Africa Focus
Africa Focus
ENTERING AFRICA
Sebastian Meitz outlines lessons from emerging markets to inform a move into Africa
Nine miles. That’ s all that separates Africa from Europe in the Strait of Gibraltar. However, it’ s not only geographical proximity that Africa and Europe, especially Central and Eastern Europe, have in common. The two continents share more than you might initially think.
After emerging from communist rule in 1989, Central and Eastern Europe was perceived by many Westerners as the land of massive opportunities, growth and potentially high returns on investments. They’ re characteristics that describe today’ s Africa equally well. The transition economies of Poland, Hungary, the Czech Republic and the Baltic States attracted foreign investors and looked for the best and most efficient ways to develop. Also, the gambling industry came into the spotlight of international players who were ready to jump on the growth bandwagon.
While closely observing and taking part in the growth of the gambling industry in Central and Eastern Europe, we identified several aspects that need to be considered when working in emerging and transition economies.
Strategic sustainability Market attractiveness usually connects with a rapid inflow of capital seeking to gain high returns on their investments. In industries as vulnerable as gambling, where the general population is one of the critical stakeholders, finding the right balance between increasing profits, regulation and consumer protection should be a priority for management teams.
Adapting an effective sustainability strategy demonstrates not only compliance in the highly regulated market of gambling, but also increases a company’ s reputation in the eyes of society.
Cultural awareness One of the most widespread and often made mistakes is ignoring the culture of the targeted population. The fact that a particular game works well in some countries doesn’ t necessarily mean it will succeed elsewhere. The way somebody lives and spends their free time impacts customer behaviour and their preferences.
Merely transplanting a market strategy or product without first considering the cultural aspect, has often proven to be inefficient
Sebastian Meitz is co-founder and managing partner of Gaming 5.0. He has extensive experience in gambling and management consulting. Gaming 5.0 works hand in hand with C-level executives and their teams on strategy, products, and business processes, helping their companies thrive.
and resulted in a lack of interest and brand deterioration. A wrongly positioned and placed product can quickly turn into a waste of time and energy.
Regulatory changes One characteristic of emerging economies is changing regulation. Under the influence of political agendas, external stakeholders or by emulating solutions from other countries, regulators tend to either under- or overregulate gambling markets. The former leads to a rapid development of grey or even black markets, negatively impacting people and the industry. Meanwhile, the latter often results in introducing legislation that makes it impossible for companies to grow or even function.
In both instances, regulators find it extremely difficult to take advantage of a healthy development of the gambling industry. Finding the right balance between liberalisation and control is a process in which both the regulator and operators should take an active part.
Applying best practices The list of essential elements required to achieve success in emerging and transition economies goes beyond strategic sustainability, cultural awareness and regulatory affairs. Central and Eastern Europe, as well as other emerging and transition economies in Europe and Asia, can serve as an excellent source of best practices relevant to today’ s Africa.
Adapting and applying them according to your needs will be more efficient with an experienced and battle-proven partner.
iGamingBusiness | Issue 112 | September / October 2018 77