"THE AFRICAN GORILLAS": THE NEXT EMERGING MARKET AND WHY IT IS IMPORTANT IN A SOCIAL MEDIA AGE

THE ‘AFRICAN GORILLAS’: THE NEXT EMERGING MARKET AND WHY IS IT IMPORTANT IN A SOCIAL MEDIA AGE?

           

            American markets are beginning to become saturated. American companies must find larger, newer markets to create the revenue streams their stockholders are demanding. In a globalized economy it is imperative that newer markets become developed.

            Africa has great potential for American entrepreneurs. To create value in emerging markets, ease of use on social media networks has to be either created or developed. The easier that content can be accessed and shared, the more valuable the economic market is going to be.

            Africa has the best potential of any emerging market. Africa is the second most populous continent. It possesses 15% of the world’s market. This continent cannot be ignored if new markets are to be created.

            In the creation of new markets, telecom development is critical. Let’s use the United States as a benchmark.  Ninety per cent of Americans are within 3 feet their phones 24 hours a day. Phones are always “on”. The phone is a critical instrument in marketing products in the U.S. Our smart phones, which can easily access social media networks, make the marketing of products simple. Time and distance are no longer factors in marketing. A product, with smart phones, and social media networks, can be marketed in real time.

            In the same way that the Asian Tigers arose as export-led, middle-income economies in the 20th Century that fueled global growth we are now seeing the emergence of the African Gorillas that have the potential to fuel world-wide growth. A major asset in this growth is going to be social media networks. Social media networks can move content at the speed of thought. Social networks create speed and scale. Social media was not a tool that the Asian Tigers had available to them in the ‘80s.

            Let us look at the telecom networks of Africa.  Telecom is critical in development of emerging markets. Markets revolve on speed. There is nothing faster than texting. People read 90% of their texts. Texting is the equivalent to speaking to someone in real time. Texting is critical in the development of the African Gorillas because content can be now be shared at the speed of thought.

            Telecom companies in Africa have added 316 million subscribers which is more than the entire American population. Because of its telecom development, Africa offers a higher rate of return on investment than any other emerging network.

            The sweet spot for marketers is the 18-32 age group who live in metropolitan areas. This group  is young, growing, and migrating to cities. Today, 40% of Africa live in the city. This is a higher percentage than in India which is seen as an attractive market.

            Workers in cities earn higher pay, and can afford to buy more goods and services than just the simple necessities of food and shelter. Africa is developing a significant middle class. In 2008, sixteen million African household had incomes above $20,000. This level of income allowed Africans to buy cars, houses, appliances, and branded products. Another 27 million households earned $10,000-$20,000.  Another 41 million households reported incomes between $5000-$10,000, the level at which families start spending more than half their incomes on non-food items. The future promises a continued expanded market. By 2020, the total number of households in all three segments will reach 128 million, which will make Africa one of the fastest growing consumer markets in the world for this decade. The African Gorillas are coming of age.

Dean Hambleton

dnhambleton@gmail.com