12 Marketing Secrets to Break into the African Market
There is only one thing Africans care about — price
Africans primarily care about price. Everything else is secondary. Whatever strategy you are bringing to the African marketplace must offer a better value for money. And there is more to this.
I have witnessed a lot of companies try to break into the African market. Those who continue to be successful are those who have been on the continent for a long time. Many of them paid a tough price to achieve their first success.
You can consider this a hack to avoid catastrophic failure in Africa. Today, I see some companies venturing into Africa like it were North America. They are currently hailed as successful but I know they will fail woefully very soon.
To understand how to do business in African countries, you need to learn the culture, lifestyle, and attitude of the people. You need to understand what makes them buy. Just as an example:
A new company launched in Nigeria a few months back. It is a transportation initiative. I believe some investors backed it up with $120M. They are subsidizing transport fares to ridiculous rates. And they are having serious traction.
Here is what they don’t know. When their “promo” stops and the fares go back normal or slightly higher, the traction will drop like it is under the influence of gravity. Africans don’t get used to a mechanism or system, price makes them change. They don’t get used to anything.
There are 12 strategies that can guide you into success in the African market. If you choose to ignore them and learn the hard way, that is fine. But get to know them first:
1. Sell Necessities
If you are going to sell luxury or non-necessities, start with a necessity. Except you have a ready market begging for your product, do not go and launch a non-necessity for starters.
I would strongly suggest selling only necessities. If your product is not a necessity and you want to be successful, then you must structure your marketing to make it sound like a necessity.
Necessities sell in Africa because most of the people are barely getting by and hence buy only what is necessary. If you want to have a piece of their money, you must sell what they already buy. This means that you are coming to dethrone a successful product or service.
Overtaking a massively selling product is easy in Africa. This is because most products are of inferior standards. If you offer better value and you make people recognize how cheap it is compared to what they usually buy, you have won their hearts.
It is also the same for services. However, that is much more complex to achieve. But if you can achieve it and for one reason or another provide it at a cheaper rate, you own the market.
Remember, your offer doesn’t really have to be cheaper in price, it just has to feel cheaper.
2. Low Price, Not Discounts
The biggest mistake I believe companies make when they come to Africa is: discounts. The truth is, at the end of your discounts, everybody will leave. In Africa, customers move when price move. There is no customer allegiance.
If you are ever going to do business, your price must be low. Don’t do discounts. If you do discounts, you will have customers when the discounts are on. But when the real price comes in and it is no longer a fair bargain according to the customers, your customers evaporate.
The only exception to this is if you have decided to serve a very small market of elites. And if you started with a discount, you may not appeal to those elites initially. This is why you must start with your actual price.
The price may not be low, but it certainly has to look low compared to the competition.
3. Don’t Waste Money On Packaging
Unless you are selling absolute luxury, you don’t need fancy packaging. To a lot of Africans, fancy packaging means it is expensive. They will assume it is expensive without looking at the price. And you will miss a lot of customers by that look.
This is not to say that your packaging should be ugly. Instead, your packaging should be basic. It should not be far from what the competition looks like. It should be something that customers are comfortable to touch.
There are designs that look expensive. Most Africans won’t even ask about it. They will just assume it is above their league. Some people would even be suspicious and avoid it if they see a low price on it.
This goes for services also. An office looking elegant and impeccable is presumed to carry an expensive service. This is not a case for a ugly and shabby office. But it is not to go beyond what the potential customers will be comfortable with.
When customers are uncomfortable, they will not buy
4. Compete Against Yourselves
Don’t wait for another company to compete with you based on price. Start competing with yourself from day one. And what this means is:
Make a cheaper version of what you sell
Don’t let another company come to drag your customers away at a lower price. This is because a lower price will drag your customers away. And this is very important if you have global competitors also eyeing the African market. Let’s consider an example:
Everybody knows that Coke dominates the soft drink market globally. Due to the ease it brings, a lot of people in Lagos prefer plastic Coke. And it costs #120. Pepsi saw that and came into the market with their own plastic Pepsi, the same volume for #100. For just #20 difference which is less than 6 cents, people ditched Coke for Pepsi.
Realizing this, Coke had to respond and made smaller bottles for much lesser amounts. That was where the recovery started. And the competition was in their favor again.
Don’t wait for the competition to put you on your toes. Start competing with yourself. Don’t let people who can’t afford you look elsewhere.
5. Feed the Ego of the Proud
If you want to be expensive, go all out. There is no room to be partially expensive in Africa. There is no market for partially expensive. It is either a good bargain (on the basis of price) or it feeds the ego of the proud.
The ultra-rich in Africa loves to brag about what they own. And they buy ridiculously expensive things just so other people can see the price and “respect” them. So if you want to sell to these groups of people, the quality has to be superb no doubt but the most important part is the price. The price has to be ridiculously out of touch, even for the comfortable ones.
Just like making a cheaper version, making an expensive version might be very important to break even. However, the brand name of the very expensive one and the cheaper ones must be different. Otherwise, you will ruin the moment of the ultra-rich trying to show off.
6. Never Offer a Cash-On-Delivery Option
Never ever try this. Do not attempt at all. Just trust me on this one. Let me tell you a story:
An e-commerce company that had just launched was offering a cash-on-delivery option. They had thought that people would want to see, feel and touch what they are buying before they paid for it. Plus that, they were running a promo of free delivery.
