Since the African continent is home to more than 1.1 billion people, it has the potential to account for one-fifth of the world’s population by 2025. As a result, many businesses and investors have become aware of Africa’s consumer market potential. Despite this potential, many obstacles can make companies hesitate to enter the market. Even so, there are quite a few multinational companies that have managed to capture the opportunities in one of the world’s fastest-growing consumer markets.
One of the main reasons for this potential is that a big part of the African population is young, urban, and connected. Currently, the working population in Africa is growing at 2.7 percent each year. At this rate, nearly two-thirds of the estimated 300 million African households will have some discretionary income by 2025. Additionally, a big part of African’s consumer market is filled with the younger generation who are aged between 16 and 34 years old. These people are willing to spend and tend to be more eager to try new products.
The two trends driving this rapid growth are urbanization and the rise of mobile communications. The continent already has many cities with more than 1 million inhabitants; this means that many companies can secure distribution in Africa’s fast-growing cities due to the concentration of consumers. Moreover, mobile technology is completely changing the game. In fact, by the end of 2014, mobile penetration in Africa was estimated at 89 percent and continued to proliferate and enable money transfers and microfinance transactions.
However, just as the potential of the African has become widely acknowledged, so have the obstacles of potential business endeavors. Some of these include political instability and conflict, poor infrastructure, language barriers, differences in consumer behavior, a fragmented retail market, and low data availability and quality. Wars and authoritarian governments continue to affect businesses as well as policies in many countries. According to the world freedom index that measures political and civil liberties, of the 54 countries in the African continent, only 10 are considered free, 22 are partially free, and 22 are not. Second, many African cities currently have modern road systems. However, only one-third of the population lives within 2 kilometers of a paved road that is stable year-round. Furthermore, travel within the continent is quite expensive and challenging.
Along with that, a high percentage of the population has no access to electricity. These problems do not just constrain consumer demand but supply as well. While linguistic diversity is excellent, it can get complicated when companies need to deliver their marketing messages in multiple languages to communicate effectively with African consumers. Another factor that could be an obstacle is that Africans in different countries make purchase decisions differently. For example, research has shown that while most Angolans look at ads and compare stores to get the best prices, only about 27 percent of Kenyans do the same.
Opinions about brands differ by country and region as well and the continent has a fragmented retail market. For example, most consumers will buy their groceries primarily from the neighborhood or independently owned convenience stores. On the other hand, few consumers will go to supermarkets for these items. Finally, except for the largest cities, there has been a disparity in economic data and market research. As a result, companies which look at existing data and extrapolate it to a national and regional level get inaccurate insights.
Regardless of some serious challenges, many companies have made the African continent a part of their success story. The reason that consumer companies like Coca-Cola, Nestlé, and Unilever have succeeded in Africa is four-fold; they took a granular view of growth, tailored their offers to local needs and preferences, created a route-to-market model based on geography and channel, and built a large well-equipped sales force.
According to research, the most successful companies on the continent have been selective about the markets they want to enter. Rather than building a presence across entire countries, they opt to target the fastest-growing cities and city clusters where per capita income and spending exceeds the national average. Moreover, companies need to understand each target audience’s local needs and preferences to drive mass adoption of their products or services. As mentioned previously, it is not just about local product preferences but also local buying behaviors. Once companies have prioritized the highest-growth cities and have defined a portfolio of products for them, the next step is to ensure that the products are available for sale in those cities. To do so, successful companies tend to develop route-to-market models that primarily focus on the most attractive channels.
Rwazi is a data services company that is dedicated to helping businesses around the world collect and analyze on-ground data from African countries. They provide organizations with new on-ground data on products, services, and activities from the African continent by utilizing a network of mappers and data collectors spread across urban and rural areas in Africa. While the company is based in Mauritius, Rwazi serves customers across the globe in different industries, including healthcare, consumer goods, automotive, education, finance, agriculture, energy, transport, and media.
The team behind Rwazi understands that organizations need near real-time, on-ground data to make effective decisions on activities such as expansion, investments, distribution, new product/service offerings, and reach target beneficiaries. For this reason, they’ve developed a network of 5,000+ mappers are spread across cities, municipalities, towns, and villages in 40 African countries. This network is expected to reach 50,000+ mappers by the end of the year.
Customers can utilize the Rwazi network to gain data from target areas and personas. Given the travel limitations that the COVID-19 pandemic has caused, organizations can execute on-ground activities even in the regions that are difficult to reach.
Currently, Rwazi is the first and only company in the world with a large and growing network of mappers spread all over sub-Saharan Africa. They want to help organizations get the data they need to make informed decisions, in addition to helping millions of young people in Africa who need more opportunities to earn an income.
For more information about Rwazi’s data services and their platform, check out their social media platforms.