Marketers, Agencies Eye Booming Africa for Expansion

The world's second-largest continent is no longer the "next big thing" -- Africa has arrived. It's a huge and compelling market, three times the size of China, home to six out of the world's 10 fastest-growing economies, according to The Economist, and home to a billion people, 40% of who are under the age of 50, half of who have a mobile phone and 40% who are living in urban areas. KFC, Walmart, Nestle, Danone and India's Bharti Airtel telecoms are among the companies taking African expansion seriously. KFC currently has around 655 outlets in Africa; by 2020, parent Yum Brands wants to have 2,100 KFCs across the continent. Walmart is in the process of a $2.5 billion takeover of South Africa's largest retailer, Massmart, which has 290 stores in 13 countries around Africa. Nestle recently announced a $1 billion investment in Africa over the next two years. The company plans to build new factories in Angola, Congo, Mozambique and Nigeria with the aim of doubling its African business -- which already brings in 3% of Nestle Group's sales. The activity has spurred a local talent hunt by both marketers and agencies, the latter of which are gearing up their Africa operations. "It used to be that , when clients wanted to work with us in Africa, we'd find a local partner and assign the work to them," said Loris Nold, VP-business improvement at Publicis Groupe . "But when big clients who spend heavily start showing explosive growth in Africa, you want to take control of those opportunities." In January, WPP took a controlling stake in Ogilvy South Africa and acquired 50% of Mindshare South Africa. Last year WPP's TNS bought a majority stake in RMS, the largest custom-research agency in West and Central Africa, and Ogilvy created a joint venture with Kenya-based Scangroup. Publicis Groupe recently changed the leadership at all its agencies in South Africa, filling every position with local talent. In Ghana, Kofi Amoo-Gottfried (nephew of former U.N. Secretary General Kofi Annan) set up a Publicis agency in 2009, which now serves 20 markets in the region. "There's a new breed of marketing talent, and it's increasingly possible to find really good African marketers," said Frank Braeken, Unilever's exec VP North Africa, Middle East and Central Africa. "People are convinced that the continent offers them a future." That's not to say there still isn't a learning curve. Distribution and pricing are, according to Mr. Braeken, "critical acts of marketing" in Africa. There are other challenges, too. When hypermarkets make up only 5% of retail space, promotions are difficult to orchestrate on any scale, so a lot of effort goes into market development instead. To grow the toothpaste market, for example, Unilever is campaigning to get consumers to brush their teeth twice a day; and to grow Knorr -- which is most often used in the traditional corn and beans dish githeri -- it is persuading consumers to use it in other recipes. Unilever has been offering free rides in Knorr-branded buses, during which they tell consumers about the brand's versatility. For the Omo detergent and Sunlight dishwashing brands, they entertain people in open markets with demonstrations and sampling. While billboards, press and TV are still the dominant media in Africa, digital is catching up fast. Undersea cables have been laid down on the East and West coasts, bringing millions of homes online and reducing costs for existing users. Roughly 10% of Africans are online, and in Nigeria the figure leapt from 13% in 2009 to 22 % in 2010, said Benedicte Kodjo, Lowe 's regional business director for North Africa and the Middle East. "Africans are late early adopters," said Rick de Kock, TBWA's director of Africa operations. "Once they get the technology, they run with it."

Marketers, Agencies Eye Booming Africa for Expansion

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