Watches have become the new status symbol of choice among male African millionaires, according to a study published by research company New World Wealth. ‘Watches have become to men what diamonds are to women’, say the study’s authors, quoting an unnamed African retailer. “Over the past 10 years the global men’s super-luxury watch industry has grown by more than five times in terms of revenue, whilst in Africa it has grown by even more,” notes New World Wealth. Overall, the most sought-after watch brand among African men is Patek Philippe. It is followed by Franck Muller, Audemars Piguet, Breguet and Vacheron Constantin. All are Swiss brands with a heritage dating back 150 years or more. The study lists several reasons for the rapid growth of the watch segment among wealthy African males: • Watches have become a status symbol for men. • They can be bought with cash without arousing suspicion, as opposed to cars, yachts and property purchases, which may have tax implications. • Top-end watches hold their value reasonably well over time and can be a great investment, much like art or classic cars. • Portability. For instance, a wealthy Angolan individual can buy a watch in the UK and easily transport it back to Angola. This would not be the case for a car. • Watches are the only notable form of male jewellery. • Watch collecting has become a prominent pastime for many wealthy men globally. Referring to the worldwide rise of the super-luxury watchmakers that have superseded brands such as Rolex, Omega and Tag, the study notes: “These specialist watchmakers only make handmade [pieces], which start from a base price of around US$10 000. They are mechanical (either self-winding or manual winding), as opposed to modern battery-operated watches. Most of them have a long history in watchmaking, which dates back to the 1 700s in some cases. “Their value comes not so much from the materials used to make them, but rather in the precision, expertise and time taken to individually construct each watch. Amazingly, one watch can take a specialist watchmaker over a year to [create].”
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Wednesday, 18 November 2015 10:15

Nigeria’s auto industry set for take off?

Nigeria could become a leading African automotive hub by 2050, with increased local vehicle manufacturing and assembly to meet demand for as many as 7,6-million new vehicles annually. This is according to a study by management consultancy PricewaterhouseCoopers (PwC), which bases these figures on an optimistic growth scenario for Africa’s largest economy. In 2014, cars assembled in Nigeria accounted for only 15% of total car sales, but that figure could rise to 70% by 2050, PwC says, while acknowledging that Nigeria is ‘still very far away from such ambitious targets’. Currently around 90 000 news cars and 335 000 used cars are being imported annually, with a further 30 000 new units assembled locally. “It has been identified by the Director General of Nigeria’s National Automotive Council that the new car market has a potential of one million new car sales annually. Proper implementation of the National Automotive Industrial Development Plan (NAIDP) could see Nigeria achieve this potential as early as year 2032, potentially exceeding 7-million [sales] by 2050,” the study says. PwC believes vehicle manufacturers willing to tap into the Nigerian market would have to begin some sort of local assembly or lose out. “Currently top brands have realised that taking advantage of the [NAIDP] policy is the best strategy to assert their position in the market. Nissan, Kia and Hyundai have begun assembling in the country with Ford, Honda and Tata initiating plans to begin assembly,” notes the study, which was released in October. However, there are challenges that would need to be resolved before this optimistic scenario can be realised. Tightening Nigeria’s border controls to prevent cars being smuggled into the country is important. So too is making credit available to consumers to buy vehicles. “One of the biggest barriers is lack of credit. Most of the economies do not sell cars [on] a cash basis; they buy through borrowing, [which needs] to be addressed in Nigeria,” Andrew Nevin, Partner: Africa Strategy and Operations at PwC Nigeria, is quoted as saying by the news website ‘Quartz Africa’.
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Despite multinational corporations making greater investments and growing their businesses in Africa in recent years, they are starting to lose market share to local companies which are increasingly capable, know the local markets better, and are more focused. This is one of the key findings of a study entitled ‘Duelling with Lions’ released last week by the Boston Consulting Group. “For most multinationals, early results in Africa have been mixed at best,” note the study’s authors. “European and North American companies in a variety of industries are earning a higher percentage of their global revenue on the continent than they ever have. But the numbers are still small. And by another, perhaps more telling, measure – African market share – many of those companies are going backward.” What the big corporates are facing in Africa is similar to what they’ve faced in parts of Asia and Latin America: an increasingly capable set of local competitors that management at the multinationals may have been largely unaware of as a threat. “The entity looking to eat your lunch in Africa is one that your board of directors – and maybe you yourself – didn’t know existed until recently,” notes Boston. Among the difficulties for multinational corporations in Africa is that, by their nature, they are competing in a large number of markets and are therefore unable to properly focus on the unique challenges of the continent. “There are simply too many attractive market opportunities around the globe,” the study quotes one respondent as saying. “Multinationals are therefore spreading themselves thinner while locals, for the most part, are very focused.” Boston says that among the African businesses which have successful taken on the multinationals are telecommunications giant MTN (South Africa), banking groups Attijariwafa, BMCE and Banque Populaire (all Morocco), edible oils company Bidco (Kenya) and soft drink company Refriango (Angola).
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While South African retailers continue to dominate the African retail scene and occupy the top spots in the first ‘African Powers of Retailing’ report published by management consultancy Deloitte, retail chains from other parts of the continent are beginning to make inroads. Botswana-based Choppies, for example, was the fastest-growing retailer of the top 25 African retailers of 2015, recording 24.4% year-on-year growth. Reflecting the diversity of the retail phenomenon in Africa, it was followed by Zambia’s Zambeef, with 23% year-on-year growth. Société Magasin Général, a retailer from Tunisia, recorded growth of 11.3%. In all, the list of the top 25 retailers in Africa includes three Zimbabwean retailers, two from Botswana, and one each from Kenya, Morocco, Tunisia, Nigeria and Zambia. The biggest retailer listed from outside South Africa was Moroccan general merchandiser Label’Vie SA. “The potential inherent in the Africa market is underscored by the fact that, according to the United Nations Economic Commission for Africa, the African retail market remains characterised by approximately 90% of transactions occurring through informal channels, peaking at 96% to 98% in key West African markets such as Ghana, Nigeria and Cameroon. This compares to just 40% in South Africa, as the continent’s most mature retail market,” says Deloitte. Food and beverage accounted for 52.5% of total retail sales of the top 25 retailers. It was also the fastest-growing retail sector, with 12.9% compound annual revenue growth. Clothing and accessories was the second fastest-growing sector with annual revenue growth of 10.2%. The top five retailers in Africa by revenue are: 1. Shoprite Holdings (South Africa) 2. Massmart Holdings (South Africa) 3. Pick n Pay Stores (South Africa) 4. The Spar Group (South Africa) 5. Woolworths Holdings (South Africa) Ends
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How big is Africa’s middle class really? According to several recent studies and media articles, it is probably much smaller than originally believed – which should worry many marketers, who rely on more affluent consumers in this segment to drive demand for products and services. Quoting from a study published in October by Swiss banking group Credit Suisse, the New York-based online publication ‘Quartz’ says that only 3.3% of Africans should be considered middle class, which equates to about 19-million people. “That’s a far cry from previous estimates from the African Development Bank, based on income, that put the figure closer to 300 million in 2011,” it notes. Credit Suisse’s researchers set the equivalent of US$50 000 in the US as the threshold for a person’s wealth to classify them as middle class. That translates to about US$22 000 in South Africa, where almost a quarter of the continent’s middle class live. Nigeria, the continent’s largest economy, is home to 922 000 middle-class adults. “The argument for looking at wealth instead of income is based on the idea that wages alone do not measure a household’s financial security and resilience to shocks like losing a job,” ‘Quartz’ says. An October article by the respected London-based ‘The Economist’ agrees that the middle class may be smaller than originally expected. “Good data on the exact size of the middle class are hard to come by, but it remains small across most parts of the continent,” it says. “The Pew Research Centre, an American outfit, reckons that just 6% of Africans qualify as middle class, which it defines as those earning US$10-US$20 a day. On this measure the number of middle-income earners in Africa barely changed in the decade to 2011.”
