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Lack of real-time business data hinders Africa’s growth prospects
By our News Team | 2022
Too many companies looking to expand into Africa do so on the back of outdated, or even non-existent, market research data.
Africa’s potential as a market for new business is frequently misunderstood as there has historically been a dearth of real-time market data. This is according to Africa-based research company, Kasi Insights.
It adds that when asked how many companies in Africa earn annual revenues in excess of US$1-billion, most business executives would typically estimate fewer than a hundred, or even none at all.
In reality, there are more than 400 such companies — and they are, on average, growing both faster and are more profitably than their global peers. More companies are choosing not to enter the vast African market simply because of such misunderstandings.
Local context through real-time data is vital for business success on a complex continent. Photo credit: Tadpolefarm via Wikimedia Commons
“Over the years, any number of multinationals have entered this market in a void of proven data and become unstuck, while a number of African companies have failed to expand [into] new markets due to the lack of data,” Kasi notes in a press release.
Its CEO, Yannick Lefang, says that the food and beverages, beauty and personal care, and financial services sectors are the most data-hungry.
Outdated or non-existent data is a problem
“Companies looking to enter or expand on the continent typically do so on the back of outdated or even non-existent data. Yet their success is dependent on local insight — with 54 countries you cannot generalise,” says Lefang. “Africa is evolving fast and the data has to match this through a digitalised platform.”
Adds Lefang: “Companies that enter the African market and fail, typically do because they don’t understand that each market has a specific context and history. While much may be similar, each has peculiarities and nuances, and so the same business model cannot be applied to each. What has been a huge success in East Africa might not work at all in South Africa. Yet ultimate success might be as simple as a slight tweak to a product or business model.”
For instance, because Africa has such as high penetration of mobile telephony, e-commerce businesses have wrongly assumed they would have a free ride on the continent. Lefang says that the context was missing, and businesses failed to account for various factors which considerably brought down that penetration level and reduced the potential business opportunity.
“Massive amounts of money were invested in a ‘huge’ market that turned out not to be so huge at that point. It will grow, but not as fast as was thought,” Lefang concludes.
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