Copyright ©2012 The Nielsen Company. Confidential and proprietary.
TURNING OPPORTUNITY
INTO POSSIBILITY
Dwight Watson
Managing Director Africa
Nielsen
1
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
AFRICA IS A BIG BET
$
Complexities vs. opportunity make
the ROI tough, but long term the
expectations are high and
therefore the bet is a necessity
from a global stand point
2
CHALLENGES OF DOING BUSINESS IN AFRICA
Economic Risks
high inflation
Sociopolitical Challenge
ineffective governments
inadequate infrastructure
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
skills shortages
stop-go policies
volatile currencies
high taxes
Weak fiscal and monetary policies
poor regulations
high corruption
undemocratic
Repressive governments
authoritarian
labor union issues
3
DON’T EXPECT AFRICA TO FOLLOW THE SAME PATH
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Points of Diversion
<100m road per sqkm land in Africa vs 400m in China and 1,500m in India
46 checkpoints on the road from Lagos to Abuja
20 days for a container to travel from Mombasa to Kampala (925km) vs 10 hours in Europe
4
ANOTHER EMERGING MARKET MIDDLE CLASS
The size of the opportunity is tremendous
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
African Middle Class 300-500m people
5
THE WORLD POPULATION IS GROWING RAPIDLY
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
But not evenly
1950
1975
2000
2025
2050
2.5bn
4.1bn
6.1bn
8.0bn
9.2bn
Source: World Bank and United Nations
6
TIPPING POINTS FOR THE FUTURE
$1.6 trillion
Wealthy Elite
Mass Urban Market
($1,623
p/capita)
Variable Potential
Poverty Stricken
1bn
POPULATION
tomorrow
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
today
The geometrics of the CPG basket
Wealthy Elite
INCOME
BASKET SPEND
$2.6 trillion
(+63%)
Mass Urban Market
Variable Potential
Poverty Stricken
1.3bn
($2,000
p/capita
+23%)
7
NIELSEN IN AFRICA
Tunisia
Morocco
Egypt
Algeria
Senegal
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Monrovia (Liberia)
Conakry (Guinea)
Freetown (Sierra
Leone)
Ouagadougou
(Burkina Faso)
Bamako
(Mali)
Niamey N’djamen
(Niger) a
(Chad)
Nigeria
Porto
Novo
Lome (Benin)
(Togo)
Libreville( Gabon)
Brazzaville (Congo)
Ethiopia
Bangui
(CAR)
Democratic
Republic of
Congo
Angola
Zambia
Uganda
Ken
ya
Kigali (Rwanda)
Bujumbura (Burundi)
Tanzan
ia
Malawi
Mozambique
Harare (Zimbabwe)
South
Africa
Retail Audits
New Retail Audits
New City Retail
Capabilities
8
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
MOVING into AFRICA PLAN
MARKET
POSITION
CONSUMER
PROPENSITY
MARKETING
RESONANCE
RETAIL
REACH
9
MOVING into AFRICA PLAN
City Concentration
Income
& Spend
Demographics
Segments
Lifestyle
Urbanisation
Behavior
MARKET
POSITION
CONSUMER
PROPENSITY
MARKETING
RESONANCE
RETAIL
REACH
Population
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Youth
Media (OOH, broadcast,
digital)
Messages (word of mouth)
Infrastructure
Trust (retail,
advertising,
consumer)
Mobile
& Social
Product usage
Regulation
Supply Chain
& RTM
Ease of doing
business
Role of
price &
Size of universe
promo
Channel Structure (modern vs traditional)
10
Positioning /
Affordability
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Advertising
Which
Country
Which
Consumer
Group
Which
Brand
Which
Stores
RTM
OOS
Price
(management)
11
Positioning /
Affordability
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Advertising
Which
Country
Which
Consumer
Group
Which
Brand
Which
Stores
RTM
OOS
Price
(management)
12
LARGEST OPPORTUNITY WITH LOW TO MID INCOME COUNTRIES
Population1 vs GDP per Capita2 across African countries
180
Nigeria
160
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Population
140
120
100
80
Ethiopia
DRC
540 million consumers
23 million consumers
53% of Africa’s population
2% of population
24% of Africa’s GDP
6.7% of Africa’s GDP
60
Tanzania
Kenya
Uganda
40
Mozambique Ghana
