Data In Africa
Marketing Data In Africa: The Challenge Persists
By Isaac Ngatia
‘ Having accurate data, especially in many markets across Africa, is a challenge. Many countries within the continent lack robust data’, that’ s a statement I heard over 15 years ago when I started working in research. Unfortunately, the same sentiments are applicable today.
This time I can speak from discussions with market players, experience from providing market reports and even from observations. One example that I usually provide is the phrase‘ Africa has about 1.4billion people with a youthful population of about 65 % below the age of 30 years... etc’. The overhead number sounds quite appetizing to any investor, and several multinationals have used that as a base case for setting foot in Africa. However, after a few years of operations, the said companies exit. This is a cycle, which I have observed. It seems the reality hits home to the corporate HQ when the bottom line and the ROI do not measure to their yardstick.
This scarcity of reliable and up-to-date information continues to pose a major challenge for businesses seeking to enter or expand within their markets. This has consequences for businesses, some of which include:
Inaccurate market assessments: Incomplete data can lead to a misunderstanding of market size, growth potential, and consumer demand, resulting in poor investment decisions. This can lead to lost opportunities as resources are misaligned with the market needs. In some cases, it may overstate the market size, which would be inaccurate without understanding the nuances. Remember the skewed view about the 1.4 billion people as a potential market in Africa? Operational inefficiencies: Relying on outdated information can affect supply chain management, inventory control, and production planning, leading to either under or overstocking, stockouts, and increased operational costs among other challenges.
Competitive disadvantage: Competitors with access to more accurate and current data can gain a significant edge, allowing them to respond more effectively to market trends and consumer preferences. As markets and sectors continue to open to competition, this is becoming a key area of consideration. This helps to avoid one shooting in the dark.
Misguided marketing strategies: Outdated data can cause marketing campaigns to target the wrong audience or use ineffective channels, wasting resources and missing opportunities.
Regulatory and compliance issues: Inaccurate data can lead to noncompliance with local regulations and standards, resulting in legal penalties and reputational damage. This is a crucial factor as more government bodies enforce their regulations.
Overall customer dissatisfaction: Failing to meet customer expectations due to incorrect data can harm the reputation and reduce customer loyalty.
Financial losses: Poor decisionmaking based on faulty data can lead to significant financial losses, as investments in marketing, product development, and market entry strategies may not yield the expected returns.
There are numerous case studies on the continent on each of the above points. While each case is unique, the common denominator is‘ data’. It could either be a case of‘ not joining the dots’, sensemaking or intuitions gone wrong due to lack of sufficient information and context.
Diversity within the continent is a beautiful thing. On the other hand, it requires sufficient resources to have sufficient data that will help businesses make effective decisions.
Local partnerships remain the key to unearthing useful data. As initiatives for regional and continentwide integration continue, understanding the needs of different markets will require us to continuously update the available data.
Leveraging technology either through digital platforms or mobile Apps; big data analytics or real time data reviews are key aspects that can be customized to meet the needs of the business. In addition, investing in data infrastructure, including data collection systems and analytics tools, can provide long-term benefits. Establishing data centres and training local personnel in data management can create a sustainable data ecosystem. For instance, in Ethiopia, initiatives to improve data infrastructure have led to better market insights and informed decision-making.
Isaac Ngatia is a market analyst, based in Dubai, covering the Middle East and Africa region. He is the author of‘ Mwafrika- a book on understanding the people and markets in Africa’. You can reach him on this and related issue via email at: Itngatia @ gmail. com or on Twitter @ IsaacTN.
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