The African continent has seen tremendous growth in recent years, this is partially led by the digital revolution and the adoption of new technologies driving African Growth. As the continent’s digital landscape evolves, so does the way that local and foreign companies do business in Africa. Route-to-market strategies are therefore becoming increasingly critical for companies looking to enter and succeed in the African market.
One of the major driving forces of Africa’s growth is the widespread adoption of mobile technology. According to Groupe Speciale Mobile Association (GSMA), a global organisation unifying the mobile ecosystem, the mobile economy in Sub-Saharan Africa is set to contribute $184 billion to the region’s GDP by 2024. With over 800 million mobile phone subscribers and growing, mobile technology is revolutionising the way Africans live, work, and do business.
Africa and e-Commerce Growth:
Africa’s digital revolution has paved the way for new route-to-market strategies that leverage technology to reach customers more effectively. One such strategy is e-Commerce, which has seen significant growth in recent years specifically in the African region. The e-Commerce market in Africa is projected to grow at a compound annual growth rate (CAGR) of 25% from 2020 to 2025, according to a report generated by ResearchAndMarkets.
African Growth and Digital Marketing:
Another route-to-market strategy is digital marketing. With the growing adoption of social media in Africa, companies can leverage platforms such as Facebook, Instagram, LinkedIn, and Twitter to reach their target audience more effectively. Social media has become an essential tool for companies looking to build brand awareness, engage with customers, and drive sales.
In addition, the rise of digital payments has also created new opportunities for companies looking to do business in Africa. Digital payment platforms such as M-Pesa, Paystack, and Flutterwave have made it easier for companies to transact with customers in Africa. These platforms offer secure, fast, and convenient payment options for customers, which can help drive sales and improve customer satisfaction.
However, as newcomer companies navigate the digital landscape in Africa, they must also square up to face the continent’s unique challenges. For example, infrastructure and logistics can pose significant challenges for companies looking to distribute goods and services across the continent. Companies must also consider the complex regulatory environment in Africa, which is region specific and can vary significantly from country to country.
Despite these challenges, the digital revolution and the adoption of new technologies are driving African growth through offering significant opportunities for companies looking to enter and succeed in the market. By leveraging new route-to-market strategies and understanding the unique trends of doing business in Africa, companies can unlock the continent’s vast potential for growth and prosperity.
COMBINING OPPORTUNITY CAPITALISATION AND ROUTE-TO-MARKET STRATEGY TO DRIVE AFRICAN SUCCESS
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A developing economic environment
Sub-Saharan Africa is experiencing steady growth, with a 4% expected annual real GDP growth in 2025. Urbanisation is driving modern retailing, while traditional markets remain an important factor that cannot be ignored. The rise of Africa’s middle class is set to boost disposable incomes by an additional 4% compound annual growth rate (CAGR) until 2030. Key industries such as packaged food, non-alcoholic beverages, and alcoholic drinks can expect to see a rise in sales. The continued growth rate and developing economic environment are also due to the African Free Trade Continent Agreement which works hard towards reducing tariffs and standardising trade policies among member countries. Therefore, making it easier for companies to trade between African countries.
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Digital connectivity
The digital revolution in Africa is leading to targeted and innovative solutions that turn challenges into opportunities. With a surge in mobile subscriptions, connectivity is becoming a lifeline for many Africans, enabling them to make purchases and conduct transactions through secure mobile payment systems. The continent’s lack of legacy systems has become a “testing ground” for digital innovation such as the use of apps that provide farmers with commodity pricing and equipment training. Social media is also making it easier to target consumers and develop partnerships with local inhabitants, highlighting the abundant opportunities for those who understand the complexities of doing business in Africa.
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Localising route-to-market strategies
As this article mentioned afore, developing effective route-to-market strategies is as crucial as adapting to Africa’s ever-improving digital technologies. With 54 independent countries, each having its own cultural attitudes, it’s essential to respect local nuances and business requirements when selling products. No African country operates the same, the target markets and way of doing business vary with each country. To succeed in African markets, companies should consider connecting with informal markets. Through the creation of local partnerships along the supply chain, and by promoting social trust and relationship strengthening, companies stand to inherit more value and rapport as these communities honour honest communication solutions and do not take word-of-mouth recommendations lightly. These recommendations will assist foreign companies entering the African market to overcome distribution challenges and respond flexibly to changing market needs, all while generating a positive consumer response and driving African growth.
In conclusion, Africa presents a range of opportunities for foreign companies willing to invest the time and resources to understand the complexities of the African business market. The digital revolution and growth in mobile connectivity have offered many Africans new avenues for companies and entrepreneurs to engage with consumers and sell products. However, it is important for companies to recognise the idiosyncratic nature of each market within Africa and to focus on developing local route-to-market strategies that respect the cultural attitudes and beliefs of each country into which they wish to expand into. Building local partnerships with market entry service providers such as InterGest South Africa will ensure that companies overcome market entry challenges and gain a greater stake in their business outcomes. With the right approach, companies can capitalise on the growth and opportunities presented by the African market in both the near and long term.
For more information on the services rendered by InterGest South Africa, please send an email to contact@intergest.co.za
Source:
- Digital revolution and route to market strategies will drive African, growth –https://www.euromonitor.com/article/digital-revolution-and-route-to-market-strategies-will-drive-african-growth
- Mobile economy of Sub-Saharan Africa – https://www.gsma.com/mobileeconomy/sub-saharan-africa/
- South Africa eCommerce market size forecast – https://www.researchandmarkets.com/reports/5504330/south-africa-e-commerce-market-size-forecast