Cameroon
20 Madagascar
Zimbabwe Zambia
0
0
1000
2000
Low
•
•
Angola
Namibia
3000
4000
5000
GDP per capita ($)
Botswana
6000
MID
Avg. African country Middle Class population is 7m people,
1/5 of the Polish or 1/3 of the Romanian population
7000
8000
High
13
FMCG Industry Interest
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
PRIORITIZATION OF COUNTRIES AND FOCUS
High
Med
Low
Low
Ethiopia
Congo, DRC
Zimbabwe
Malawi
Burundi
Niger
Ghana
Nigeria
Kenya
South Africa
Senegal
Zambia
Cote d’Ivoire
Uganda
Tanzania
Mozambique
Angola
Cameroon
Lesotho
Sudan
Rwanda
Botswana
Namibia
Swaziland
GDP / Capita
High
No greater need to make the right bets
14
AFRICA IS NOT UNIFORM
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Populations are concentrated and countries different
Population (Afripop)
GDP per capita (World Bank)
15
SUB SARAHA PLANNING PRIOCESS
City level plans
30 cities
8m
120k
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17
800k
32m
13
Population (Afripop)
Cities
Population
Stores
16
THE SPECTRUM OF AFRICAN CONSUMERS
40% population live in cities, 80% GDP is in the cities, 52 cities with >1m people
PROGRESSIVE
AFFLUENTS
TRENDY
ASPIRANTS
BALANCED
SENIORS
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
STRUGGLING
TRADITIONALS
8%
20%
high
11%
19%
AFFLUENCE
EVOLVING
JUNIORS
WANNABE
BACHELORS
FEMALE
CONSERVATIVES
21% 12% 9%
low
Source: Nielsen Emerging Market Insights
17
CONSUMER SEGMENTS AND SIZE ACROSS AFRICA
15 Country Overview: Emerging Market Insights
AFFLUENT TIER 1
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
TRENDY
ASPIRANTS
20%
• 15-29, single, largely male
• Middle SEC, urban
• Educated secondary school
and above
• Modern: interested in fashion
and technology
PROGRESSIVE •
AFFLUENTS
•
•
•
8%
•
30-45 years, married
with children
Higher SEC, urban
Well educated,
managerial jobs
Family is important but also
tends to be very individualistic.
Buys on impulse. Will pay
more for better service
Source: Emerging Market Insights Consumer Survey, 2012
LESS AFFLUENT TIER 2
STRUGGLING
TRADITIONALS
• 30-45 years, married
with children
• Low SEC, peri-urban,
mostly women
• Hasn’t completed
secondary school
• Also focused on
availability
• Less brand conscious
11%
BALANCED
SENIORS
•
•
•
19%
•
20-45, married with
children
Across all SEC
Studied secondary
school and above
Open to
recommendation
LESS AFFLUENT TIER 3
WANNABE
BACHELORS
12%
EVOLVING
JUNIORS
21%
• 20-34, young
and single males
• Mix of blue collar and
supervisory level jobs
• Social - like to be
with friends
• More open to advertising
• 15-19, mostly students
• Social, want to have fun
with friends
• Values affordability
• Women, 15-29
FEMALE
years, married
CONSERVATIVES • Educated till
9%
secondary school
• Traditional and
family oriented
• Less concerned with brand, likely
to try new products
18
19
BRANDS COMPETITIVE SET
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Spectrums of opportunity – what is your Brand Mandate?
No price, no pack,
no brand
Eg. boiled water
LDV, no pack, no
brand Eg. Water
decanted into
single sip, sachet
0%
10%
Available pack,
affordable ‘brand’
eg. Chinese
import
20%
30%
40%
Brand of choice,
over store of
choice
50%
60%
70%
Loyalty to African
brands
80%
90% 100%
Population Today
Population Tomorrow
Family
Aspirants
20
BRANDS COMPETITIVE SET
Consumption Spectrum
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Water
Pure Fruit Juice
Sports/Energy
Cooking Fat
No Price
Price
Pack
Brand
Africa
Margerine/Butter
Cooking Spray
21
MODERN TRADE SSA – HEAT MAP
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South Africa and Kenya have the strongest Modern Trade presence in SSA and neighboring
countries benefit from retail expansion. Nigeria has a predominant informal trade but the
entrance of Shoprite, Massmart, Spar and Woolworths during the last decade may begin to
change the landscape.
