The third edition of the prestigious World Branding Awards saw 210 brands from 30 countries named ‘Brand of the Year’ in a ceremony held at London’s Kensington Palace on Tuesday. Among those honoured were four African brands. South African-based fast-food giant Nando’s was a ‘National Tier’ winner, along with Kenyan telecommunications company Safaricom and Nigerian retailer Spar Park ‘n’ Shop. MTN, the South African mobile communications brand, was chosen as a ‘Regional Winner’. For MTN, the World Branding Awards honour comes hot on the heels of being named as the Most Valuable Brand in South Africa in the Brand Finance awards. Winners of the ‘Global’ brand category included some of the most prominent names in world business: Apple, BMW, the British Council, Cartier, Coca-Cola, Facebook, Google, Lego, L'Oréal, Louis Vuitton, McDonald's, Nescafé, Nike, Oral-B, Pampers, Rolex, Samsung, Starbucks, Schwarzkopf and Visa. The awards are organised by the World Branding Forum, a global non-profit organisation dedicated to advancing branding standards. It organises and sponsors a range of educational programmes. It also publishes branding news on its website that reaches a global audience of over 5 million. Participants are judged through three streams: brand valuation, consumer market research, and public online voting. “Over 120000 consumers from around the world voted for more than 2 800 brands from 35 countries. Winners at the awards have clearly demonstrated their ability to stand out from their competitors,” said Peter Pek, Chief Executive of the Forum.
Published in My Article
Although overall growth in Africa has slowed, the long-term fundamentals are strong and there are big business opportunities ahead. This is according to a new study by the McKinsey Global Institute, the business and economics research arm of consulting firm McKinsey & Company. In its ‘Lions on the Move II: Realising the Potential of Africa’s Economies’ report, the firm predicts that spending on the continent will grow from US$4-trillion in 2015 to US$5,6-trillion by 2025. “Big opportunities lie ahead as consumer and business spending continue to grow,” say the researchers. To back this up, they point to several key trends. Among them is the expectation that household consumption will grow by 3,8% a year to 2025. “Spending on discretionary items is likely to grow fastest, reflecting an expanding African consuming class. Just under half of all consumption growth in the period to 2025 will be in 75 cities,” the study notes. The continent also has an opportunity to nearly double manufacturing output – from US$500-billion today to US$930-billion in 2025. A notable change from previous years is that national economies are no longer about exporting commodities, but about tapping into vibrant domestic demand. Three-quarters of this potential could come from Africa-based companies meeting fast-growing demand within Africa, McKinsey believes. “Our new research shows how, in coming years, Africa will benefit from strong fundamentals including a young and growing population, the world’s fastest urbanisation rate, and accelerating technological change,” says Acha Leke, a co-author of the report. “Thriving in [these] markets will require [companies] to offer products and develop sales forces able to target the relatively fragmented private sector. But what our research also shows is how much work needs to be done – both by companies themselves and by Africa’s governments – to translate opportunity into tangible economic benefits.”
Published in My Article
Urbanisation has become a key trend in Africa, with people increasingly moving to the cities and thereby making it easier for companies to target certain consumer groups. But, cautions the African Consumer and Retail Sector Report 2016 published by professional services firm KPMG, although the demographic make-up of the continent is extremely favourable, success is not guaranteed. Firstly, there are vast differences across countries. North Africa is, for example, far more developed than sub-Saharan Africa, while the retail market opportunities in countries will differ due to variances in consumer tastes, culture, income and demographics. Secondly, says KPMG, it is important to distinguish between opportunities at the national and city level. Data at the national level can often be misleading, as a city’s GDP per capita can vastly exceed the national average due to the greater concentration of wealth in some urban areas. “Finally, simply because a country has favourable demographics does not mean that this will necessarily translate into higher levels of economic growth and consumer spending,” the report notes. An increase in the proportion of the working-age population relative to the total population is potentially beneficial for consumer spending as it frees up resources. But this will not happen if there is a high unemployment rate in the working-age population.” Turning to the outlook for African retail, KPMG says the formalisation of the sector will be a key trend underlying its expansion in the coming decade. At present, most consumers – especially south of the Sahara – remain extremely poor and spend most of their money on food and other necessities. This makes for a promising outlook for FMCG companies, given the large market to cater for. Crucially, an increasing number of consumers are on the cusp of the US$1 000 annual income level, which will allow for the expansion of consumption.”
Published in My Article
Global auto giant Volkswagen has indicated that it sees growing consumer potential in East Africa with the announcement last week of an assembly facility in Kenya that will produce the Polo Vivo small passenger car. When it begins operating in late 2016, it will be the company’s third plant on the continent, as it already has facilities in South Africa and Nigeria. Reuters noted that VW is “looking to sell more vehicles across the East African region” and pointed out that the German company is no stranger to emerging markets. It had, for example, had great success with the Beetle model in Mexico, the news agency reported. Kenya's car market is dominated by imported second-hand models from countries such as Japan, although there is some local assembly of vehicles by various brands. “We believe that Kenya has got the potential to develop a very big fully-fledged automotive industry. The East African Community has got the potential and today is the first step in this direction that we want to take with our passenger cars,” VW’s Thomas Schafer said at the signing of an agreement between the parties involved. “We are taking the successful Polo Vivo from South Africa to Kenya to leverage the enormous growth potential of the African automobile market and participate in its positive development. This compact model is the best-selling car in the sub-Saharan region – so it is the ideal entry model for the promising Kenyan market,” Schäfer commented The Nairobi ceremony was attended by, among others, Kenyan President Uhuru Kenyatta, who said the company’s decision return to the country after 39 years was proof that the government’s initiatives to improve the economy had borne fruit.
Published in My Article
Thursday, 08 September 2016 08:36

