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b2b marketing in Africa

Wednesday 14 July, 2010

The day after the World Cup ended I received my copy of B2B Marketing with this lead article African ‘Lions’ ready to roar by Sean Callahan.  The article quotes heavily from the McKinsey Global Institutes article Lions on the move:  the progress and potential of African economies.  I was surprised to see Morocco & Tunisia listed along with Egypt & South Africa as the most advanced economies.  Africa is also surprisingly urbanized, 40% & 52 cities with population of 1M or more, which makes accessibility much less of an issue than it’s been in the past.  Africa is on the rise & is more & more worthy of consideration as a viable place to do business.  It’s different, less sophisticated, & in some ways still screwed up, but it’s getting better.  Personal relationships, (as opposed to virtual/e-mail/or even telephone)  are still very important.  Immediate out-of-pocket cost is slowly losing in importance to total cost of ownership.

There is a risk in lumping all of the countries in Africa into the same conversation because the economies in many of those countries vary drastically.  South Africa is the model for others to follow.  Perhaps lumping in the Middle Eastern petro-economies in with the rest of Africa doesn’t make much sense.  Regardless, the economies of the coastal countries is different from those of the interior countries & those closer to the equator differ from those further south.

Currently the way the article portrays it, Africa is still a place where only companies with deep pockets can afford to roll the dice there, or that could just be B2B’s bias.  Siemens is big there & growing in the region.  I worked for Siemens in Germany many years ago, & even though they might not have the cash in the bank they had then, they are still investing in building the infrastructure on the dark continent.  The Chinese are increasingly active there, so if we’re competing with them either for resources or markets, we need to pay more attention to this area.

As a general market, incomes are growing, so Africa is becoming a destination for consumer packaged goods manufacturers.  If they can iron out infrastructure issues, Africa can be a low-cost manufacturing location.  They’re simply bypassing landline based communications systems & are getting increasingly connected wirelessly, which is fueling growth on both sides of the demand & supply equation.

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