Penetrating the African Market: Localization Best Practices

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Africa Is Open For Business

In recent years, many global markets have been steadily implementing new business reforms to improve their “Ease of Doing Business” (EDB) World Bank ranking. The EDB ranks economies on a scale from 1 to 190 – the higher the ranking, the more conducive that region is to doing business. For the Sub-Saharan African and North African regions, as well as for some smaller African economies, new EDB records are being set:

Whether you are an entrepreneur, a small business, or a large corporation looking to expand into Africa, the continent has a lot to offer. However, if you truly wish to succeed in developing long-lasting business relationships in various parts of the African continent, you must be willing to learn and understand the continent’s unique business intricacies.

Africa is Home to Six-Tenths of the World’s Fastest-Growing Economies

According to the 2018 International Franchise Attractiveness Index, China is ranked as the country with the highest market potential in the world. However, several countries in Africa are beginning to attract a great many global players – and rightfully so. Many African countries now offer more accountable governments whose economic policies favor and encourage international trade and investments. With a positive entrepreneurial spirit throughout the continent, coupled with a growing population of mobile users, companies are seizing the opportunity to partner with local African businesses. Perhaps even more inviting is Africa’s strengthening economy and its very “young” population. Africa is home to:

  • Six-tenths of the world’s fastest-growing economies
  • The world’s fastest growing population
  • The world’s “youngest” continent

Over 50 percent of Africa’s population is expected to have discretionary income by 2020. With an increasingly young population and a steadily growing economy, the time is right for companies to consider doing business in Africa. But just as the old adage goes, “failure to prepare is preparation for failure,” if you are planning on expanding into the African marketplace, there may be a few things to consider before making your first move.

With a formidable presence in the United States, Latin America, Asia, and Africa – and with over 16 years of experience – Akorbi has learned a thing or two about global expansion. We have worked hard to earn a reputable name around the globe, but this didn’t happen overnight, and it certainly didn’t happen without careful consideration and strategic planning. So, just how did we do it? We did our homework and we focused on localization best practices.

Akorbi is honored to share with you our five key steps to expanding your business into Africa.

5 Key Steps to Successfully Penetrating African Markets

 

Step ONE: Lay The Groundwork

Performing a market analysis should be at the top of your list. A market segmentation analysis will help you determine whether or not your services will sell in your target market. First, find out if there is even a demand for your services and whether or not local businesses in the target market are already successfully filling that demand. Next, determine how big (or how small) the local market is. A significant part of laying the groundwork should also involve running a SWOT analysis (strengths, weaknesses, opportunities, and threats) to not only evaluate your competitive position, but to help you better define your overall strategy.

Step TWO: Develop A Localization Marketing Strategy

It isn’t enough to take your current business model, package it up, put a shiny new bow on top, and sell it to your new target market. In fact, this approach could have your global expansion plans screeching to a sudden and permanent halt. Instead, begin to develop a localization marketing strategy that aims to meet the target market’s unique cultural, economic, and government regulatory requirements. Your business plan needs to incorporate a localized approach while maintaining your business’s objectives. Here are just a few localization best practices to get you started:

  • Visit the local market and begin to build relationships with those who will be an intimate part of your business operations (suppliers, labor unions, partners, etc.)
  • Research the political, social, and cultural climate of your target market
  • Work with local subject matter experts (SMEs) to ensure your marketing message is culturally and linguistically appropriate
  • Engage the services of a multilingual contact center that offers professional language support during your peak or off hours
  • Modify your graphics, videos, and/or any other visual components to align with local market best practices
  • Adapt the local market’s currencies, units of measure, etc.
  • Ensure legal compliance with the local and regional governments

Step THREE: Respect Cultural Sensitivities

Respect

Although this might seem obvious to many, the word “respect” means different things to different people. Not only does each company build its own culture of respect, so does each country. When it comes to doing business with any country in Africa, study the country’s definition of respect and apply its principles to your long-range plans.

Africa is made up of 54 countries, spans 30 million square miles (48.3 million km), and is home to arguably as many as 3,000 living languages. With this kind of diversity, it’s understandable that each African country also has its own unique identity, culture, and way of life. Taking the time to study the African region with which you plan to do business and learning about their day-to-day business practices (including formal greetings, business etiquette, and appropriate business attire) will go a long way for first impressions.

Cultural Sensitivity

Some might see this as an extension of respect, and although to a certain degree it is, cultural sensitivity requires unique preparation. In order to fully understand a community’s culture, it is imperative that you learn about their past, their social, political, and economic struggles, and their desires to have their cultural identity recognized, respected, and preserved.

Companies wishing to penetrate into a specific African market should spend a considerable amount of time doing their cultural homework. How does the community identify? Which languages do they speak? Which languages do they prefer to speak? What are the social norms, the major ethnic groups, religions, and belief systems? Failing to do this homework could spell disaster for your company’s name and brand.

Step FOUR: Rethink Your Sales Strategy

Over the years, Akorbi’s CEO, Claudia Mirza, has become well-versed in the African market landscape; a landscape that excels in consultative sales. Claudia explains that there is a great deal that American businesses can learn from the African strategic approach to negotiating:

“Africans are expert negotiators. They have mastered the art and science behind consultative sales. This is just part of their daily lives. Americans stand to learn a lot by placing more of an emphasis on this method and less of an emphasis on the traditional selling model.”

The traditional sales model is gradually becoming a thing of the past. It focuses too heavily on aggressive and unrelenting selling, and pays little attention to building relationships. Where the traditional sales model focuses on making the sale, consultative sales – or “relationship selling” – focuses on building, enhancing, and maintaining relationships.

For those wishing to succeed in African markets, you may wish to follow the relationship sales model. Always start every new intake session by asking a series of discovery questions that will help you become intimately acquainted with the customer. Taking the time to truly understand the customer’s pain points, their short-term and long-term goals, and the challenges they face is critical to building solid, trusting, and long-lasting relationships, but that’s just the foundation.

You also have to be prepared with a recommendation and present a solution that effectively addresses the customer’s concerns. The recommendations you offer and the solutions you propose should highlight your company’s differentiators and showcase your strengths above the competition.

Step FIVE: Rethink Your Procurement Management Strategy

You may already have an impressive background in procurement management and may even regard yourself as somewhat of an expert, but Akorbi’s CEO, Claudia Mirza has news for you:

“Corporations talk about corporate responsibility, but are they really passing that information on to their legal teams or purchasing organizations? Too many contracts show no regard for the wellbeing of small businesses from whom corporations are procuring services, nor for the continued problem of minimum wages.”

The African marketplace is no stranger to struggles with procurement management. Over the years, African procurement management practices in general have shown little to no regard for cultural sensitivities nor for environmental, political, ethical, and socio-economic structures of various countries. But significant gains have been made in recent years thanks in part to intervention programs initiated by the African Development Bank (AfDB) and the World Bank. Both institutions “… assist developing countries to review and revise their procurement structures and systems.”

Several African governments are now encouraging competition, improving accountability, and strengthening financial transparency with the implementation of procurement management reforms. If you are preparing to negotiate your products or services anywhere in Africa, you may need to rethink your procurement management strategy. Study the progress that your target market has made in the area of procurement management and partner closely with them if you want to lower your risk of failed business transactions and increase the chances of profitability.

Real Opportunity Awaits You

For companies working to better align themselves in Africa, it isn’t enough just to ensure your goals are achievable and measurable – and it isn’t enough just to build in milestones to regularly check progress. Successful penetration of the African market really boils down to localization best practices. If you invest wisely in localization marketing and follow Akorbi’s 5 Key Steps for Penetrating the African Market, real opportunity awaits you.

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