Stylish Africans, Mud Houses, Not-So-Loud Music and the Ability to See Round Corners

A version was published on 17 December 2013 at http://www.businessdailyafrica.com/Opinion-and-Analysis/Consumers-the-main-beneficiaries-as-firms-innovate/-/539548/2114156/-/item/1/-/13c2kb6/-/index.html

There is something in common between stylish Africans, people who live in mud houses (but want to move up in the world), and matatus equipped with Wi-Fi. And this commonality happens to help point to what companies need to do to remain competitive, and how planners need to see round corners. As usual, let me explain.

Japanese electronics manufacturer Panasonic has been well-known in Africa for decades. Its television and stereo models – including those that used to be under the old ‘National’ brand – were mainstays in African homes (my mother still has a Panasonic television set she bought in 1986 – complete with a ‘remote’ control that was tethered to the television set with a cable, meaning that we never lost it). Recently, though, the company has been overtaken by more nimble rivals. First was Sony, whose Trinitron brands were the television sets to have, until even they got overhauled by South Korean brands such as Samsung and LG.

So Panasonic is plotting a comeback. It has exited some slow-moving businesses, absorbed companies such as Sanyo (now there is a brand to warm your cockles if you’re of a certain age), and come up with a renewed push into markets that promise growth such as Africa. The products in this new strategy are interesting ones, which is where the stylish Africans come in. One of the products is electric hair trimmers. Unfortunately for most of the companies that develop such products, hair is not just hair. Male African hair is a special product. Cut it wrong and you will not just leave the man looking silly, but you will also cause him painful pimples from ingrown hair. Recently, the company’s head for the Middle East and Africa, Masao Motoki, told me how Panasonic researchers had to spend significant time in Nigeria’s barbershops, to ensure that they got the product right. The result is a line of hair trimmers specific to the African male customer, and insights about usage that help the company stay competitive in a very promising, but challenging, market.

On to the slumdwellers. Again, companies eyeing Africa have realised that the fortune that is to be made at the bottom of the pyramid (in that overused, but very relevant cliché) cannot simply be grabbed without some hard work and some sturdy gumboots. An interesting conversation brought this out. The CEO of French cement maker Lafarge, Bruno Lafont, stopped over in Nairobi on a tour of some of the company’s branches (of which Bamburi is one). He explained how innovation had to be sought out from the unlikeliest of locations. Lafarge is looking at the frantic wave of urbanisation with great interest. Many of the world’s people are moving to cities, but then ending up in shacks that are barely fit for human habitation. Hence the brainwave: why not mix mud with cement, and solve two problems at once? Mud houses are not very long lasting, yet stone and concrete building blocks are too expensive. Thus the mud and cement mix, which makes the houses better-looking and more durable, but yet is cheaper than more conventional concrete. And, because slums typically have streets that are too narrow to accommodate the lorries that traditionally deliver concrete mix, Lafarge has also developed a distribution system that involves peddlers moving through the slums with premixed concrete in plastic bags (engineers had to develop a slower-drying concrete).

And now, Wi-Fi. If you spend any time in Nairobi, you will realise that it is almost impossible to pry people’s fingers from their mobile phones. Music and social media are driving usage of data on smartphones at unprecedented levels, leading to double-digit revenue growth for mobile phone companies. So Safaricom has gone to where the users are. Trips in matatus, which used to be characterised by people bopping their heads to music, are now full of young people with those heads bent low over their mobile phones. The company is trying to make this easier for them, by providing a free Wi-Fi connection to users, who can then browse to their heart’s content. When they leave the matatu, they will purchase bundles to continue the browsing. And it’s not just about Wi-Fi. Remember the music? The company has also partnered with a DJ who does a monthly music mix that is distributed to matatus. Thus as the passengers (whoever is not busy on their phone) listens to the music (hopefully at lower volume), they receive subtle branding messages from Safaricom.

The three examples are illustrative of how far companies have to go to, not just reach customers, but also anticipate them and how to fulfil their needs. Researchers and marketers are having to develop the ability to see round corners (and down slum streets) in order to remain competitive. And you and I, dear consumer, are the ultimate beneficiaries