Mauritius has the lowest supply chain risk in Africa, while Mauritania, Egypt and Algeria have the highest risk. This is according to the annual FM Global Resilience Index, a global ranking of countries’ business resilience to supply chain disruptions. The Index points out that supply chain risk can create uncertainty, business volatility and ultimately impact business performance. Common threats to resilience include lower oil prices, natural disasters and the spread of terrorism. Mauritius is ranked 37th in the world in terms of supply chain risk and number one in Africa. It is followed by South Africa (42nd) and Namibia (44th). The highest risk African countries are Algeria (ranked 123rd in the world), Egypt (124th) and Mauritania (126th). They have been impacted by terrorism threats and lower oil prices. According to FM Global, countries that are less exposed to the dynamics of the oil market are at lower risk. Nigeria dropped in the index to 116th in the world as a result of its exposure to oil and increased terrorism risk, while Ivory Coast dropped to 58th due to the threat of terrorism. Malawi (ranked 84th) was one of the two biggest risers in the Index as a result of what FM Global calls ‘increased resilience to oil shock’. The country with the lowest supply chain risk in the world is Switzerland, while the highest risk is Venezuela in South America.
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Despite the massive uptake by consumers of mobile-based money transfer services in many parts of Africa – Kenya’s M-Pesa has been particularly popular in its home market with 11-million users and is also common in Tanzania and Uganda, for example – in South Africa it has again failed to take off. Cellular service provider Vodacom announced on Monday that it is to shut down its M-Pesa product in SA at the end of June due to lack of demand. “Vodacom is fully committed to mitigating any inconvenience to customers impacted by the decision and assures all M-Pesa South Africa customers that their funds remain safe and readily accessible,” said Vodacom CEO Shameel Joosub in a statement. The company’s M-Pesa services in countries such as Tanzania, Lesotho and Mozambique remain unaffected. When Vodacom first launched M-Pesa in South Africa in 2010, it had hopes of attracting up to 10-million users. However, its 2015 annual report put the figure at under 80 000 customers. Speaking to the website ‘Fin 24’, technology consultant Arthur Goldstuck said Vodacom should never have launched M-Pesa in South Africa in the first place. “Since the day of the launch … I've questioned the viability of it in this country because of the fact that the success factors for M-Pesa in Kenya were not present in South Africa. “You could create demand but there wasn't a pressing need, in particular, the fact that we have such a high banked population,” he said. Interviewed by website ‘IT Web’, technology researcher Jon Tullett agreed. “We don't have the same economic drivers here as in Kenya. The demographics just aren't the same and SA does not have the same challenges getting banking to the people.”
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Cape Town is consistently voted one of the world’s top tourist cities. But as winter approaches and visitor number dwindle, local tourism marketers are attempting to position it as a year-round destination rather than being appealing only in the summer months. One of the key elements of the marketing strategy is to emphasise the value for money that foreign visitors can get due to the weakened value of the rand versus international currencies. Another is to ‘sell’ the benefits of the cooler winter weather to people in extremely hot places such as the Middle East. In addition, the 13 tourist resorts controlled by the City of Cape Town are offering lower rates that are being touted as affordable family getaways for South Africans. “Seasonality remains one the sector’s biggest challenges as the Mother City is perceived as undesirable to visit in winter because its weather during this time of the year is rainy, cold and windy,” ‘Business Day’ newspaper reported last week. It quotes Enver Duminy, CEO of Cape Town Tourism, as saying that, with benefits such as special offers on accommodation and restaurant prices, winter can provide ‘fantastic value’, especially with the exchange rate. “For example, the ... British Post Office Holiday Money report 2016 stated that prices in Cape Town are down 20%, one of only two long-haul destinations to make the [report’s] leading 10 destinations,” he said.
