Photo credit: DiasporaEngager (www.DiasporaEngager.com).
According to Brand Africa 100: Africa’s Best Brands 2020 survey, Africans prefer foreign brands over local ones. In 2011, the representation of African brands seemed very optimistic when they registered a 34% representation, but in 2020 it dropped to an all-time low of 13%.
This is a worrying statistic as it may indicate that Africa is failing to meet the needs of its growing consumer market, which was worth $1.4 trillion in 2020. The AfCFTA if properly implemented will create an even bigger continental free trade zone with a potential market of 1.7 billion people.
This consumer-led survey strives to establish brand preferences across Africa, using a representative sample of respondents over the age of 18. The survey covered 27 countries that jointly represent 50% of the continent, across all the economic regions, covering approximately 80% of Africa’s population.
The African brands which have stood the test of time include MTN (South Africa), Dangote (Nigeria) and Safaricom (Kenya). These brands have been consistent in their performance as they are still favoured by Africans.
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They are people-oriented brands that have won the hearts of Africans. The report suggests that these top brands have common characteristics in that they have, “deep local insights, localised marketing and outsize marketing budgets… they have managed to create intimate and infectious relationships with the African consumer.”
Gone are the days when marketers believed in a global market for uniform products and services, and they distributed standardised products around the globe. Company executives have now developed hybrid strategies to suit different markets. This was due to the discovery that consumers in most countries failed to relate to generic products and communications.
Why Africans have a preference for foreign brands
Various studies have shown that Africans esteem brands from developed nations because they are deemed to be of better quality and more prestigious as they raise one’s social status. This could be said for brands such as Samsung and Apple which are ranked third and sixth respectively.
Some brands which are top of the list of preferred brands have been around for a very long time. They are easily recognisable since consumers have become familiar with them. A good example is Coca Cola which has been enjoyed for over a century in African markets.
Most people now even take it for an African brand because it has been tailor marketed to suit the African market for so long. Another example is Unilever’s Colgate which is synonymous with the name of toothpaste for many.
Production in Africa is low; trade within Africa and exports outside the continent is mostly in primary goods. This lack of diversification in African products leads to a reduced market share as there are fewer African products being traded within the continent. There is a need to encourage investment in Africa’s industrialisation initiatives so as to increase the number of African products in the market.
To attract the private sector and foreign direct investment, there ought to be a favourable investment climate. African governments need to work on sound and predictable macroeconomic policies because investors need stability to enable planning.
Liberalisation of trade has also partly contributed to low production because it led to the closure of some industries whose products were substituted by the influx of cheaper inputs. The textile industry in Zimbabwe is one such example; low sales crippled David Whitehead Textiles, after the market was flooded with cheaper clothing from China.
Non–Tariff Barriers to Trade
Removing tariffs alone is not enough to promote intra–African trade. Quite a number of trading blocs have been formed in different regions around the continent but intra–Africa trade has only ever grown to a peak of 20% in 2016; in 2019 it was only 15%. This shows that there is a need to tackle other non-tariff barriers.
To grow a brand there is a need to increase trade and acquire a greater market share, but a number of reasons have made this a difficult task for African traders. Chief amongst these reasons is poor logistics channels, followed by cumbersome border processes as well as rampant corruption levels. All these factors increase production and marketing costs and ultimately hamper trade within the continent.
Some road networks are so bad they make it almost impossible to reach certain places, especially in remote areas. Air transport is also very poor so much so that when exporting products to some African countries they first go through Europe before getting to their African destination. The border bureaucracy also increases the amount of time goods spend in transit thereby ballooning costs. Officials also demand kickbacks along the way further exacerbating the situation.
To curtail these challenges governments need to get together and formulate ways to streamline import or export within the continent. A lot of investment is also required to improve road infrastructure and create better road networks. This cannot be achieved overnight, because it is a process requiring time and massive financial investment.
Technology is also vital in reducing logistical issues because products and services can now be sold online and payment made electronically. The growth of online shopping platforms such as Jumia is evidence enough. ICT can also be used to market products throughout the continent, allowing one to reach markets they have never been to physically.
There are some tactics that organisations can implement to promote a brand. These include sponsoring African influencers and making them brand ambassadors. Nike for example, sponsors Eliud Kipchoge, the Kenyan marathon runner. This can also be seen as corporate social responsibility, but at the same time, it is a marketing tactic to advertise the brand every time the runner wears Nike apparel.
African organizations need to invest a substantial amount into marketing campaigns across the African markets, appreciating different country cultures, languages, and choices. South African MTN has had a successful marketing strategy in the 22 African countries it operates in.
Intellectual Property Rights
There is need to take the reform and enforcement of Intellectual Property rules seriously in Africa. As African economies grow, the continent could suffer huge losses from ignoring intellectual property rights. The unsuccessful attempt by the French in 2013 to trademark Rooibos, a popular South African tea, should be an awakening call.
Through AfCFTA, Intellectual Property (IP) rights will begin to form a single, integrated jurisdiction for the management of IP rights in Africa. A single registration would ensure rights across the whole continent and the capacity to administer those rights using a common judicial mechanism. This would guarantee added value to intellectual property in Africa, encouraging creativity and innovation across the continent. Doing so also promotes a harmonized way of valuing, licensing, and transferring intellectual property rights, a crucial element for brand growth.
An intensive continent-wide campaign to encourage Africans to favour their own brands is a must. Governments and the private sector must all contribute to this campaign because it is important for the growth of African brands. The aim of the campaign is to “promote pride in Africa, enhance awareness of homegrown brands and encourage patronage of African ideas, goods and services”.
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Source of original article: Industry and Trade – The Exchange (theexchange.africa).
The content of this article does not necessarily reflect the views or opinion of Global Diaspora News (www.GlobalDiasporaNews.com).
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