Is Sub – Saharan Africa ready for innovation?

My last blog was a teaser on what I believe makes the Sub Saharan africa ripe for investments today….the time tested and proven adage of “first mover advantage” will hold true here in this forgotten part of the world.

The likes of standard chartered bank, the unilevers, the cadburys, the nestles, the P&G of the world who have crossed the Rubicon and dared to invest in the economies of the sub – saharan geography will reap rich dividends (if they are already not doing so!) in times to come and they will become barriers to entry of others in their respective domain.

Surprisingly it wont be government policy that will pose barriers to entry into these promising markets, but the lack of foresight from potential investors and their inablility to bite the proverbial bullet!!

its time to act people…..

and while I am on the subject of investing in africa today….I am sure many of those at the highest decision making levels would still be wondering on whether their investments will offer returns in the long term?

they are right…

simply investing in these markets will not be enough…a well thought out strategy, supported by foresighted managers and leader will be key.

This begs a question….what sort of strategy would work here?

While we are all aware of the 4 different types of strategies; I am personally biased towards a strategy that will ride on the ability of the investor to have the capacity for executing disruptive innovation in product design and systems.

Let me explain…

across this region there are obvious common facets that are observed in these economies…be it Nigeria, Ghana, Togo, Benin, Cameroon…..the list goes on….all these economies fare poorly on the global governance index, lack basic infrastructure, are home to some of the largest number of poor in the world.

But the resilience of these “poor” consumer is note worthy and thats where the opportunity lies for the investor.

The investor will have to necessarily look at offering their brand of product and services at a price point where these “poor” consumers will be able to afford them….thats calls for a disruptive innovation thinking approach.

they will necesarily have to think out of the box in trying to develop optimum logistics to get their products and services at minimum cost to their target consumers- which calls for disruptive thinking.

while doing these, they will still have to be innovative in financing their operations such that they target maximising their revenues at the least possible cost-again it will take a different mind set, an innovative creative mind to develop a buisiness plan based on these stringent parameters.

off course this market is not for the faint hearted, but for those who seriously seek to challenge their managerial and thought leadership capabilities and believe in the capitalist model of “inclusive sustainable growth” without doing charity!!

based on what I have discussed in brief, I personally believe that a good entry strategy for these markets would be a mix of the leader, challenger and nicher variants, and certainly not the follower strategy.

as a leader , you will have to demonstrate courage of conviction in leading investments with your products and services into these markets, thereby challenging the others who are sitting on the fence, and target a niche market for your branded products and services…

Innovation will be key success driver…but we must ask ourselves…is Sub Saharan Africa ready for innovation?

I believe it is and there are many examples to support this claim…

the detergent market in Nigeria is one prime example…it is a mature market today and this maturity has taken place over the last 15 years at a rapid pace.

The first mover in the innovation game was Unilever who launched their OMO ddetergent in an SKU of 35g and differentiated their product from others by offering a “white” detergent as opposed to other offerings in the market, which were all “blue” detergent powder. The consumer across demographics was successsfully convinced of the “superior” performance of the “white detergent” versus that of the blue detergent through a brilliant marketing campaign. The packaging and the product differentiation disrupted the market and others had to follow suit…in the meantime, OMO became the category leader.
It took competitiors 10 years to catch up, and today one only has to look at the innovations being offered by the likes of EKO Resources (SO Klin detergent) to understand what the category is like in Nigeria.

So Klin detergent is offered in SKUs of 15g, 30g, 65g, 76g, 100g, 200g, 450g and 1 Kg…and it has recently launched detergent with Triclosan..anti bacterial properties in a detergent at the same price point as a normal detergent!!

despite this level of competition and communication clutter in the market, capacities are being added in this category…some of the largest are with RIVOC, PZ etc…..

in my next blog I would discuss whether the indian informal system of innovation “JUGAAD” would find takers in Sub Saharan africa….

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