Share

Gear up for Africa

Connect with the Continent: Understanding Key Consumer Trends and social movements across the African Continent Right Now! by Terry Behan

THERE is not much more business to be done with mature markets. Those looking for growth are turning to the various emerging markets.

For South African businesses, an emerging market is on our doorstep - the rest of the Africa. Gross domestic growth rates top 12.4% (Ethopia) compared to France’s barely perceptible growth. Africa has a fast growing population and a middle class larger than the United States. So, gear up and expand into Africa.

Well, not that fast. The first chapter of this insight rich, very accessible book is “Mind the Gap.” “The gap between how the African market is represented in the global media and the realities on the ground is bigger than Aliko Dangote’s bank balance,” writes author Terry Behan.

Having worked in new business development in Africa on behalf of South African companies, he has had first-hand experience of the African reality.

Yes, there are indeed huge opportunities, but they bear no resemblance to what Western advanced businesses understand by “opportunities.”

If establishing a brand in Europe entails opening a flagship store and spending serious amounts of money at above-the-line-advertising, you are advised not to go this route in Africa. Retail space is at an all-time high, and well-trained staff is in short supply.

Moving quickly around any of the large cities in Africa is simply not possible. “I am just popping out of the office for 30 minutes to go to the bank” is not heard on the continent. Traffic jams are a daily reality, but also suggest opportunities.

Social media and digital communications are far more appropriate. Mobile and internet penetration has grown by 458% in Angola, 129% in Tanzania and 99% in Ghana and a $50 smartphone would enable retailers to connect to online shoppers. If retailing in the West went from open markets to stores and then to online, in Africa it may be prudent to skip the middle step.

Opportunities to promote one’s brand abound, but not in the places most common in the developed world.
Nollywood churns out over 1 000 movies a year, which are broadcast across Africa and even to North America. With the dearth of modern cinemas, most movies are sold directly as DVDs and have a total estimated viewership of 300 million.

This provides a unique opportunity for “product placement”. This marketing technique involves having your product appear favourably in the movie – the lead actor drinking your brand of soft drink or the leading lady changing her baby's nappy using your brand. In Hollywood this would be prohibitive, in Nollywood, not so.

Africa is famed for its sense of community, and this too offers opportunity. With new housing estates going up all over at varying economic levels, the opportunity to favourably present one’s brand is available. In Johannesburg, Simba has sponsored a superb play area with their logo clearly visible.

Both children and parents are exposed to the brand and refer to the play are by its name. A small price for a big return.

Class needs to be recalibrated when talking of Africa. When talking of middle class it can mean anyone earning more than $2 a day, when $40 a day puts you beneath the poverty line in Germany.

The estimation of the size of the African middle class at 300 million is misleading and when the base is raised from $2 to $20 the market is probably less than half the common estimate. It is nevertheless a large enough group to sustain economic interest.

In the past offering guests Jonnie Walker Blue Label was a sign of extreme wealth. Those days are gone. Today the wealthy - mostly newly wealthy - display their largesse at a much higher level, with the operative word being display.

If others cannot see your wealth, they cannot esteem you or envy you. Africa’s elite, like their counterparts in the West in the 1990s, favour conspicuous consumption. Catering to this segment has shown excellent returns.

Perhaps the most surprising of Africa’s differences is that of the mega-successful pastors. These men command financial empires as large as some of the wealthiest men in Africa as they cater to the spiritual and social needs of their communities.

Their popularity and influence in the communities is stratospheric.

What makes Behan’s book so commercially valuable is his ability to link every observation about the continent to an opportunity to promote a product or service. Each chapter, whether it is describing the youth of Africa and their huge representation in society or Afrocentric design, has insights into the commercial connection.

This is an easy read, full of insight and facts. For anyone even thinking about doing business beyond our borders, it is a must read.

Readability:        Light --+-- Serious
Insights:           High -+--- Low
Practical :          High -+--- Low

 - Fin24

*Ian Mann of Gateways consults internationally on leadership and strategy. Views expressed are his own.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.93
-0.2%
Rand - Pound
23.90
-0.0%
Rand - Euro
20.44
+0.1%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.1%
Platinum
906.59
+1.1%
Palladium
1,012.66
+1.1%
Gold
2,221.55
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders