When launching a new tech product Africa, entrepreneur Herman Heunis used three key strategies: minimize customization, use early customers to educate the ones who come later and understand consumers’ basic needs.
Heunis is founder and managing director of free African cell phone instant messenger Mxit. He used these strategies to assess low-income African consumers, according to a report in Gadget.
Mxit was developed in South Africa and exported to several African countries with huge success, Gadget reports. According to a 2011 study by consultancy World Wide Worx, Mxit had about 10 million active subscribers, making it the largest mobile social network in Africa.
Firstly, Heunis says he kept the product simple, minimizing customisation. Secondly, Mxit improved reach through accessing early adopters in communities and ensuring that users are constantly educated about new services. Finally, Mxit continues to ensure it understands and appeals to its target consumers’ most basic needs, “which can often be misunderstood if there is not sufficient research,” he said in the Gadget report.
So how can companies take advantage of the burgeoning opportunity in Africa?
“I believe there are five critical success factors when embarking on an African strategy – the five ‘P’s,” Heunis said.
Perspective – “Doing business in Africa can be risky, but not more so than in other emerging markets,” he said. “Provided one is mindful of the risks, opportunities should be actively sought.”
Planning – “Patience and persistence yield results and careful planning and flexibility will lead to successful outcomes.”
Places – “Creating a hub or node is far more relevant in the African context than duplicating individual distribution points.”
Partnerships – “Deep relationships at various levels within government and local businesses will strengthen the outcomes of any project.”
People – “Identifying, nurturing and retaining talented and committed local staff will ensure sustainable success in Africa.
“The key is not trying to impose tried-and-tested solutions but recognizing Africa is unique and therefore requires unique solutions.”
As consumer demand in more mature markets struggles to reach pre-recession levels, companies are increasing looking to emerging markets to drive business growth and Africa is the most promising, albeit the least understood.
The business environment is however improving, infrastructure is being strengthened, and growing numbers of consumers are earning more and purchasing products and services that support their aspirations. The opportunities are indeed ripe for the picking.
#1 Macroeconomic Newsletter For Black America