Many African markets are still largely underexplored. The question is where to start. On a continent that features thousands of languages and equally as many religions, it takes a multi-dimensional analysis to identify promising markets, says Marc Zander of XCOM Africa, a consultancy agency with the explicit goal of helping clients grasp business on the African continent.
“You may have a great product, the price may be right and you may have thought of everything. The question is: will it have a chance of survival in a new context, in Africa? Have you thought of all challenges and opportunities? We help clients create value for money in ‘tier-1´ markets Nigeria, Ghana, and Kenya: the most promising of African markets.”
Marc Zander, a consultant and long-time expert on market entries into Africa, first came to the continent in 1998. His professional experience stretches across a decade and a half of network building and includes engagement with various companies. In early 2011, these engagements were bundled in XCOM Africa. The consultancy firm facilitates its clients pressing a footprint on the market: “From opening an office to marketing campaigns – we provide whatever is required to secure successful entry onto the African market.”
Not doing the required homework is what makes international products fail in Africa, says Zander. “To really be successful in these countries, you need local parties, agents and distributors, as well as other key stakeholders. We add our expertise in product analysis, adjusted for local impact: will my product last or should it be modified? In a way, we act as the bridgehead that companies need to get a head start in a new market.”
Many Western companies entered China, India and other emerging markets, but failed. Driven by the uncompromised potential these rising economies offered, large-scale investments were made. Unaware of the rules of the local game, many such attempts failed, and caused reluctance. “Thriving on a platform that XCOM manages on behalf of them, our clients ‘try’ Africa. Companies import their products and re-evaluate after a given period of time.” When expectations are met and a product proves successful, clients of XCOM Africa will naturally expand. If not, they are free to retreat without having to demobilise a full-grown business operation.
Any learnings? “In most cases I advise clients to keep a slow pace. Ambition is a healthy force, but you can’t move into 54 countries all at once; you need to focus. Tier-1 markets – which is where we work – display stunning growth patterns relative to other regions in Africa. Be it Mc Kinsey, Ernst & Young, or any other auditing agency that rates African macro-economic performance, they all point in the direction of Nigeria, Ghana, and Kenya. An additional advantage is that English is the lingua franca in these countries.”
The African market may be tough, even for international enterprises. To Zander, their sales effort will only be effective when suitable partners are identified. Expertise is vital to distinguish between a healthy partner that can really help conquer a market and the not uncommon ‘one-man show’. On another level bureaucracy dazzles companies. “XCOM Africa kwows the way and can help reduce cost, time, and risk when entering the African market.”
What is the biggest mistake international companies make as they try the African market?