Doing Business in Africa
I often get asked as a marketer to demystify the big daunting but yet beautiful monster task that is trading in Africa. In my 20 years of travelling across our continent, I have experienced the highs and lows (read “requiring great bouts of patience and tollerance”) and have come out on the other side, far richer for the experience. The riches have come in the form of learnings and hopefully the monetary variety will follow in due course!
So lets start with the numbers…
Total population: Over 1,2 billion
Top 3 most populous countries: Nigeria ±183m, Ethiopia ±98m, Egypt ±84
Top 3 most widely spoken languages: Swahili, Amharic, Yoruba
As a marketer, you know and understand your client’s product or service, you know who uses it, how they use it, how manufacturing and distribution occurs and who your competitors are (in the country of origin) for that share of consumer spend. The big question is how do you decide if it’s a viable business opportunity to expand your brand’s geographic reach into new territories?
Research…research…research! Too many global businesses have failed by thinking they know better and roll out into a new country without identifying whether they need to relook at the primary business offering and tweak their strategy to appease local consumer demands. The “customer is king” motto really holds true.
For starters, I suggest that you experience each country from the bottom up. What do I mean by this? Don’t let Google be your only travel experience.
Desktop research will give you the stats but not the sights and smells! You need to visit each country and ideally go beyond each capital city in order to soak up the culture. Yes, it’s costly to travel around Africa but this initial capex will save you tons of angst in the long run if the insights you glean are strategically sound.
Engage with the locals
There’s nothing wrong with staying at the Hyatt but you’ll learn a lot more about the people of a country by staying and eating where the locals do. Try that 3 Star Hotel, eat the street food, visit formal and informal markets, have a beer at a local tavern and make friends with a taxi driver (car or boda boda). That’s where you’ll be in touch with your potential customer base and you’ll learn a great deal from just listening. As the saying goes, God gave you 2 ears and 1 mouth so use them proportionately!
I remember years ago I was fortunate enough to be invited to the eTV “Mumbai mini MBA” trip in India. Part of that exeprience included completing several outreach tasks every day. We were given a limited budget and told to report back daily with a review of tasks done, money saved and learnings gained. How wonderful and liberating it was to head out with a rough plan, ask strangers for assistance, get on a train to “nowhere” and just wing it. That experience really left an indelible mark on my mind and soul.
So why have I referenced Mumbai if we are talking about Africa? Because on that trip some people chose not to see past the sights and smells and rather chose to complete their tasks in air-conditioned taxis, looking through rose tinted glasses and they learnt nothing!
As in all countries globally, there will always be “no-go” areas so a little common sense goes a long way in ensuring that your experiences are fruitful.
Enough cannot be said about marketers needing to understand the people of a country and how they go about their daily lives as those insights should shape your strategic business offering.
Once you fully understand your consumer and their needs, wants and desires you can determine whether there is a viable business proposition to expand your brand into a new market.
If so, the route to market planning process takes over. In this phase you identify whether you are manufacturing locally or exporting from the country of origin and the related processes then apply. With Africa trading in U$D as well as local currencies, taking forward cover is always prudent in order to cover any forex variations or delays that you may have between “paying out and being paid”. Supply chain processes can be very long and arduous so astute financial provisions are imperative.
The parting thought is that in Africa’s complex retail environment, even companies poised with the right products can miss the mark if they don’t get them to the right place - a challenging task in Africa’s fragmented markets.
- The continent is split into Francophone, Anglophone, Lusophone and Arabic territories along with the native languages in each country. Speak to consumers in their own language and you’ll have a greater conversion rate
- Marketers keen to reach African consumers need to look beyond the obvious and explore innovative and persuasive ways to resonate with niche and mass audiences
- You need to create clear targets for products and or services post launch and include corrective action plans based on severity of risk. Change management is critical and plans should be strategically fluid.
- The retail market is extremely fragmented therefore outlet choice is critical
- The following industries have the biggest adspend on the continent: Telecommunications, Financial, Retail and FMCG (including alcoholic beverages) industries
- There are global companies, like Nielsen, that can offer consumer confidence indicators and category consumption insights http://www.nielsen.com/ssa/en.html
- TV still has the greatest share of spend
- Radio has the widest reach at the lowest cost
- Print is dimishing but publications are offering online versions which are gaining traction
- Freedom of the Press is still stifled across most of the continent as governments own mass market communication channels
- In 2017, Africa has seen the fastest growth rates of internet penetration therefore there has been a proportionate uptake of digital marketing. Much of this growth in internet users has been driven by more affordable smartphones and mobile data plans.
- In 2017, mobile penetration in Africa sat at 80% therefore most of the digital uptake has been via mobile phones
- Facebook dominates as the the social media app of choice
- WhatsApp is the top messenger app on the continent and agencies have used in for interactive marketing http://www.bizcommunity.com/Article/196/78/163984.html
- Africa leads the way with unique, local startup mobile apps that make consumer’s lives easier e.g. M-Pesa
Digital trends for 2018
- As smartphone penetration increases across Africa, mobile will cement itself as the primary vehicle of choice for the consumption of content; be it online press releases, general entertainment via YouTube, music streaming, online purchasing or just the good old chit chat via social media.
- Cross-border e-commerce continues to provide significant growth opportunities for retailers and manufacturers with an international online product offering.
- Africa has long presented a unique challenge for traditional data collection. With the rise of mobile connectivity, the Internet of Things and accessible satellite data, a more complete picture of the continent and its people is possible. In the hands of the right people, this picture can guide Africa to a more prosperous and stable future. http://www.bizcommunity.africa/Article/410/19/174438.html#topstory
In summary, a lot of what I have stated hold true for most countries around the globe but it’s Africa’s entrepreneurial spirit that sees its people changing their futures through the world of innovation.
Image reference - https://www.iol.co.za/travel/take-a-walk-in-zanzibars-stone-town-9412425
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