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Despite a number of slowing economies in Africa, the scramble to develop new hotels appears to continue unabated – which is good news for business and leisure travel to the continent. The giant Marriott International chain confirmed last week that it plans to expand into seven new African countries between now and 2025. These are Gabon, Rwanda, Tunisia, Benin, Kenya, Libya and Mauritius. Marriot’s push for more African properties is part of a growth strategy that also includes the Middle East. “We have ambitious plans for growth internationally, and the Middle East and Africa will play a large role in helping us achieve both our short-term and long-term targets,” said Alex Kyriakidis, President and Managing Director for Middle East and Africa while attending an industry event in Dubai in late April. “We feel that where there is change, there is also opportunity. What will determine success within the hotel and hospitality industry is the ability to capitalise on that change, identify the opportunities and be nimble enough to leverage them.” The chain said its development strategy would also mean higher employment levels and it expects to employ 21 000 people within the Middle East-North Africa region by 2018. Marriott already has a strong presence in Africa and in 2014 it paid nearly US$190-million to acquire the South African-based Protea hotel chain. Apart from SA, Protea also operates in markets such as Malawi, Namibia, Nigeria, Tanzania, Uganda and Zambia. Last month the annual Hotel Chain Development Pipeline Survey reported that hotel development in Africa had increased by almost 30% in the past year and would bring the total number of hotel rooms available on the continent to 64 000 – up from the 49 000 rooms available in 2015.
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Wednesday, 04 May 2016 08:59

The enchanting African doll on a mission

Entrepreneur Maite Makgoba is hoping that her popular ethnic doll range, Momppy Mpoppy, will make increasing inroads in her home market of South Africa and across the continent. Already stocked by a number of smaller retailers, the aim now is to get the toy into the bigger retail chains with a national and pan-African reach. Inspired by Nigeria’s homegrown ethnic doll range Queens of Africa (which outsells the iconic Barbie brand in that country), Makgoba told ‘Strategic Marketing Africa’, the magazine of the African Marketing Confederation, in a recent interview that ethnic dolls will not sell simply because they represent diversity. “Dolls are toys, after all, so they need some sort of sparkle or magic which brings an element of play. This is the ingredient which [many] previous ethnic dolls have missed. That is why Barbie has been so successful for so long; she represents this enchanted world and she allows little girls to see the beauty in everything.” The Momppy Mpoppy range already comprises several different versions of the doll. “Our idea was to start out by selling our dolls in independent stores, so when we approached the larger toy retailers they would have no excuse not to stock Momppy. We want to encourage them to give local companies and local toys a chance,” Makgoba told the magazine. A strategy is also in place to extend the brand. “We want to be a kiddies’ lifestyle brand as well as an entertainment brand,” she said. “We have already created a children’s clothing range which is sewn in-house. So whatever the doll wears, the child can wear. Now parents are asking for themed parties too.”
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A new study indicates that, despite the massive uptake in mobile usage in Kenya, there is still significant scope for growth in the market, particularly in the retail environment. The Kenyan Retailers and Technology Study by research company Nielsen utilised face-to-face interviews to gauge the technology adoption rates of 300 retailers and found that it remains dominated by in-store cash transactions (96% of customers) and that 88% of retailers still rely on face-to-face interaction to inform clients about new products. The mobile channel seems hugely underutilised, with mobile money being used by only 12% of customers. Similarly, only 3% of retailers use SMS to inform customers about new products and 1% use WhatsApp. “In a country with 96% mobile penetration, the findings are somewhat surprising, but they do point to enormous potential for growth,” says Nielsen East Africa MD Jacqueline Nyanjom. This is also despite the popularity of the country’s mobile money market, which is dominated by Safaricom’s M-Pesa and has more than 25-million subscribers and nearly 130 000 retail agents. Neilsen says 95% of Kenyan consumers still pay cash at retailers, while 12% make use of mobile money and just 2% use credit or debit cards. “In the Kenyan retail environment, cash remains king,” says Nyanjom, adding that M-Pesa is used primarily to transfer money from consumer to consumer, as opposed to consumer to retailer. Among retailers, 32% said they didn’t use mobile money because customers didn’t like it, while 25% said they had not been approached to register as a mobile money vendor.
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Ethiopia, one of the continent’s fastest-growing economies, is pushing ahead with its mobile phone-based electronic payment system called M-Birr. The aim is to eventually bring millions of previously unbanked Ethiopians into the banking and financial systems. As the experience of Kenya’s successful M-Pesa service has shown, the benefit for marketers is that mobile money enables consumers to more easily – and safely – pay for a range of products and services that may previously have been unavailable to them, or more difficult to access. According to a report by news agency Agence France-Presse (AFP), M-Birr is already being used by the government to make social security payments to people in rural areas. “The service cuts out cumbersome bureaucracy that previously forced customers to travel long distances and spend time waiting for requests to be processed, sometimes having to return the following day to collect the cash,” notes AFP. “The innovation therefore not only improves the distribution of social security benefits, but also paves the way to opening up a potential market of tens of millions.” The report quotes M-Birr executive, Thierry Artaud, as saying: “It's a way to get people to use bank accounts, to understand what are savings [and] what are interest rates.” Currently only around 150 000 people use M-Birr, but the hope is that many more will sign up over time. Less than 20% of Ethiopians had a bank account in 2014, according to the World Bank.
