Do Brands Matter in Africa?

Many people argue that brand awareness, and more importantly brand loyalty, is low in much of the African continent. Given the per capita GDP in particular of many African nations, academics and bureaucrats often argue that basic commodities, such as rice, oil, sugar, soap, clothing, etc. are all interchangeable and that those with the least means will inevitably purchase those products with the most affordable price. And this is often the case when it comes to certain products – evidence would suggest that many African consumers are still “switchers” for given basic commodity categories, and do not display what the West would categorize as classic brand loyalty.

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Above: FanMilk is one of the fastest growing ice cream brands in West Africa, offering affordable cool treats in hard to reach places.

But this is not the whole story. In the past several decades, brand awareness and brand loyalty have become increasingly common, as per capita GDP creeps up across the continent and the proliferation of options intensifies. No more are the days where you can only find local soaps for sale in a rural village market – now we see soap brands from Turkey, China, Lebanon, USA, and the UK being sold in wheelbarrows in towns where there might be only two or three generators. And with this proliferation of new brands entering the market, they are finding the need to distinguish themselves more and more to capture the attention of the increasingly brand aware target audience.

1000x393_primus_africaAbove: Primus beer is a semi-regional African brand, with operations in both Burundi and Rwanda, achieving great success as part of the Heineken brand family and enjoying their distribution systems and immense marketing budget.

While before quality was denoted by the local source of a product, African consumers are now assessing the quality of their products based on their foreign place of origin (for instance, “Made in China” is always seen as inferior to “Made in the USA” or “Made In Europe.”) The story is not new, but our acceptance of the speed at which things are changing is often behind the times, and I want to explore how the dialogue is now being held locally instead of just amongst the ivory towers of the West.

A recent pan-African assembly of both public and private sector individuals, called the Brand Africa Initiative, is increasingly interested in understanding these trends throughout Africa. The group, founded in 2010, aims to achieve an “insightful, brand-driven approach [for] sustainable socio-economic growth,” with a chief objective being the “championship and recognition of global African brands and global brands in Africa.” Every year since 2010, they have published their independent ranking of the best brands throughout Africa, ranking them based on value and admiration.

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Interestingly, only one brand in the top 50 was from Africa (#36, MTN, from South Africa), while the rest of the leaders in Africa are from the US (Apple, Google, Microsoft, Coca Cola, McDonalds, Nike, Cadbury, P&G, Levis, etc.), France (Orange, Gucci, Alcatel), South Korea (Samsung, LG), Japan (Toyota, Mitsubishi, Sony, Panasonic, etc.) Germany (BMW, Mercedes, Porsche, Nivea, Adidas, etc.), Switzerland (Nestle), UK (Smirnoff, BBC, Dove), and China (Toshiba, Lenovo). What does this tell us?

For one, it tells us that brands matter to Africa. No matter what the indicators tell us – the per capita GDP is too low, awareness of key health and societal issues are frighteningly low amongst our target audience, behavior change is a slow and arduous journey to overcome ancient historical dogma, etc. – brands have broken through and captured the attention of one of the world’s most diverse and disparate continents. All in a matter of a few years for some. In my own research, I have asked about brands amongst even the lowest SES quintile and, despite not having the purchasing power to buy many of these popular brands, they are still ever present in their minds and aspirations.

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Above: Huggies has taken the developing world by storm, successfully converting users from cloth to disposable.  While their prices are high, African consumers have adjusted their patterns to make the investment worth it: many lower SES users will buy one diaper at a time, and focus only on the sleeping hours, to ensure a good night, and refrain from using multiple diapers throughout the day to save money.

To support this thinking is a recent study conducted by Deloitte in 2013 entitled “Africa: A 21st Century View.” The statistics in this report often contrast what we see in public health reports and are informative for how anyone trying to conduct business in Africa: the economy is growing twice as fast as more developed countries; by 2017, Africa will be the 2nd largest market for investment among European companies; the rise of the middle class is growing at a shocking rate, with expectations that by 2060 half of the population will be considered middle class; and the list goes on.

Of the four countries focused on in the study, Kenya has the lowest per capita income at the moment by purchasing power parity at $2,180, Nigeria is second at $5,120, Egypt is at $10,600, and South Africa is the richest, at $11,970. But Kenyan youth, it seems, are the most image-conscious and consumerist of the four countries, who even run the risk of falling into debt just to keep up with the latest trends. In fact, one in three said that “buying well-known brands makes me feel good” – at 32%, the highest of the four countries surveyed. They also report the highest percentage agreeing with the statement “I would spend a bit extra to keep up with the latest fashion”, at 25%. This doesn’t automatically suggest that brands should, en masse, raise all of their prices; however, it does suggest that brands are increasingly having a strong impact on the purchasing patterns of youth in the continent and that (as we see often in more developed nations) the less your purchasing power, the more you need a brand to self-identify with a more aspirational quintile.

UnileverAbove: Unilever has introduced many of their global brands, and acquired several local brands as well, to develop a portfolio of over 400 brands sold throughout 190 countries.  Africa is a key growth market for them and they have found the formula (pricing, packaging, distribution, etc.) that works for them to ensure profitability.

But what I find most interesting in the Brand Africa 100 2014 findings is that there is actually an African brand on the list that has secured a spot in the top 50, showing that there is a lot of space for local and regional brands to win back consumer loyalty. MTN has done a wonderful job of this, pairing first class marketing efforts with emotionally-driven local insights, delivering work that helps their brands stand out not as another provider but a trusted ally on the path to economic and personal growth.

A new spot by MTN under their “Welcome to the New World” campaign has launched this past month throughout South and East Africa, called “Moon Campaign.” The commercial is simply wonderful and is a continuation of the work they did last year in Rwanda. Most importantly, this campaign has been aired regionally, contributing to their status as Africa’s most beloved local brand.

Above: MTN’s Recent “Moon” Spot

Above: MTN’s 2013 “Oh The Things You’ll Learn” Spot

What else can we glean from MTN’s “Welcome to the New World” campaign that other African regional brands can learn? First of all, they didn’t get mired in their eternal quest for localization – they found regionally-relevant insights and linked them to their product benefits. In a continent where education is widely praised as a path to self-fulfillment, but often expensive (at least for a quality one), MTN sets itself up perfectly as the answer to every proud parents worries in a developing context: they offer affordable access to a world of knowledge and expertise, from the convenience of a phone. This might not work so well in more developed western societies, where children can easily access this world of information from their local school’s library.

They also used English as the common denominator language, suggesting that you don’t have to localize to the point of making your brand a local name or using the local language for your promo or packaging – you can still have something uniquely “African” that people feel connected to while embracing a more global approach. This is true for all of the competitive set in condoms, such as Durex, Lifestyles, Moods, Ichi-Ban, Contempo, etc. not to mention most global brands being sold throughout the continent.

I will be sharing more African brand campaigns as I discover them and, if I think they can teach us something about how we market condoms to our end users, I will share them.