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Multi-layered delegate packages for the first African marketing conference, being held at the Indaba Hotel in Johannesburg from 4-6 November, are now available. The keynote speaker is Professor Malcolm McDonald, one of the world’s foremost authorities on strategic marketing, market segmentation, sales and strategic/key account management. He has written over 45 books on the subject of marketing and, until recently, was Professor of Marketing and Deputy Director at the Cranfield University School of Management in the UK. At his half-day conference session on 5 November he will address two crucial issues facing marketers: ‘How to develop a winning marketing strategy to grow sales and profits’; and ‘How to manage big powerful customers profitably’. These are particularly pertinent in an African context as the continent begins to attract foreign direct investment by large corporates looking to explore new marketing opportunities. Other speakers include: Dr Shingi Munyeza, the former CEO of African Sun Hotels; Busisa Moyo, CEO of United Refineries Ltd and President of the Confederation of Zimbabwe Industries; Edna Mukurazhizha, Managing Director of BancEASY, and Helen McIntee, Director of the Institute of Marketing Management (IMM). Delegates’ attendance options are: • One half-day conference package (5 November ) with Professor McDonald for R2 000 including lunch; • One-and-half day conference package for R5 500; • Three full days at R9 000 (inclusive of Marketers Association of Zimbabwe awards banquet). To secure your attendance contact Loreen Alutah Chari (Zimbabwe) by email: This email address is being protected from spambots. You need JavaScript enabled to view it., or telephone +2634747031. Alternatively, contact Catherine Larkin from CVLC (South Africa) on +2711789-7327 / +27833000331, or email her at This email address is being protected from spambots. You need JavaScript enabled to view it.
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Thursday, 29 October 2015 07:38

MTN is most admired brand in Africa

Telecommunications giant MTN was the big winner at the 4th annual ‘Brand Africa 100: Africa’s Best Brands’ awards held last week. The awards aim to identify local and global brands that are the most valuable and the most admired by African consumers. MTN came in as the most admired brand overall, beating competition from the likes of Samsung (2nd), Coca-Cola (3rd) and Nike (4th). It was also the most admired of the home-grown African brands, beating GLO/Globacom of Nigeria (2nd), Dangote of Nigeria (3rd) and Tusker of Kenya (4th). The most admired regional brands were Coca-cola (East Africa), Adidas (West Africa), Nike (North Africa), Samsung (Central Africa) and Nike (Southern Africa). Non-African brands took 77% of the Top 100 brands, with local African brands comprising the remaining 23%. The most admired brands came from United States (21%), Nigeria (11%), UK (9%), Japan (8%), France (6%), Netherlands (5%), Germany (4%), Italy (4%), South Africa (4%) and Kenya (4%). “These rankings are increasingly significant as they are an important metric of the progress Africa is making in creating brands and services that respond to African conditions, needs and ambitions,” said Thebe Ikalafeng, Founder and Chairman of Brand Africa and Chairman of Brand Finance Africa. “Simultaneously, they are a reflection and celebration of both non-African and African brands that meet the African consumer standard.” The poll covered consumers in 22 African countries which collectively account for 77% of the continent’s GDP. It also covered all eight regional economic zones on the continent. Top five most admired brands in Africa: #1 MTN (South Africa) #2 Samsung #3 Coca Cola #4 Nike #5 Adidas Top five most admired home-grown African brands: #1 MTN (South Africa) #2 GLO/Globacom (Nigeria) #3 Dangote (Nigeria) #4 Tusker (Kenya) #5 Mukwano (Uganda)
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Could unmanned commercial drones be the answer to one of the biggest challenges facing marketers on the African continent – that of supply chain and logistics difficulties? Rwanda in East Africa is scheduled to be the base for a network of ‘droneports’ that will initially be used to deliver urgent medical and related supplies to remote areas. But the longer-term strategy calls for a separate drone service that will deliver e-commerce and other goods as a way to subsidise the humanitarian operation. The plan has been unveiled by Forster + Partners, a London-based architectural firm, in conjunction with Afrotech, an African-based technology project by a Swiss university. Construction of the first droneport – a small ‘airport’ for the unmanned craft – could begin in Rwanda in the second half of next year and the plan is to have three droneports by 2020. The project will then expand to other countries, among them the neighbouring Democratic Republic of Congo. According to a report by news agency Bloomberg, “the droneport project plans an urban service for commercial deliveries, such as e-commerce goods, that will be known as the Blue Line. It will subsidise a separate Red Line network ferrying medical and emergency supplies to remote regions at minimal cost”. In a press statement, Foster + Partners says cargo drone routes have utility wherever there is a lack of roads. “Just as mobile phones dispensed with landlines, cargo drones can transcend geographical barriers such as mountains, lakes and unnavigable rivers without the need for large-scale physical infrastructure,” the company notes. “Just a third of Africans live within two kilometres of an all-season road, and there are no continental motorways, almost no tunnels, and not enough bridges that can reach people living in far-flung areas of the continent. An ‘infrastructural leap’ is essential using drone technology and clean energy systems to surmount the challenges of the future.”
