The Villager

How Africans Consume Brands

Feyi Olubodun

• Publisher: Tracey McDonald Publishers
• Year: 2018
• ISBN:
  9780620762595
• Topic: Business
• Subtopic: Consumer Behaviour
• Index: Business

The Villager is essential reading for brand owners wishing to conquer new markets.

When Feyi Olubodun, CEO of one of West Africa's leading creative agencies, witnessed one too many cases of brands failing in the African marketplace he began to ask himself questions: Why did brands, both global and local, so often fail to connect with the African consumer? And, what was it about the African market that brand owners were not seeing?

He began to reflect on his own marketing experiences and out of this emerged the framework for The Villager. In Feyi's view, the African consumer begins his life's journey by moving from the village, his rural dwelling, to the city, carrying with him not only his own dreams but also the dreams of his community. He is a highly aspirational consumer, motivated to succeed, and he becomes the economic portal for the rest of his community back home. But although he may be exposed to global influences and technology, his essential identity remains largely intact. This is why Feyi calls the African consumer a Villager. The Village is no longer a physical space; it is a psychological construct that defines him and the filter through which he engages with and consumes brands.

In developing his construct, Feyi posits that if you wish to engage successfully in a market you may not understand, you must have the right lenses to view a people. He believes the secret lies in applying these lenses at the confluence of commerce, culture and consumer. Data is not enough to understand the vagaries of a particular market. Drawing on his wide experience and wealth of astute observations, he provides a highly readable and indispensable guide to the mindset of the African consumer today, yet it is true to say that his insights apply, albeit in a more nuanced way, to consumer behaviour across the globe.

1

WHY YOU NEED AN AFRICA STRATEGY

Occasionally, when I want to satisfy my academic curiosity, I spend some time researching topics like ‘International Marketing’ or ‘Global Leadership’ or ‘Multinational Leadership’. In my research on these topics, an interesting pattern has begun to emerge.

There are very few academic institutions/bodies studying Africa, or even interested in studying the continent. The Western concept of international marketing is still largely focused on Asia, with China at the centre. This is clearly influenced by the US with its strong trade relations with China. This view of what is ‘international’ is largely influenced by the US, having given the world most of the fundamental orientation on how to do business. In some cases, American businesses extend their view of ‘international’ to include Europe. European companies, however, tend to have a more expanded view that includes continents like Africa.

This is why most of the multinational corporations actively playing on the continent are mainly European companies. According to Infomineo, a business research consultancy with a focus on the MEA (Middle East and Africa) region, France and Germany are the leading countries in terms of coverage rate within the region by Fortune 500 companies. Most Fortune 500 companies still prefer to run their regional operations out of London, Dubai and Johannesburg, with growing interest in Casablanca and Lagos as sub-regional offices, especially for technology companies. The data shows that while there’s increasing interest in Africa year on year, most Fortune 500 businesses are still hesitant about the region. The global world view on Africa may have some influence on the global business strategy for most companies.

Should any business be interested in Africa then, even a business with a strong international drive? And when they are, is South Africa, represented by Johannesburg, enough?

Paul Polman, CEO of Unilever, believes that businesses should develop a strong interest in developing markets and plan to win in those markets. In a recent interview by Elliot Wilson of EY Tax Insights magazine, Polman pointed out that within three decades 80 per cent of the world’s population will live outside the US and Europe. He shared his view that the firms that will capture future growth will be those well positioned to meet the needs of these emerging economies.

Is there any incentive to develop an Africa focus in your strategy? Or even to boldly develop an Africa strategy as part of the long-term horizon of any major company in the world today?

I strongly believe there is, and not just based on surface considerations. I also believe that a country such as Nigeria would serve as a better proxy or template than any other country from which to frame an Africa perspective. That said, I strongly believe that any company without a well-developed and fluently executed Africa strategy is not well positioned to compete globally in the medium to long-term horizon.

Some of the biggest questions I encountered in writing this book were:

• Why did you choose Nigeria as a proxy for Africa?
• Why should anybody be interested in Africa?
• Is such an interest worth the involvement of time and resources?

I anticipated these questions, because they often pop up when I share my views on the African Consumer in different countries. The ideal approach would be to coalesce information from different countries and then analyse them for some kind of pattern and trend. The process is familiar and very quantitative, and it is the ideal approach. However, I have used the country as a proxy for two reasons, neither of which is the fact that I am Nigerian by birth and upbringing, albeit with a Global Executive MBA from the Duke University Fuqua School of Business.

