How people spend their money in Africa doesn’t just depend on how much they earn; infrastructure challenges such as no electricity and the use of generators have a huge impact on lifestyle and brand choices, according to an editorial in BusinessDay.
Companies hoping to expand their brands across Africa must understand the use of local intelligence, local operations, local staff and consumer insights, the writer said. These are key to success, along with acknowledging cultural nuances. Building relationships is critical but acknowledging respect for the locals is even more so, the writer said.
Brands must have an African expansion strategy for growth and increased profit, but it is also important that the tightened policies governing tax, immigration and employment laws promote trade between African countries on the continent.
A free trade area, due to be completed by 2015, will benefit promotion of integration, infrastructure development and intra-regional trade for members.
Africa has 55 countries – each with diverse cultures – so challenges such as language barriers, political instability, location, corporate governance, currency differences and poor infrastructure can be costly and hamper operational goals. In the same vein, it provides opportunities for development and growth for those with sound business acumen and a huge appetite for risk.
Your Africa strategy has to consist of sound qualitative and quantitative research, supported by strong macro-economic indicators and a unique differentiator that sets you apart from competitors, the writer says.
You will need to identify policies and legalities that govern the particular business environment and understand your target market fully, knowing the different segments, their lifestyles, disposable income, purchasing and product use behavior.
Businesses cannot simply adapt the same business or communication strategy for each African country unless they are aiming for failure. If they do, the risk is being called an arrogant post-colonial opportunist.