1 retailer
2 -3 retailers
4 retailers
5 retailers
>5 retailers
22
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
TRADITIONAL TRADE ACROSS SUB-SAHARAN AFRICA
Open Markets in Ethiopia
Dukas in Kenya
Table Tops in Nigeria
Kiosks in Tanzania
Dukas in Uganda
Container Store in
Mozambique
23
STREET LEVEL INSIGHTS – TABLE TOPS KENYA
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
80% of consumers shop at Table Tops (incl. Open Markets), this is the most
frequently shopped outlet for 35% of shoppers. 650,000 outlets across 15 CY’s,
retail contribution varies from 5-30%
Convenience includes Table Tops, Kiosks, FWAP’s, Malams, Ntembas, Janela Abertas, Barracas
Source: Nielsen Emerging Market Insight Nielsen Retail Measurement Services
24
STREET LEVEL INSIGHTS – TABLE TOPS KENYA
80% of consumers shop at Table Tops (incl. Open Markets), this is the most
frequently shopped outlet for 35% of shoppers. 650,000 outlets across 15 CY’s,
retail contribution varies from 5-30%
7 years on the same street corner
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
7 days per week
20-30 categories
35 US cents
Breakfast?
6am – 9.30pm
75+ products/sku’s
Airtime
12+ deliveries p/day
Repackages & Re-Prices
Beverages
Cigarettes
Convenience includes Table Tops, Kiosks, FWAP’s, Malams, Ntembas, Janela Abertas, Barracas
Source: Nielsen Emerging Market Insight Nielsen Retail Measurement Services
25
Positioning /
Affordability
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Advertising
Which
Country
Which
Consumer
Group
Which
Brand
Which
Stores
RTM
OOS
Price
(management)
26
CONVICTION ENVOYS
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
TRUST is everything
TRUST
Source: Nielsen Emerging Market Insights
27
MOBILES, TV AND RADIOS ARE KEY MEDIA USED
• TV, Radios and mobiles are used by majority of the respondents more than one a day
• In contrast, magazines, newspapers and the Internet are used by a minority and that too,
less frequently. Explosive growth rate for mobiles and the Internet
Penetration (% of respondents using it in the
past one month)
100
TV
Mobile
80
2771%
70
growth since
20003
Radio
60
50
Newspaper
40
Magazine
30
Internet
2333%
growth since
20003
20
10
TARGETED
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
90
ESSENTIAL
S
Africa's Media Landscape
0
0
2
4
6
8
10
Number of times used a week
12
14
28
BILL BOARDS EVERYWHERE – EFFECTIVE?
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
What do you see vs what is your intention / positioning?
29
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
FEATURE VS SMART PHONE
The surprising trend in
Africa on cell phones in
the usage is extreme, like
some parts of India
30
COMPLEXITIES ON THE GROUND
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
CHAID
Tree
Target
Irregular Micro Patterns and Spider Web of Complexity
Target
31
EXTERIOR PHYSICAL WALLS
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Do consumers see you in the way you intended?
Multi-brand
Retailer
Redundant
Specialist - None
Own
Mobile Standalone
32
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
STREET LEVEL INSIGHTS - INTERIOR WALLS
Redefine the walls
33
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Modern Trade
Urban
Rural
34
800m
400m
1bl
Modern Trade
Urban
220m
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
60m
Southern Africa
-South Africa
-Botswana
-Swaziland
-Namibia
-Lesotho
Rural
+Kenya
+ Angola
+ Ghana
+ Egypt
+ Nigeria
Tier three
-Senegal
-DRC
-Cameroon
-Ethiopia
-Malawi
-Tanzania
-Uganda
-Zambia
-Zimbabwe
-Algeria
-Morocco
-Tunisia
35
800m
1bl
400m
Modern Trade
Urban
220m
60m
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Semi local plan
Rural
Country plan
Product Strategy
Africa Plan
Move
To
Possibility
Route to market Strategy
Marketing Strategy
36
800m
1bl
400m
Modern Trade
Urban
220m
60m
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Semi local plan
Existing Product
Rural
Country plan
Africa Product
Africa Plan
Africa Portfolio
Affordability / pack size
Move
To
Possibility
Local manufacturing
37
800m
1bl
400m
Modern Trade
Urban
220m
60m
Rural
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Semi local plan
Country plan
Retailer relationships
Africa Plan
Distributor / wholesale
Direct to indirect distribution
Move
To
Possibility
Influential outlet targeting
38
800m
1bl
400m
Modern Trade
Urban
220m
60m
Rural
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Semi local plan
Country plan
Africa Plan
In-store promotion
In-store visibility
In-store availability
Newspaper / Internet
Move
To
Possibility
Mobile
TV & Radio
Retail and WOM
39
800m
1bl
400m
Modern Trade
Urban
220m
60m
Rural
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Semi local plan
Country plan
Africa Plan
Retail and consumer segmentation
Product innovation forecasting
Move
To
Possibility
Traditional Trade Advisement
Price, availability and marketing effectiveness
40
THANK YOU
41