Even from the drive in from the international airport, I felt a buzz. It was Sunday night, in the wee hours of the morning, well after all the church goers had called it a day. And as I drove along the smoky highway, I kept passing bar after dukka after bar with neon lights and the rhythmic thump that signals a good time throughout Africa. The nightlife here in Kampala is alive, no matter the time or the day, and it’s like nothing else I have seen in East Africa yet (very reminiscent of West Africa with a dance party every 20 feet).
With all of this late night commiserating, it’s no surprise that this city of over 2 million (not to mention the other 35 million individuals living outside of the city!) buys a lot of condoms. Current estimates place the total market value of condoms around $5 million annually, which has remained fairly constant since 2011. And the good news is that most of these condoms are heavily subsidized, helping users have access for a very low price – approximately 2300 UGX for a 3-pack of condoms (or about $0.75).
But there is trouble in condom land. Despite the best efforts of social marketers over the past decade or so, the practice of making condoms incredibly affordable has created an expectation economy amongst wholesalers and retailers, where they take for granted the ability to purchase incredibly cheap condoms that offer massive margins (over 200%). Of course, there are very few private sector brands entering into the market place as well, priced much higher than the socially marketed brands, and they seem to be gaining some traction albeit statistically minor. But for the social marketing agencies, times are proving difficult as they try to balance their objectives of reaching those most in need (the lowest two SES quintiles) while recovering some of the necessary costs to operate such an operation. With donor support becoming less frequent, it’s becoming increasingly important for social marketing organizations to fill in the gaps and try to find their own streams of revenue to support their socially marketed condom programs (often from these very same programs).
In Uganda, there are about 19 condom brands, with three main players in the social market space: Protector, Life Guard, and Trust. Protector takes the lion share of the social marketing share, selling in 2013 over 23 million units, while Life Guard and Trust own respectively less and less of the market. But a new player has entered that has me intrigued and is potentially the solution social marketers have been looking for: O Condom.
Launched by Uganda Health Marketing Group (UHMG), O Condom is a black, contoured, and studded condom designed to be a mid-tier compliment to UHMG’s Protector base brand. Its heavily promoted as a classier condom, an affordable aspirational brand in the category, to encourage trade up from the 3 “commodity” condoms (Protector, Life Guard, and Trust) that dominate the bottom of the market. UHMG launched the program to help support their social marketing efforts, as they lose money on every Protector sold, and thus far their strategy seems to be working: since the launch in 2010, they have grown market share steadily to a reported 14% as of 2014. Their price point is 150% of what the bottom three condoms are sold at to consumers, and in so doing the organization is able to generate some program income to cover their operating expenses.
On day one, aside from the other wonderful things I noticed, this resonated: there is room for a mid-tier condom that 1) improves sector sourcing, ensuring those who can afford it trade up to the next tier brand and 2) can ensure sustainability of our big picture objectives, by providing an alternate means to support our heavily subsidized brands so that we can meet the entire market’s needs.
Keep following the story, more developments sure to come as I spend the week in the field learning how PACE Uganda works and what the plans are for the future…