Nomava Zanazo 4 myths and misunderstandings about doing business in Africa TED
Transcriber:
I’ve got to be honest,
companies tend to underestimate me
and I want to change that.
I think that when companies talk
about bringing their products and services
to my European and Asian peers,
they automatically consider things
like, where those peers shop,
what are the considerations
before purchasing a product,
are they brand-loyal
and who are their influencers?
That’s great.
It’s smart business and good marketing.
But I’m not sure
that those same considerations
are automatically being made
when companies talk about bringing
their products to me.
In my job,
I advise companies and individuals
that are looking at investing in
or expanding their African footprint.
And the more conversations I’ve had,
the more I realized
that there are still so many companies,
organizations and individuals
that still completely
misunderstand who I am,
not only as an African consumer,
but as a citizen of one
of Africa’s 55 countries.
South Africa, in case you’re wondering.
That’s a real shame,
because these misconceptions
will make it hard
to win my share of wallet.
And obviously it’s not just
my wallet on the line,
but that of 1.3 billion
potential customers.
There’s a lot of money
to be made in Africa.
And I think if you’re a company
and you don’t figure out
how to get into Africa now,
in the right way,
you might sadly miss the window.
So let me help you by debunking
some of these myths
and misunderstandings
around Africa and its citizens.
The first myth:
Africans are cheap.
Maybe it’s because of my continent’s
legacy of poverty and famine
that makes people think
that we just go for the cheapest product.
There are still many companies that think
they can just push their cheapest
product lines into Africa.
But that is a very
dangerous assumption to make
because we don’t want to just buy anything
that appears in our stores.
But we are focused on buying
things of good quality.
In fact, according to research
done at my company
where we studied consumers
that come from countries
that make up at least 80 percent
of the continent’s GDP,
we found that we actually make decisions
of quality over price
more so than most developing economies
and rapidly developed markets.
Price usually come second
after durability,
functionality and efficiency
in non grocery items.
And it comes second after taste
and nutrition in grocery items.
Even in the poorest of consumers
who make up the largest socioeconomic
group in many African nations,
they are still willing to pay
a premium for quality.
On that note, let me tell you
something else.
New African customers like myself
are connected to the rest of the world.
Yes, we travel.
Yes, we have the internet.
So don’t think that we don’t notice
the differences in the quality
and the seasonality of the clothes
you push to your South African stores
versus the one that I can buy
in your European branches.
And by the way,
don’t think that my friends
and I don’t notice
that we have to pay a premium
when we shop in your local stores
versus when we shop in your
European stores.
So this has to end.
If you want to play in Africa,
it’s not about pushing your cheapest
product lines into the continent.
But it’s about developing products
specifically made for African consumers
that fit our desire for quality
and our diverse budgets.
My second myth:
Africans don’t value brands.
Just as you shouldn’t push your cheapest
product lines into the African market,
don’t think that your product
will take off without any work.
African consumers
are highly brand-conscious
and are loyal to brands
that have been around the longest.
Because – I’m sure you know
what I’m going to say next –
those brands are associated with quality.
But there’s actually a little bit more
nuance to our relationship with brands.
Because you see, we inherit brand
preferences from our family and friends.
There was an interesting study
done by one of my clients
looking into the cosmetics
industry in East Africa.
The study found that when young
girls enter high school,
their mothers introduce them
to a specific brand of body lotion.
And even though those girls
may change brands
once they become older
and financially independent,
they too will give their daughters
that same brand of body lotion
when they reach high school.
Brand-name recognition is huge.
I was actually talking to one
of my research colleagues the other day
and we’re actually laughing
at how growing up in South Africa,
Mdantsane, to be specific,
when our parents had visitors,
they would send us to the nearest
bazaar shop to buy Coke.
But before we leave, our parents
would ask the visitor,
“Which flavor Coke do you want?
Do you want Fanta Orange?
Do you want Stoney
or do you want Lemon Twist?"
