Abuja, Nigeria: In the last two decades, Africa has been hailed as the new market for enterprising businesses. It is the biggest emerging market in the world. This development has been spurred by a number of economic and technological factors. With the growth in internet penetration and standards of living, Africa has been dubbed the next big market.
Technology companies, consumer business and luxury brands are flocking to Africa in a rush to capture the nascent market. These companies are expanding their operations to extend their product offerings to the vast population. I have witnessed this firsthand in my work with startups having helped a good number in drawing up strategic plans for their entry into the African market.
Recently, as my interest in sustainable living has grown, I have immersed myself in understanding the workings of the sector. Naturally, being an entrepreneur, I have focused on the business end of things. In doing this, I have realized that while the world is moving to Africa, eco-brands seem to be left out.
I have put together this article to encourage eco-brands to consider extending their products, services and businesses to our beautiful continent.
So, why should you expand to Africa? Here’s five reasons…
1. Large market size.
Fifty percent of the growth in the world’?s population between now and 2050 is expected to come from Africa. Africa has the youngest population in the world with 40 percent of the whole continent made up of young people aged 15 and 24. These young people are educated, enlightened and internet savvy. As at June 2017, there were over one hundred and sixty million Africans on Facebook, with most of that number using the platform on their mobiles phones.
This growth in population, literacy and internet penetration has been closely followed by increase in spending power. Despite the decline of the middle class, the continent has witnessed a surge in increase of personal income.
What this is means is that you have a vibrant young audience willing to listen and fully equipped with the resources to buy what you are selling. You already have demand, awaiting your supply.
Another key area of advantage is that the African consumer has a deep-rooted preference for goods made by or in western countries. Even though this may not entirely be in the good interest of the economy of the continent, it is the market reality.
2. Skilled and affordable labour.
The sheer number of young people in Africa translates to a massive labour force.
With increased access to the internet, youths have acquired various soft skills. These range from digital skills such as coding and graphic design to tailoring and woodwork. These skills come at relatively lower prices compared to that of which you pay in the developed world, so that you do not have to transplant your employees from your existing operations to Africa.
The overhead cost of operations for your company would be drastically reduced.
3. Raw materials are available.
Africa has the most natural resources in comparison to any continent in the world. Seeing that most eco-brands depend on natural resources and materials to make their products, expanding to Africa will be a huge win for your brand.
A typical example is Shea butter. Nigeria produces more than 50 percent of all Shea butter used in the world. If an eco-conscious brand like Formulary 55 expands their operations to Africa, it will be Shea heaven for their production, pun intended.
The raw materials are cheap and easily accessible. They are so abundant that they are sometimes regarded as waste. Take the coconut shells for instance; they are disposed as waste materials. A brand like Cocobowlzau which makes amazing reusable handcrafted bowls from coconut sells would however find them very useful.
4. The market is educated.
As the eco-friendliness and sustainability of the markets have grown over the years, brands have had the challenge of educating and convincing consumers that organic products are better alternatives to other products that they have been used to. In Africa, the consumers need no convincing.
This is simply because the benefits which the West is only beginning to realize have been known to the African consumer for ages. The products that are now beginning to appear on Western shelves have been in our kitchen for years.
Take activated charcoal which has gained popularity in the last few years. I recently wrote an article for a friend selling activated charcoal on Amazon, trying to convince buyers that activated charcoal can whiten their teeth. Growing up, I routinely used activated charcoal to clean my teeth.
Therefore, an activated charcoal brand does not need to convince me on its uses or potency, rather all they have to do is sell me their own brand.
5. You can make an impact.
If you started your eco-brand to make positive environmental, social and economic impact, then you should definitely head to Africa. The continent is at the frontline of the impacts of global warming, climate change, desert encroachment amongst other challenges.
This means that your presence has the potential to make real impact on real people. Sitting your sustainable garment factory in the cotton-growing village in Kastina, Nigeria can make a lot of difference in the lives of women in that area. Paying fair wages to these women has the capability of creating a ripple effect of increased education for the girl child in the entire area.
This impact also has another dimension; that of setting the right standards and benchmarks. A lot of these business sectors are still in their nascent stages. If your brand goes into these sectors with the right standards, it will set the bar for any others to follow.
In summary, it is true that Africa as a continent faces certain challenges. These include corruption and poor infrastructure. However, the benefits presented by Africa as a market far outweigh these challenges.