Posted by Barry Silverstein on December 1, 2010 11:00 AM
It seems as if all the excitement surrounding global brand growth has been centered around China. In the past year, we've reported on everything from China's "Silicon Valley" to the nation's emergence as the new frontier for Western fashion. Similarly, India has gotten a lot of play as an emerging brand powerhouse and marketing hotbed. Even Facebook opened an office there over the summer.
But big brands, perhaps seeing a saturation point looming in those regions, are looking ahead to other growth areas — and putting the African continent on their radar screen. And they don't intend to sleepwalk their way across the continent, as in Coke's tongue-in-cheek Happiness spot above.
Admittedly, Africa's nations present a unique challenge, largely because of political instability and social tensions. Still, Africa holds significant promise for brands like Coca-Cola, Nestle and Wal-Mart. The FIFA World Cup in South Africa this year helped put Africa top of mind with marketers, too.
Coca-Cola intends to spend about $12 billion in Africa over the next ten years, Nestle will invest around $1 billion in three years, and Wal-Mart is bidding on Massmart, a South African retailer.
"Africa is the untold story, and could be the big story, of the next decade, like India and China were this past decade," commented Muhtar Kent, CEO of Coca-Cola, in WARC. "The presence and the significance of our business in Africa is far greater than India and China even today. The relevance is much bigger. Whether the next decade becomes the decade of Africa or not ... will depend upon one single thing — and every thing is right there to have it happen — and that is better governance. And it is improving."
Paul Bulcke, CEO of Nestle, added, "Africa entails some risk because there is tension but ... I see crystallization of some stability. You are going to have countries on this continent that are always accelerating, then pause for a year... But I see good growth potential [among] one billion consumers."
Doug McMillon, CEO of Wal-Mart International, added "We continue to view Sub-Saharan Africa as an important market."
If three such leading global brands are bullish on Africa, others are sure to follow. Yet some companies, such as brand giant Procter & Gamble, are being more conservative. Standa Vecera, Procter & Gamble's GM of southern and eastern Africa, cautioned, "The key for manufacturing is to have stable policies and economies. The worst for us is if we wake up and there is a change in tariffs, or in policies."
But as the world gets smaller and brands look for expansion possibilities, brand marketers may be willing to take a calculated risk to reach a market that represents a billion people and a GDP surpassing that of India. Look for Africa to become the next big thing for brands