Is the sometimes breathless discussion around ‘Africa rising’ an accurate evaluation of what is happening on the continent, or unrealistic and over-hyped? A report released last month by global business consultancy EY (formerly Ernst & Young) says that while there is caution, there is also irrefutable evidence of progress.

The ‘Africa 2030: Realising the possibilities’ report reinforces “the tremendous progress that has been made in Africa over the past 15 years”, says Ajen Sita, CEO of the company’s Africa operations. “Africa’s rise over the past decade has been very real. While there are still a number of sceptics, we have developed a robust data and knowledge base to help provide quantitative substance to support the business case for Africa; the evidence of clear progress is irrefutable.”

Published in My Article

With growth that’s been widely described as ‘explosive’, the tablet market in Africa is brimming with potential. Although global tablet market growth declined by 35,7% in the first quarter of 2014, African sales soared with a 77,3% year-on-year increase in the same period, according figures released by International Data Corporation, a technology consultancy.

With Western economies being seen as saturated, and market growth for tablets in the developed world steadily declining each year, there seems little doubt that tablet marketers see consumers in emerging economies as key to future sales growth.

Published in My Article

The investment is large and the potential returns can’t be easily quantified when brands throw their weight behind soccer teams and tournaments. Yet companies are increasingly looking to leverage off Africa’s passion for soccer to grow their brands.

In June, the African Marketing Confederation (AMC) website unpacked new research out of the US by the global McKinsey consultancy, which noted that about one-third to half of companies don’t have a system in place to comprehensively measure sponsorship ROI, whether for sporting or other events (‘Is sponsorship really worth it?’ 16 June 2014). Nevertheless, it seems brands continue to give credence to sponsorship’s impact.

Published in My Article

Despite a challenging time in Africa recently, UK-based Diageo – the world's largest producer of spirits and a major producer of beer and wine – is continuing to target the continent for expansion. It has commenced new advertising campaigns for Guinness beer and Smirnoff Ice, two of its key brands in Africa, and has strategic developments underway in Angola and Mozambique.

Although sales of its Guinness beer brand (in Nigeria) and Senator beer brand (in Kenya) showed declines when Diageo announced its annual results for the 12 months ending 30 June 2014, the company remains bullish about longer-term prospects, CEO Ivan Menezes told investors.

Published in My Article
Wednesday, 01 October 2014 22:00

Understanding the rural consumer

While sub-Saharan Africa’s rural consumers continue to form a large part of the overall population, it is a segment often overlooked by marketers – many of whom are unsure of how to access this audience, or prefer to focus their attention on the continent’s other big story: urbanisation.

According to 2013 estimates from the World Bank, the rural population makes up 63% of sub-Saharan Africa, while in the Middle East and North Africa (known as MENA) this segment accounts for 40%. With greater digital connectivity and increasingly empowered rural influencers impacting the mind-set and choices of this segment, the largely untapped rural consumer market in Africa could yield significant dividends.

Now a recent study conducted in India, which is also a strongly rural (about 70% according to the 2011 census) and emerging consumer market, may provide insights applicable to the African environment.

The Nielsen research survey of 2 000 opinion leaders in India’s countryside suggests that the face of the rural consumer has changed, with opinion leaders no longer necessarily village elders or fellow farm workers. Instead, many are retailers, doctors and teachers who offer advice on purchasing decisions. In addition, younger community members who are economically empowered and have greater access to knowledge and information – thanks to their growing uptake of mobile and digital channels – are gaining respect within rural communities.

Billed as ‘rural super consumers’, these opinion leaders are the key to tapping into rural markets. “This consumer will lead others to your brand if you manage to capture his imagination and disposable income,” said Ritesh Sahu, a Director at Nielsen India.

The parameters of [measuring rural] success have changed,” agreed Ashish Bhasin, Chairman and CEO: South Asia at Dentsu Aegis Network, a multinational media and digital marketing communications firm, speaking to India’s ‘Economic Times’ newspaper.

One way of capturing the rural consumer’s imagination is through focused innovation. For example, last month South Korean electronics giant Samsung unveiled a new television set that runs off both AD and DC power supply, allowing for uninterrupted viewing even if power supplies are unreliable. The product, reported business website ‘Ventures Africa’, was being targeted at rural consumers in Kenya.

Samsung’s strategy highlights the infrastructure challenges which impact rural consumers and how products and services can be adapted to cater to these needs.

Another link between the Indian research and the African experience is the impact of access to mobile and digital technologies which, by association, increases access to information and brand messaging; allowing marketers to speak directly to rural consumers.

According to Euromonitor International, many countries are also working to provide rural communities with access to, and understanding of, technology. For example, the North African nation of Algeria recently rolled out a project where one million rural consumers were provided with training in communication and information technologies.Rural citizens, who are empowered through such programmes and resultant Internet access, naturally also become thought leaders who influence their communities, much like the picture painted by Nielsen India. This access allows marketers new and more effective avenues to access the massive rural consumer base.

It seems corporates are becoming more aware of the rural opportunities on offer. For example, panellists from several major African companies at a 2013 Ernst & Young Strategic Growth Forum in Cape Town delved into the potential of rural markets. According to the website ‘How We Made It In Africa’, Kofi Amegashie, Managing Executive for Africa at pharmaceutical firm Adcock Ingram, warned of the dangers of ignoring rural consumers on the continent and suggested adjusting packaging and distribution strategies in such regions, especially in the FMCG space.

Mncane Mthunzi, an Executive Director at South African retailer Massmart, also discussed the aspirational tendencies of rural consumers who, he said, develop high levels of brand loyalty. “We assume that if people are in rural areas and townships we must give them private label goods or house brands [but] the opposite is actually true… Consumers at the low end of the food chain … aspire to be at the top end and they want to do exactly what people at the top end do,” he said.

Published in My Article

Data scientists at IBM, the US technology and consulting group, estimate that in 2012 some 2,5-quintillion (2,5 followed by 18 zeros) bytes of data were created every day and that 90% of the world’s data was produced in the past two years alone.

But IBM says only 40% of businesses in Nigeria and Kenya, for example, are in the planning stages of a Big Data project, compared to a global average of 51%. However, Africa is not alone is battling issues of training, adoption and understanding the uses to which this mass of data can be put in a marketing environment. According to online marketing news site ‘Warc’, quoting a recent Australian survey by the Association of Data Driven Marketing and Advertising (ADMA), 82% of Chief Marketing Officers in Australia feel ‘overwhelmed’ by customer data and are ill-equipped to interpret it – up 10% from five years ago.

Published in My Article
Page 16 of 16