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Could unmanned commercial drones be the answer to one of the biggest challenges facing marketers on the African continent – that of supply chain and logistics difficulties? Rwanda in East Africa is scheduled to be the base for a network of ‘droneports’ that will initially be used to deliver urgent medical and related supplies to remote areas. But the longer-term strategy calls for a separate drone service that will deliver e-commerce and other goods as a way to subsidise the humanitarian operation. The plan has been unveiled by Forster + Partners, a London-based architectural firm, in conjunction with Afrotech, an African-based technology project by a Swiss university. Construction of the first droneport – a small ‘airport’ for the unmanned craft – could begin in Rwanda in the second half of next year and the plan is to have three droneports by 2020. The project will then expand to other countries, among them the neighbouring Democratic Republic of Congo. According to a report by news agency Bloomberg, “the droneport project plans an urban service for commercial deliveries, such as e-commerce goods, that will be known as the Blue Line. It will subsidise a separate Red Line network ferrying medical and emergency supplies to remote regions at minimal cost”. In a press statement, Foster + Partners says cargo drone routes have utility wherever there is a lack of roads. “Just as mobile phones dispensed with landlines, cargo drones can transcend geographical barriers such as mountains, lakes and unnavigable rivers without the need for large-scale physical infrastructure,” the company notes. “Just a third of Africans live within two kilometres of an all-season road, and there are no continental motorways, almost no tunnels, and not enough bridges that can reach people living in far-flung areas of the continent. An ‘infrastructural leap’ is essential using drone technology and clean energy systems to surmount the challenges of the future.”
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Tuesday, 20 October 2015 08:28

Temporary pop-ups offer advantages in Africa

Temporary pop-up outlets may be the best way for many African businesses to start out, rather than having permanent operations hampered by product shortages and bureaucratic red tape. This is according to an article published by the BBC from the Ethiopian capital of Addis Ababa. Based on interviews with local entrepreneurs – among them a bar owner and the proprietor of an outlet selling infused honey – the article by correspondent James Jeffrey indicates that pop-ups are frequently more manageable, given the challenges. The Craft Cocktail Group, for example, hosted a temporary bar at a popular local hotel for the Ethiopian New Year celebration which took place in September. It also operates at a jazz club in the city. Co-founder Hamere Taye, who spent 15 years in the US before returning home, says a pop-up operation was a way of “getting a feel for Addis, the market and proof of concept”. Among the challenges of the cocktail business have been a lack of gin due to a container being delayed in the neighbouring port of Djibouti (Ethiopia is landlocked), fruits for drink mixers only being available at certain times of the year, and a shortage of glass bottles for mixers. It’s a similar story for Solomie Wasse, who started her pop-up business, called B Honey, from beehives in her mother’s garden. She offers honey infused with ginger and orange and has been operating for four years. “Being a pop-up is a way to know this is a business you want to be in, and to find out if people will keep coming back,” she tells the BBC, adding that it’s also a way to mitigate red tape. “It is not easy becoming legit and getting paperwork done in Ethiopia—it takes forever.” Read the full article here: http://www.bbc.com/news/business-34262086
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