Coffee shop chain plans African expansion

Vida e Caffè, the South African-owned coffee shop chain, has announced that it is looking to increase its footprint in other parts of Africa and build on the outlets that it already has in Mauritius, Kenya, Ghana and Namibia. To date it has 17 stores in those countries, with four more planned by the end of 2016. Mauritius and Ghana are proving to be the regions with the best growth opportunities and the most popular non-SA store is in the Mauritian capital of Port Louis. Outlining the Vida vision for further African expansion, Business Development Manager for International and Corporate, Craig Gravett, says the brand has “noted some significant opportunities with partners in Africa that had originally been based in South Africa”. All rest-of-Africa stores are franchises with a joint venture partner or master franchisee. “Understanding that each country and culture is unique is imperative,” says Gravett. “As an example, while coffee is traditionally perceived as a morning thing, in Ghana it’s an evening pastime – with the majority of stores trading to 10pm-11pm.” Referring to the planned expansion into other parts of Africa by giant US-based coffee chain Starbucks, Gravett notes: “[It’s] no secret that our environment is hotting up. But we have been strategically planning ahead for several years and our hard work is really coming to fruition. We have the first-mover advantage in a number of new business development areas.” In June, Starbucks’ founder Howard Schultz predicted the brand would move into other parts of the continent following its successful launch in South Africa in April. “I think Nigeria will be at some point an interesting opportunity for us … “I look at the opportunity here [in Africa], which is really unexploited, to significantly add to the revenue and gross margin of the company.”
Published in My Article
Wednesday, 07 September 2016 09:36

A measurement evolution for out-of-home ads

Lack of credible audience measurement data has long bedevilled the South African out-of-home media industry. Now a new high-tech system could help grow its share of adspend. This is according to the August-September 2016 issue of the ‘IMM Journal of Strategic Marketing’, the magazine of the Institute of Marketing Management (IMM). Unlike print, television and digital publishing, the out-of-home sector has long struggled to provide marketers and their agencies with quantifiable data on impact, reach and other key metrics. Recently the Out of Home Measurement Council unveiled a measurement model which, it says, will change all that. The council is an industry body launched by key players JCDecaux (formerly Continental Outdoor), Primedia Outdoor, Outdoor Network and AdOutpost. The model is called ROAD (for Roadside Outdoor Audience Data) and aims to put out-of-home on an equal footing with other forms of media when it comes to audience metrics. The methodology was designed by specialist Spanish-based research company Cuende Infometrics. “For every billboard and campaign, users will know audience metrics, profiles and demographics. So they can analyse reach, frequency, duplication, impacts and cost-per-thousand,” says company founder Daniel Cuende. “Our research covers all OOH formats that can be geo-positioned on a digital map – including billboards, bus shelters, taxi ranks and urban furniture.” The system uses satellite data to provide real-time information on human movement patterns around outdoor advertising sites. Interestingly, the model does not necessarily equate passing traffic with advertising contact; instead, it factors in ‘zones of visibility’ and takes account of obstructions, orientation, size of the outdoor advertisement, and even other points of interest in the area. This data is combined with localised research data that was compiled during a 12-month survey involving more than 15 000 adults. The survey is to be conducted annually in future.
Published in My Article
Tuesday, 06 September 2016 09:41

Uber brand extension has lift-off in Kenya

Uber, the ride-hailing taxi app that has become a major market innovator and disruptor in various parts of Africa, has now taken its brand extension strategy a step further and is offering helicopter ‘taxi’ services in the Kenyan centres of Nairobi and Mombasa. Known as UberChopper, it is already available in the South African city of Cape Town as well as international destinations such as New York, Los Angeles, Bangkok, Melbourne and Hong Kong. In Kenya the service is being marketed as a way to transport business clients and busy executives between destinations without having to deal with traffic congestion. It is offered in partnership with Corporate Helicopters, a well-established Nairobi-based charter service. The Kenyan launch took place on Sunday (September 4), with local media reporting that the launch strategy involved the use of celebrities such as Tima Keilah, the current Miss Global Kenya, TV celebrity chef, Chef Ali, and Mombasa-based deejay, DJ Lenium. There was also a social media competition in which members of the public could win helicopter flips. While Uber is best-known as a ride-hailing taxi app for the general public, it already operates a number of brand extensions apart from UberChopper. There is an UberBike service in the Dutch city of Amsterdam, for example, and UberSki in the US snow resort town of Lake Tahoe. In a recent interview with ‘Strategic Marketing Africa’, the magazine of the African Marketing Confederation (AMC), General Manager for Uber in sub-Saharan Africa, Alon Lits, noted: “We use a non-conventional approach to marketing and find this to be most effective. On-demand services such as UberYacht and UberChopper – products that enable customers to use the app to order yachts and helicopters – create a buzz around the brand, as do frequent strategic partnerships with other businesses.”
Published in My Article
Friday, 02 September 2016 07:22