A man from a faraway city ordered one of those massive inch TV for inspection. Actually, the webpage had nothing that explicitly said you must buy when you request to see the product. Since it was cash-on-delivery, the customer has nothing to lose. This company went through the hassle of delivering the TV to this man. And the man inspected it, tested it and asked them to take it back because he just wants to be sure it works. He did not buy.
That was a tough lesson that made them halt the cash-on-delivery option. If you are ever going to try cash-on-delivery, there must be a surety that the customer is definitely buying.
But I would strongly suggest you avoid this.
7. Do Not Offer Money-Back Guarantee
Don’t do this. It might look like a smart thing to do, but don’t be fooled. It certainly works in most parts of the world, but it doesn’t have the same effect in Africa. Money-Back Guarantee is just a way of telling people that they can eat their cake and have it. And trust me, people will try.
The marketing effect you want the guarantee to have will be already filled with the low price you offer. Don’t even consider Money-Back unless you want to attempt a publicity stunt on a massive scale. And with that, you must be ready to lose money.
8. Involve Local Distributors
Piracy laws, IP protection, copyright laws are not so strong in most African countries. This is why if you make a product with such features, be ready to find counterfeits of your product. The best way to minimize the effect of this on your sales is to involve local distributors in your strategy.
Local distributors know the terrain. They know who the pirates are. They know the market much more than you do. Instead of fighting them, you could involve them. For example, they could sell the cheapest version of your product instead of the counterfeit.
A popular US author had problems with the African market. His books were selling but they were not recording sales. Most of the people were buying the counterfeit version. After all, it is the same content the book contains. So, instead of going into a legal battle with those pirates, he did something smart.
He met with some of the top local publishers that understood the terrain. And he sold them the rights to publish and sell the substandard version of his books. In that way, it made no sense to create the counterfeit version anymore. The author made more money that way.
If your product has to do with distribution, involve the locals.
9. Don’t Begin With TV Ads
TV ads are for businesses that have customers already, not those that are just starting out. Even if you have something important to say or a very compelling offer, you are better off going on the internet or even with a billboard.
The rate at which people watch TV is dropping, even in Africa. Unless your target market is kids, I don’t think a TV ad is smart.
A friend of mine just got a smart TV. He was thinking of buying a cable to get plugged to TV stations. But I introduced him to the joys of online streaming. Now, he is not buying cable anymore. And in fact, he is starting to wonder why people buy cable.
TV ads are not effective to capture customers for the first time. It is better to use metrics that can be measured and tracked. The internet is way better for this.
When you have lots of customers, you can demonstrate brand dominance with TV ads.
10. Make One Necessity Irrelevant
This is another big secret of the African market. It is important to sell necessities. And there is a product right now that you have to beat in the market if you are already thinking in this direction. But instead of direct competition based on lower prices, there is something else you can do.
You could make one necessity irrelevant. This is what I mean. If there are two products that people spend a certain amount of money on, you could create one product that will fill the need of the two that will be less than the combined price of the two. Here is a vague example:
A mattress and a pillow. Most people buy both separately. But if you sell both at the price people would normally buy just the mattress, you have a compelling offer.
If your offer gives people the pleasure of two necessities, even if they are not used to the second one, they would buy that over the individual sale. But there is a bigger caveat to this.
Your offer just has to incorporate this “1 for 2” mentality in the marketing. The secret is in making people realize that for the price of 1, they can have 2 necessities met. Many would surely try it, but the majority wouldn’t. This has happened before.
A copywriter was once asked to write an ad for a wine. He then went on to write out the process of how the wine was made in elaborate terms using beautiful words. This resulted in a massive boost in sales for that particular wine brand. The interesting part was that all wines were made this way. But the brand that demonstrated it to the consumer owns the consumer.
Demonstrate to the consumer that they can fill two needs with your one offer.
11. Free Delivery
This is bad and good depending on how you use it. In Africa, people love free. I know someone who is not poor by any standard who has over 40 emails created just because she wants to keep enjoying free trials indefinitely. If you are going to do anything for free, be sure you can sustain it and you can afford it. If you cannot afford free delivery for the long term, don’t start it.
There was an African food startup that would pay for your food and the delivery when they launched. I personally know someone who ordered about 4 times from them. She said she had friends who ordered lunch every day from that startup. The moment the startup switched to payment, all of them stopped and deleted the app. I am not sure if the startup still exists today.
Free delivery is a compelling offer, but if you can’t afford it, don’t do it. A better way to do that is to factor in the delivery cost into the price and then claim the delivery is free. That is much better. In most cases, people don’t like to see a delivery cost come up after they have decided to buy.
Free delivery is good only if you can afford it and sustain it
12. Celebrity Endorsement
It works. This should not be mistaken for using famous Instagram personalities. That works too, but it doesn’t guarantee sales. The right celebrity endorsing your product can boost sales massively.
In this aspect, the industry, product, and celebrity matters. The celebrity has to be respected among the customers you are trying to reach. A market survey is very important here. If you discover that those making the decision to buy what you offer are mostly women in their 40s, the celebrity you choose must be one who has a large following of women in their 40s.
Every celebrity has their audience. Even among the same group of people, each celebrity hits different. The celebrity must be one that rhymes with the identity you want to be associated with. Otherwise, it will just be a nice ad and it won’t drive people to buy.
People on the African continent are swayed by celebrity endorsement when it is rightly used.
I hope these few points help you to craft a winning strategy into the African market.