It is an unfortunate reality that despite bold strategies and big ideas, many brands have tried to launch in Africa and failed. Yet, there are some exceedingly successful African brands that have somehow devised perfect models that have allowed them to flourish where others have floundered. What is it about these businesses that has set them on such a prosperous path?
According to Dr Nkosana Moyo, Founder and Executive Director of the Mandela Institute for Development Studies (MINDS), there is a common thread linking many of Africa’s best brands – and it has a lot to do with throwing out the rule book and instead plugging into the needs of the communities they serve.
“There are two brands that stand out for me,” says Dr Moyo – Equity Bank and M-Pesa. He explains that when Equity Bank began, they chose to ignore the path considered by most to be the foundation of good banking practice. “Established banks had a culture of requiring minimum deposits, but when Equity Bank came in, instead they said to customers that however much money they had they were welcome to deposit. As a result, they managed to capture the unbanked community.”
Key to its success was Equity Bank’s non-reliance on these minimum deposits as their primary means of income generation, focusing on transaction fees instead. “If you were depositing or withdrawing money, the bank would levy a small fee on the transaction itself and they could create large revenue pools from that reconfiguration of what banking was all about,” adds Dr Moyo.
Similarly, instead of trying to re-create the environment that had previously allowed similar companies to succeed, M-Pesa assessed the situation in Kenya to devise a fresh approach. Instead of the typical copper-wired, old-fashioned approach to telecommunications, M-Pesa recognised the ubiquity of cellphones and designed its financial platform around this reality. “They looked at their environment and dealt with those set of circumstances instead of wishing they were different from what they were,” he says.
These two success stories stand in contrast with the usual method, which Dr Moyo refers to a simply “lazy” and lacking the courage to recognise that different environments require different configurations of services. “We find it too easy to just copy what is being done elsewhere and imposing that architecture and view of the world on the customer, ignoring the journey they have travelled to get to that point,” he adds.
Furthermore, for African brands to live up to their full potential, it is important not to get caught up in the unfairness of the narrative of Afro-pessimism that we see time and time again from the rest of the world – but rather rise to the challenge. “The problem is that Africa has fallen into a trap,” he explains. “The English language has this beautiful expression: ‘All is fair in love and war’. We may have developed a politically correct vocabulary, but when you look at how we behave, even the most developed country still conforms to this basic idiom,” says Dr Moyo.
He believes that the rest of the world will always behave in ways that put their own interests ahead of others. “We are engaged in a very delicate dance between cooperate and compete, depending on circumstances, so we should not be surprised by or wish this Afro-pessimism away, because it will not go away. We have to earn our way out of it. We should not feel sorry for ourselves. We should just take on the challenge, understand that we can do it and that we better get started on the journey,” he concludes.