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Tuesday, 19 April 2016 08:43

Market research breakthrough for Africa

Marketers and market researchers across Africa finally have a commonly accepted measure of socio-economic status that enables them to determine consumer wealth at an individual or household level. This will help to solve one of the continent’s long-standing marketing problems – a lack of relevant and measurable data. According to the latest edition of ‘Strategic Marketing Africa’, the magazine of the African Marketing Confederation, the simple and standardised measure has been developed by a team headed by veteran researcher Neil Higgs of TNS South Africa. Versions of the measure will now be used by the Pan African Marketing Research Organisation (Pamro) and the European Society of Opinion and Market Research (Esomar). Among the challenges faced in developing a continent-wide measure are differing currencies, exchange rates and product parity pricing. Taking account of the varying role played by barter in each African economy is also important. The requirement, therefore, has been for a universal measure that serves as a proxy for how people live their daily lives. Crucially, given the challenges of geography and infrastructure, it must be suitable for mobile-based research studies. The Household and Individual measures now adopted to determine socio-economic status include such factors as whether the home has inside running water or uses water from an external supply such as a well, the type of roofing used on the dwelling, whether the home is a permanent or temporary structure, its access to electricity, availability of television and Internet services, frequency of mobile phone usage, access to a post office, and education levels. “These measures help marketers and communicators understand how people actually live at either a household or area level, as well as understand their access to wider horizons through the use of technology and transport,” writes Higgs in the magazine.
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Hotel development in Africa has increased by almost 30% in the past year and will bring the total number of hotel rooms available on the continent to 64 000 – up from 49 000 rooms available in 2015.This is according to new figures from the annual Hotel Chain Development Pipeline Survey, which is conducted by the W Hospitality Group. The increase is largely down to strong growth in sub-Saharan Africa, which is up 42,1% on 2015 and is significantly outstripping North Africa. The latter achieved only a 7,5% increase in rooms this year. A shake-up in the rankings by country saw Angola, never before listed among the top 10, push Egypt out of second place due to a major deal there signed by French-based Accor Hotels. The deal, signed in July last year, is for 50 hotels and a total of 6 200 rooms. “The evidence from our survey is clear – investors remain confident about the future of the hospitality industry on the continent,” says Trevor Ward, Managing Director of the W Hospitality Group. “Even when pummelled daily by low commodity prices, exchange rate problems, political challenges and poor infrastructure, Africa remains resilient.” According to the survey, the 64 000 rooms across the continent will be available in 365 hotel developments, operated by 36 chains. In 2009 there were only 30 000 hotel rooms available in 144 hotel developments, operated by 19 chains.
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The business of beauty is on the up in Africa, with the continent’s cosmetics and beauty sector showing great scope for growth. Writing in the latest edition of ‘Strategic Marketing Africa’ the quarterly magazine of the African Marketing Confederation (AMC), Marilyn Dutlow Munga of marketing consultancy and research firm Added Value, says the value of the African beauty and cosmetics market is expected to reach a total value of US$10,9-billion by 2017 and has been growing at an annual rate of 8-10%, versus the global beauty industry growth rate of only around 4%. “The opportunity exists because the needs of African women have been largely unmet over the years. But the demand is now there and the cosmetics and beauty industry will need to ensure it keeps pace with growing expectations caused by very positive socio-economic shifts,” says Dutlow Munga. She adds that the World Bank has highlighted that more African women are receiving access to basic education, better employment opportunities and the chance to become entrepreneurs – all factors that drive increased spending power and disposable income. Among the opportunities for marketers in this segment is the steady shift from relaxed (chemically straitened) hair to more natural curly hairstyles. The natural hair care category is, however, very cluttered, which is perhaps indicative of no single product or brand really standing out when it comes to delivering what African women need. Similarly, skin care products that protect dark skin from the African sun are lacking. “There is still demand from black consumers for an adequate sun protection product that does not leave residues on darker skin tones,” she says. According to Dutlow Munga, a local brand that seizes this opportunity and become a market leader across the continent
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