Think Lo­cal

Business Traveler (USA) - - SPECIAL REPORT -

Still, many brands have lit­tle idea how to trans­late the op­por­tu­ni­ties into ac­tion and profit. In­ter­na­tional in­vestors have to com­pete with tra­di­tional‘um­brella’mar­ket stalls of­ten of­fer­ing cheap or coun­ter­feit goods. A lack of in­for­ma­tion about the African con­sumer is leav­ing com­pa­nies at a dis­ad­van­tage, and it is those with years of ex­pe­ri­ence here that do well.

Then there is cor­rup­tion and bu­reau­cracy to over­come, while lo­gis­tics can be un­re­li­able and in­fra­struc­ture lags be­hind much of the de­vel­oped world. Plus, the very di­ver­sity of Africa – 54 coun­tries with dif­fer­ing cul­tures, lan­guages, de­mo­graph­ics and cur­ren­cies – makes lo­cal knowl­edge im­plicit to suc­cess.

It is no­table that the brands that are suc­cess­ful are those cre­at­ing mar­ket-spe­cific prod­ucts ca­ter­ing to the needs of the con­sumer in dif­fer­ent coun­tries. Africa is enor­mous, and the taste of shop­pers in Sene­gal dif­fers widely from those in Kenya or Zam­bia. David Gy­ori, ex­ec­u­tive di­rec­tor of Bank­ing Re­ports, which pro­vides banks with re­search and anal­y­sis of eco­nomic mar­kets in Africa, says it is the brands that un­der­stand th­ese specifics that do best.

“The African con­sumer is chang­ing at high speed, so a dy­namic un­der­stand­ing of their jour­ney is what makes a West­ern brand es­pe­cially suc­cess­ful,”he says.“Part of this un­der­stand­ing is the right price point, one that takes buy­ing power into ac­count and that brings the joy of own­ing a cer­tain brand to the cus­tomer at an af­ford­able price.”

De­spite con­tro­ver­sies, Nestlé has been present in Africa for decades, spe­cial­iz­ing in food prod­ucts such as in­stant cof­fee and pow­dered milk.Yet a re­cent an­nounce­ment that it will scale back its op­er­a­tions has been at­trib­uted to a mis­un­der­stand­ing over the past few years of the con­ti­nent’s chang­ing con­sumer base. It is seen to have chased the mid­dle class while ne­glect­ing the low-in­come con­sumer that was al­ways its ma­jor cus­tomer base.

In con­trast, Unilever has ad­justed its strat­egy to take into ac­count lo­cal needs, re­sult­ing in dou­ble-digit growth on the con­ti­nent over the past decade. It has cre­ated af­ford­able food, water-thrifty laun­dry de­ter­gents and groom­ing prod­ucts to fit lo­cal tastes, such as a line of black hair prod­ucts in South Africa, which pre­vi­ously re­lied on ex­pen­sive US im­ports. It has also wisely pack­aged their prod­ucts in smaller sizes and at low prices to cap­ture the loy­alty of lower in­come cus­tomers.

Gap en­tered the South African mar­ket in 2012, while Wal­mart pur­chased a ma­jor­ity share in lo­cal re­tailer Mass­mart some years

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.