The first reason is rooted in my training as a researcher which was always to take a sample that was representative of the total population under study and then extrapolate from that to the larger population. If the sampling was right, then the extrapolation would be correct within a reasonable degree of error. The principle behind this was simple – the right sample would have, on a microcosmic level, all the components of the larger population. To understand the smaller sample then, was to understand the whole universe. I believe there are critical components of Nigeria as a nation that lend tremendous representative value for her to be used as a reference for understanding the African Consumer. Nigeria as a country is a fantastic mosaic, from which a perspective on the rest of the continent can be developed. This is true when you look at the numbers in the country. This is true when you look at the soul beneath the country. I will show you a glimpse into both, and then we can look at the African Consumer proper. But first let me tell you the second reason.

It was October 2015, and I was going to speak on the African Consumer in Johannesburg, South Africa. I had been given the opportunity by Kevin Tromp, an incredible man who at the time was the CEO for the Publicis Africa Group. I had previously spoken on the African Consumer in Europe, France and the UK, but this was my first time in Africa itself.

I delivered my presentation over two sessions. One session focused on how the framework could be used for brands and marketing, which is the primary focus of this book. The second session focused on how the same framework could be used to develop a management style by multinational business leaders responsible for African markets, especially when they have to drive an innovation agenda. That is a separate conversation outside this book. Now there was a gentleman in the audience who was also a renowned speaker on the South African consumer. His name is GG Alcock and he had authored a couple of books on the subject. It so happened that he had given a talk on the African Consumer, drawing from his experience activating brands across Southern Africa. Well, after his session, a mutual friend approached him and told him, ‘You need to talk to Feyi, both of you are saying the same thing.’ So GG and I met, compared notes, went to Dubai to co-present at the 2016 Dubai Lynx, and have since then become friends. This experience and my interactions with GG Alcock provided validity for my views of the African Consumer, from face validity, content validity and construct validity perspectives. How else do you explain a South-West Nigerian and a white South African raised by his parents in a Zulu hut sharing the same perspective, albeit using different lenses?

Now let me take you beneath the skin of Nigeria.

Nigeria: by the numbers

As a young boy, I grew up being told that Nigeria was the giant of Africa. I remember being told to pray for South Africa during apartheid. We took Social Studies classes, where we were informed about the economic stature of Nigeria. I never really grasped this until I began to look at the country. Even today it can be quite a difficult concept to grasp, if you look at the Western reportage of the issues in the country. However, if you look at the numbers presented by independent sources, you can see why.

Currently, Nigeria is Africa’s largest economy with an estimated rebased GDP of $510 billion. According to McKinsey, if the country’s potential is optimised, it could become a top-20 economy by 2030, with a GDP of more than $1.6 trillion. By population size alone, it is Africa’s most populous nation and has been so for a long time. The UN estimated population of Nigeria, exit 2017, is 192 million, making the country the seventh most populous in the world. With the current birth rate, an average of 4 per household, it is estimated that Nigeria will have a population of 273 million by 2030, which is almost the current population of the United States. By 2050, the country’s population will outstrip that of the estimated population of the United States, and will account for approximately 25 per cent of the population of the continent of Africa.

The way I like to describe the population of Nigeria is this. It is simply a country with the population of Russia squeezed into a land mass twice that of California and four times that of the UK, and with a birth rate that adds the population of Romania into the country every year. Simple, isn’t it?

And there are more numbers worth considering.

Though she has an under-development profile that mirrors much of the continent, with more than 40 per cent living below the poverty line, Nigeria has one of the fastest growing consumer segments on the continent. McKinsey estimates that Nigeria’s consumer market is presently worth nearly $400 billion per year, with the potential to reach $1.4 trillion per year by 2030.

A lot of reportage tends to give the impression that the country is largely dependent on oil, and therefore under the curse of the black gold. However, the recent rebasing exercise revealed that the country is well diversified compared with other oil-producing countries, from having the largest body of fresh water fish in Ondo State, to the huge potential to be the largest exporter of palm oil in the world. It is the same country that gave Malaysia palm oil seedlings in 1960, a gift that has helped Malaysia to become one of the largest exporters of palm oil in the world.

I recall walking the streets of the village of Awe in Nasarawa State and noticing solid salt plates near the ground. In fact, it has a diversification profile that is similar to that of Russia (Nigeria’s resources share of GDP by 2013 was 14 per cent, while Russia’s was 11 per cent), with GDP growth driven largely by Agriculture and Services. The country’s significant dependence on oil revenues is mainly due to a history of bad leadership, corruption and public sector mismanagement, which again is a good reflection of most countries on the continent.

There is another number that is very striking about Nigeria, and makes the country suitable for our study.

That number is 70 per cent, which is the population of Nigerians below the age of 35 years. This is an incredible number, as Africa is the youngest continent on the planet by demography. In fact, the top 20 countries that have the highest population under 15 (accounting for an average of 50 per cent), are all African countries, with Nigeria being number 15 on the list. This is too powerful a metric to ignore. The youth of Africa are not only its future, but are also globa...