|
The strong growth of the market research industry in Africa reflects growing business interest in the region. Kenyan market researchers RESSOL have focused their pan-Africa expansion strategy on developing underserviced markets.
Market research is thriving in emerging markets: According to ESOMAR’s Global Market Research Report, global growth was 6.8% year on year in 2007, but Latin America posted a growth rate of 17%, followed by Middle East and Africa region with 14.4%. East Africa in particular has recently seen a surge in activity: In 2006, the industry turnover suddenly jumped to KES1,330m, from KES890m in the preceding year, a growth of nearly 50%.
Steadman’s acquisition by Synovate, a division of UK-based advertising conglomerate Aegis, shows that the industry not just thriving, but also beginning to attract international investor interest. For Jane Delorie, the Managing Director of Research Solutions Ltd (RESSOL) in Nairobi, such growth validates the decision to set up her own company 12 years ago when she realised that the exclusivity agreements of her then employer, Research International, had opened up an opportunity that the emerging competition in a young industry had not yet exploited. Today, RESSOL’s clients include Celtel, Total Oil, Kenol, Nokia and other regional and multinational corporates.
Focus on Virgin Markets
At 17%, RESSOL grew at a faster rate in 2007 than the industry in the region. While founded in Kenya, RESSOL had an East African reach from the beginning, and it’s largest client continues to come from Tanzania. Over the years, RESSOL has built network through the continent, but has made a strategic decision to focuses mainly on very young and undeveloped markets and not compete in better serviced markets like South Africa and Nigeria, where the company has established partnerships instead. However, the company’s projects in Southern Africa, in Zambia and Malawi, were often driven by South African companies keen to expand into the southern African region.
Even though this is clearly where she perceives the largest potential, Delorie emphasizes the enormous effort that it takes to enter countries that have practically no market research capacities, and no experience with the industry: “Educating people is still our biggest challenge”, says Delorie – and her most immediate concern are not, in fact, staff: Many potential clients are not aware of what market research can actually do for them, and how they can benefit from it.
Far beyond mere marketing of its services, RESSOL effectively needs to explain the concept and value of market research to local corporates. For this reason, the company holds information seminars – free of charge, but only open to executives who have the power to decide on the purchase of market research. On the upside, Delorie notes, many people are very interested to learn more about the company’s products, and sometimes their information seminars even make front-page news. While this, of course, does not always translate into actual business, it often the actual research easier, as many interviewees have already heard about the research project on radio or TV.
Staff training, in her opinion, is the next big challenge: Unlike for example advertising, market research is not very glamorous and there are no perks like events. But it typically involves regular travel and many learning opportunities. There are few fully trained professionals, and RESSOL often takes trainees straight from the university and develops them on the job. That there is demand for such skills is evident from the fact that the labour market is quite competitive – and that there is a lot of poaching.
RESSOL is headed by three women, which, according to Delorie, is not entirely coincidental: “Research needs strange combination of skill: professionals need to be able to interact well with clients, but also have to have a head for numbers. In men, these are basically two types of persons, whereas women seem to be able to combine this.”
Outlook
On a global level, East Africa is still a very underdeveloped market with scope for more market entrants. This is also reflected in the absence of a dog-eat-dog climate in the industry, at least for now. Even though there is competition for trained staff, market research companies will still help out each other when one is temporarily overloaded with the data work. The industry is also trying to build industry standards to improve quality: In Kenya, the Marketing and Social Research Association (MSRA) has seven members, all established, recognized researchers, and each member has committed to using ESOMAR industry standards.
In the recent years, the industry has changed dramatically – as have the regional economies: New entrants over the past five years now all try to cover all East African markets, indicating that their clients are typically no longer focused on just one country, but increasingly see East Africa as an integrated market. In turn, international interest by industry players in the East African market has also grown, and many research companies look beyond the regional economy to an African market. RESSOL’s expansion plans include regional hub offices for Southern African in Dar es Salaam – set up in early 2008 , Kinshasa for central Africa, and Ougadougou for western Africa.
In the EAC, Kenya still has a far more sophisticated market than the neighbouring countries, with an extensive research, media and advertising industry, but this gap is closing rapidly and especially the Rwandan government is very proactive in promoting business. Kenya remains the hub from which international companies plan their regional expansion, but newcomers in the market often attempt to use the same concept for all EAC countries – a mistake that sound market research can help to avoid.
There is still scope for diversification. The bulk of research work comes from the private sector, but social research offers growing opportunities in a region where donor agencies and NGOs continue to have an extensive presence. Jane Delorie argues: “In the past, social research used to be done by individual consultants through established old-boys networks, but this is becoming more professionalized – we reckon we can deliver better quality at roughly the same price as an international consultant with all the attendant extra costs.”
|
Subscribe to this comment's feed
Show/Hide comment form