And in fact, up to today,
in many South African homes,
soft drink is referred to as “Coke,”
toothpaste is referred to as “Colgate,”
margarine is referred to as “Rama,”
and the list is endless.
So what does this mean?
This means that if you want to try
and enter African markets,
you need to give African consumers
a reason to believe
that your brand is the best
and your brand is of high quality.
You also need to spend the money to ensure
that your brand is present in all
of the places that we Africans shop.
I’m talking high-end malls,
but I’m also talking about local
open-air markets.
Bringing me to my third myth.
You see, there’s still a misconception
that emerging markets,
like the African continent,
and especially the African continent,
are laggards when it comes to innovation
or technological advancement.
Africa’s leapfrog story
is at least 10 years old now.
So why is this myth still around?
I think it’s because when
the leapfrog story gets told,
it stops at mobile,
when in fact, our leapfrog
story goes far beyond
our massive mobile saturation.
But before I tell you that,
I think it’s only fair
that I give credit where credit is due.
Africa’s leapfrog story is amazing.
I hope it blows your mind
that at least 60 percent of GDP
in Kenya and Tanzania
goes through mobile money.
Speaking of that,
I spent a few months
in the US a few years back.
I found a great apartment
and was ready to move in
when my landlord asked me
to cut him a check
for the first month’s rental and deposit.
And I was like, “Sorry, what?”
Because I honestly
could not remember back then
when was the last time someone back home
asked me to cut them a check.
But like I said, Africa’s digital
transformation is so much more exciting.
We’re seeing e-commerce fast taking off
and the new Africa trade agreement
will make it easier
for cross-border transactions,
which means African-made products
bought by African consumers
are crossing African borders
easier and faster than before.
So if your company or your brand
is looking to get a piece of the action,
now is probably the right time to come in.
Now, my last myth,
which really pains me
to have to talk about in 2021:
Africa is one country.
I know that I’ve spoken in great length
about some of the common
consumption habits
across the different African markets.
But it’s important to remember
that Africa is not one country
and African communities,
even within individual countries,
are not homogeneous.
We speak over 2,100 languages.
Therefore, the customer positioning
and target segments for different products
can vary substantially.
And if you want to get into Africa,
you need to get into the weeds.
Take tea and coffee
consumption habits, for example.
Moroccans prefer to purchase
their tea in traditional markets,
Kenyans prefer to purchase
their tea and coffee in supermarkets,
while Ethiopians prefer to purchase
their products in local kiosks.
Local culture also has a big influence
on what we buy and where we buy.
Take me and my group
of girlfriends, for example.
When you look at this
group of 10 girlfriends,
on paper, we’re the same.
Young, Black, middle-class females,
that grew up in one
of South Africa’s major townships,
came to Johannesburg to pursue
tertiary education and employment.
Some segmentation studies
refer to us as Black Diamonds,
members of South Africa’s fast-growing,
affluent and influential Black community.
But if you really do your homework,
you will first appreciate
that this group of 10 girlfriends
is made up of five
out of South Africa’s 10 ethnic tribes.
And even though our tastes
are heavily entrenched
into the urban culture of Johannesburg,
our respective traditional culture
still influences what we consume
and how we consume it.
And it’s easy to see if you just open
our respective pantries.
So if you want your product
to thrive in the diverse African markets,
you need to do your homework.
You need to take your traditional
segmentation plans
one or two levels deeper.
Yes, it’s more work,
but my continent is worth it.
I want to leave you with this.
A share of my wallet
is here for the taking.
But not for long.
African businesses are booming
and trade across all 55 countries
is getting easier and faster by the day.
So it won’t be long before
non-African products are less desirable
than the ones that we make here at home.
So if you want in, great, come join us.
But do it thoughtfully,
do it intentionally,
spend the money,
and for goodness sake,
don’t underestimate us.
Don’t underestimate me.
Thank you.