study caught the attention of Mr. Michael Joseph, Chairman of Kenya Airways, who was the founder and former CEO of Safaricom, a Vodafone investee. After reading the case study, Mr. Michael Joseph gave an interview to Dr. Mona Sinha, Associate Professor of Marketing at Kennesaw State University. In the addendum at the end of the paper, Mr. Michael Joseph explains why M-Pesa did not perform as well in the Indian market as the company had originally hoped.
Included in
E-Commerce Commons, International Business Commons, Marketing Commons, Technology and Innovation Commons
