The Pitfalls of New Markets
South African businesses wishing to expand into Africa should take heed of how the pioneers have fared. Truworths and Woolworths — not so good; Shoprite — not too bad.
Nigeria, Ghana, Kenya — yes, these are great growth markets, but — and this is a big but — they have to be approached with caution and insight. Caution, in not assuming they are anything like what we are used to in SA, and insight, in finding the right people on the ground to advise and negotiate.
In this article for AFKInsider, Anna B. Wroblewska examines the failures of Woolworths and Truworths in Nigeria, and contrasts it with the success of Shoprite, which celebrates 10 years in the country.
For a more in-depth insight into the retail environment, Nicholas J.W. Kühne CM (SA), founder and CEO of Wunderbrand, a pan-African brand consultancy, writes in howwemadeitinafrica.com about some of the factors that marketers in the retail space in Africa need to consider. His main takeout:
I believe that Africa will not have the same trajectory as Asia, as we are not creating the right type of jobs. This in turn impacts upon the size and growth of the middle class, which in turn means that the opportunity is not as great as economists or financial advisers simply looking at demographics or lazy references to Asia deduced.
Plenty food for thought, for those in the retail space.