The informal economy is Africa’s new frontier for growth. Previously forgotten and disregarded the informal economy on the continent is alive and growing into a significant contributor to the bottom line for many businesses. This is where the next surge of expansion is and if you are not playing in this space then you’re missing out.
Africa has a massive emerging middle class which provides an expanding consumer base for business. In a recent Africa Pulse Report, the World Bank said consumer spending accounted for more than 60 percent of Sub-Saharan Africa’s buoyant economic growth with a forecast that this would accelerate to more than 5 percent over the next three years, far outpacing the global average.
A local approach to marketing
Understanding the African consumer is key to the success of brands doing business on the continent. Multinational brands cannot adopt a cut and paste approach to marketing locally. Although Africa is a huge continent it is made up of small cluster communities whose buying trends and behavior are unique. There has been a complete shift in the go to market strategies of companies.
Although many are still struggling financially, Africa’s population remains very aspirational. From the latest fashion labels, mobile phones to banking services and food brands, cars, food, and clothes to financial services and entertainment, it is at the bottom of the pyramid that businesses need to invest in having conversations with this group of consumers.
The classical approach of kicking off a marketing campaign with above-the-line (ATL) – a major television or radio advertisement, then erecting a billboard and after that generating below-the line (BTL) initiatives based on the ATL concept is no longer the norm. Just five years ago 80% of campaign budgets were allocated to television adverts and billboards but now the trend has shifted to BTL – in-store promotions, out-store promotions and field-marketing.
The use of community members as brand ambassadors and sales promoters in peri-urban and rural areas is a growing trend. This business model is changing the marketing landscape. Its success in using field operatives to market brands to their own communities on a mass scale is causing brands and advertisers to commit more of their funds to activation projects than above the line advertising.
Today’s marketing is more about dialogue than one-way communication as represented by above the line advertising. In developed societies, the dialogue tends to happen online or via smartphones. In African rural and remote communities, it happens face to face. And the dialogue is not just with and within consumer communities. It flows back into the brands.
The Creative Counsel Group is an integrated below-the-line agency that offers brand activation and experiential solutions for brands. Ran Neu-Ner and Gil Oved are the group’s Co-CEOs. Follow them on Twitter @TCCZA.