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Understanding African consumers is key for brand success in this diverse continent

on Monday August 13, 2012 @ 1:26

According to The Economist, over the past 10 years, six of the 10 fastest-growing economies were in Sub-Saharan Africa, fuelled by the emergence of the middle class and in the next five years, seven Sub-Saharan economies are expected to make the list. Truly, the next decade belongs to Africa.

African market

Growth is expected to continue in all areas:

  • Africa's collective GDP will increase from $1.6 trillion to $2.6 trillion by 2020. Over the same period, consumer spending will grow from $860 billion to $1.4 trillion
  • Agricultural output will increase from $280 billion today to $880 billion by 2030
  • The number of Africans of working age will exceed 1 billion by 2040, when the continent will be home to one in five of the planet's young people and its labour force will be the largest in the world, topping both China and India
  • On average, African workers are currently half the cost of their counterparts
  • Getting a foothold in Africa: Does one shoe fit all?

    It is imperative that companies recognise that Africa isn't one economy or homogenous population block. It is a conglomerate of 53 countries which, more often than not, don't share policies and attitudes, and have evolved differently through their social and economic pasts.

    Successful brands on the continent

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    The African market is dynamic and evolving, with many global brands represented, and a homegrown market for locally manufactured products. Africa's top advertisers include MTN, Globacom, Airtel, Guiness Stout and Coca-Cola, and Nokia.

    Africa's main challenges lie in its enormous size and diversity. A thorough understanding of local cultures, beliefs, customs, economics, and practices is required to be successful. Companies and practitioners that have followed globalized assumptions and methods have failed to make an impact. A key factor for success is having marketing operations headed by locals who understand and connect with what consumers need.

    For African brands to break through, they must build brands underpinned by local insights that motivate African consumers while delivering on a global standard. A great example is Pay-As-You-Go, Africa's first prepaid airtime service. Initially mobile networks had contract-based services geared towards the wealthy, but on a continent where formal employment is rare, mobile telephony was for the elite. Pay-As-You-go changed this, and the mobile telcos have never looked back.

    Africas mobile phone industry booming 1

    Where the continent is headed

    Global companies are including Africa in their growth strategies as consumer demand in more mature markets struggle post the global recession, and the growth of the African continent is driven as much by commodities and technology as it is by improving governance and the spread of democracy. And economic change has made life more rewarding for Africans themselves. The continent is truly opened for business!

    This report was published by Warc – the online publication for marketing strategy that combines current new thinking and trends with best practice.

    Get in touch for more information on this report.

    Photos: naylandhouse, Tielman Nieuwoudt

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