Largest shopping mall in Lagos opens its doors

Lagos’ newest and largest shopping mall is open for business. The 22 000 sq. m development in the upmarket and rapidly growing residential/business area around Lekki was declared open by State Governor Akinwunmi Ambode last week. Built at a cost of almost US$1-billion, the Novare Lekki Mall has around 100 shops, with Shoprite and Game stores as the anchor tenants. Other retail tenants include Nike, Adidas, Levi Strauss, MTN, Swatch, HealthPlus and Spur. Retail occupancy already stood at around 80% prior to opening. The project, which the developers say came in on time and within budget, also includes five cinemas, family recreation areas, outdoor games and parking for 1 000 cars . “Novare Lekki Mall incorporates the latest elements in modern shopping centre design and aims to provide visitors with state-of-the-art facilities in a user-friendly, safe and pleasant environment,” says Jan van Zyl, Head of Property Development at Novare Equity Partners. Novare is involved in a number of retail and office developments in Africa, including Zambia and Mozambique.
Published in My Article
Despite a particularly tough economy, Nigerian consumers are more optimistic than many of their peers in sub-Saharan Africa. Consumer confidence in the West African nation rose by two points in the second quarter of 2016, according to figures released by research company Nielsen yesterday (Tuesday). Overall, consumers in three out of the four nations in the regional survey (Nigeria, Kenya and South Africa) were more optimistic than earlier in the year. However, Ghana’s confidence score was unchanged for the third consecutive quarter. In Nigeria, immediate-spending intentions jumped substantially, but personal finance sentiment and the job prospect outlook were similar to the first quarter. In Ghana, job prospect sentiment decreased notably, personal finance sentiment dropped slightly, and immediate-spending intentions rose slightly. “The majority of consumers in Ghana and Nigeria said they did not have spare cash (66% in Ghana and 51% in Nigeria),” says the study. “Among those who claimed discretionary funds, saving continued to be a priority for [most people], who plan to put money into savings accounts. This shows there is a continued focus on long-term financial savings – perhaps a reflection of the current cautionary outlook amidst turbulent economic conditions.” Kenya has one of the highest economic growth rates in Africa – 5,6% – and is boosted by its economy being less reliant on low-performing commodities. Inflation is also well contained relative to other countries in the region. Unsurprisingly, all three all three confidence indicators continued to increase in the second quarter: Job prospect sentiment rose notably, personal finance sentiment increased slightly, and immediate spending intentions also improved, with a greater number of people saying they had spare cash. “Among those who did claim discretionary funds, saving continued to be a priority for 82% of Kenyans, followed by home improvements/decorating (75%) and investing in shares (68%),” says Nielsen.
Published in My Article
Econet Wireless, the mid-size African mobile network, is to pre-install ad blocking capability for approximately 40-million subscribers across Zimbabwe, South Africa, Burundi and Lesotho. Econet and its technology supplier – Israeli-based Shine Technologies – said in a media statement last week that this would be the first network-level ad blocking on the continent. While individual smartphone users can download their own ad blockers, it is still uncommon for mobile networks to supply this to all customers, although a network in the Caribbean and another in Europe already do so. According to Econet Zimbabwe CEO Douglas Mboweni, the deal will help customers save on their data costs. “We are delighted that we have taken the lead in ensuring that customers have control of unsolicited ads,” he said. “This will lead to quicker-loading and cleaner-looking Web pages free from advertisements, [as well as] lower resource waste in terms of bandwidth and memory. This goes a long way in solving the issue of ‘bill shock’ resulting from unsolicited adverts. In addition there are privacy benefits gained through the exclusion of the tracking and profiling systems of ad-delivery platforms.” Ron Porat, Shine CEO, added: “[Advertising technology] abuse is a global phenomenon and, in Africa in particular, it is devastating to consumers’ limited data plans.” Under the terms of the agreement the first roll-out will take place in Zimbabwe, with ad blocking coverage turned on automatically for all subscribers. All remaining Econet Group regions – South Africa, Burundi and Lesotho – will follow. “The deals come as the growing worldwide popularity of ad blockers has locked the media and advertising industries in a heated battle with the makers of the software that drains their revenue,” noted ‘Mashable’ the US-based digital media website. It called Shine Technologies “a long-time tormenter of the ad industry”.
Published in My Article