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Africa: The Next Frontier for New Professionals
When you think of Africa as the next emerging continent it conjures up images of people wearing jungle helmets, the great hunts of the Victorian era or the vast plantations of the colonial period.
But believe it or not some serious brands think that Africa is the next frontier for business and that this continent will emerge, in a similar way to China and India, in the next 15-20 years.
In some previous hubs I have written about Africa from a product point of view (see Sponsoring the Africa Cup of Nations), but in this hub I intend to demonstrate that there is a big opportunity for established brands in Africa, including luxury brands.
The Brand Issue
In emerging nations there is a propensity for people to start aspiring to world brands. The reason is that world brands build their product to a certain quality, therefore the consumption or usage of that product should be safe. The product generally lasts longer. As we saw in China with the contaminated milk crisis, local brands may at times take short cuts that could affect the health of the community.
This usually appears in nations that are emerging with a two-speed economy – those who are below the poverty line will consume whatever they can afford, usually local products. Whereas those who are aspiring middle class and beyond have the buying power to afford world brands and tend to start to buy this type of product.
The other reason why people in emerging nations tend to aspire to buy world brands is that the quality and life of the product is generally better, offering better value for money over the life of the product.
This became apparent to me when I read an article by Prada’s CEO, Patrizio Bertelli in the September 2012 edition of the Harvard Business Review (Prada’s CEO on Staying Independant in a Consolidating Industry). Bertelli talks about opening stores where the biggest risk is. In the 1980’s Prada was a western world focussed brand. But to grow their brand they took the risk of opening stores in Hong Kong before the handover and in Russia around the time of Yeltsin during the 1990s. At this time who would have thought that China and Russia would represent huge percentages of their revenue today!
In terms of risk taking Prada believe the future is Africa. Bertelli says:
“I’m starting to look now at Africa, which will be a huge market in 10 to 15 years. I think Africans will respond well to our approach to business, because they, too, are tired of being patronized. And does Africa really look any more challenging that Russia in the 1990s?”
How to Penetrate Africa?
A number of pundits are saying that the gateway to Africa is through South Africa. While this has merits it really depends on your brand and product suite and what you are really trying to achieve. Others may find it better to target the emerging democratic nations where their brand fits into their current lifecycle. What remains apparent is that it ‘depends’ on your business plan.
Bertelli does give us a hint to how to penetrate Africa. What he says is that Prada needs young people who know something about Africa and the business needs to give these young people the space and responsibility to make it happen and in effect to make a difference.
The challenge to us is – are we the young people who know something about Africa or where can we find them?