Tag Archives: business

Online shopping and African growth

The entire continent of Africa is regarded as the “mobile continent”. With a massive 70%  mobile penetration, the market is perfect for various investments focused on mobile technology. Combine this with continent’s median age of 19 and you can see why some internet-based companies are interested.

However, even companies like Facebook cannot find the immediate success they’re hoping for.

Investing in Africa

Manji Cheto, vice president of Teneo Intelligence, told Quartz: “Africa’s attractiveness to companies such as Facebook is a no-brainer… Yet, the continent’s low internet penetration was always likely to constrain the company’s ability to significantly boost its user numbers.”

This must be clarified. Just because there is a large mobile penetration does not mean there’s a lot of internet usage. Not all mobile phones are accessing the internet.

Despite this, more people are and there is greater investment in getting Africa connected. This will still take some time. As Sonia Jorge, Executive Director of the Alliance for Affordable Internet, wrote on CNN:

“With just one in five Africans online today, Africa has a long road ahead. Though the technology to beam the Internet to every corner of the continent exists, billions remain shut out from the digital revolution for a simple reason: they can’t afford to connect. Internet costs in Africa are among the highest in the world, preventing many from experiencing the benefits of digital access.”

Retail importance

Despite this, we are seeing large growth in online retail shopping.

This is especially the case in South Africa. As one Paypal survey shows, online shopping in South Africa will rise to R46 billion in 2017. Further, six out of ten South African internet users over the age of 18 shopped online in the past 12 months.

Retail shopping in general is central to the country. For example, retail shopping could mean the country dodging a recession. Of course, all this depends on functioning, stable and well-managed retail sites. For example, a point-of-sale (POS) in South Africa requires the best software, to keep the store functioning.

Overall, we’re seeing a greater acceptance and introduction of more internet users in Africa. These users are mostly on mobile phones, too, thanks to the enormous market penetration. The more the internet is accessible, the more everyone benefits. We see this in terms of the economy and, therefore, the lives of ordinary people.

Why South Africa’s vehicle industry matters

The world is slowly coming to recognise the importance and growth of the South African market. In particular, it is an untapped and potentially massive entrance to the wider African market – one which, when recognised and studied, can be beneficial to various business – construing the African market only within caricatures rather than reality is not unhelpful to African residents but businesses, too, who could stand to benefit if only they put time to study what this area means.

Consider the vehicle industry.

In 2014, Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa (Naamsa), noted that the South African automotive industry had integrated into the global manufacturing environment successfully. The environment is one which is characterised by “a relentless focus on cost containment, cost reduction, efficiency improvements and quality”, as summarised by MoneyWeb.

Even in 2012, it was noted that:

“The sector is one of South Africa’s most important, contributing at least 6% to the country’s GDP and accounting for almost 12% of South Africa’s manufacturing exports, making it a crucial cog in the economy. In 2010, 271 000 vehicles were exported.”

What this meant for everyone, from the average driver in Johannesburg to auto electricians in Pretoria East, was that the industry itself stood to be important. It had found a hold and was developing faster than many thought possible.

A good way to examine this is to look at who’s winning this race. In 2015, Toyota sold more cars in South Africa than anyone else. The company did this by primarily keeping the brand itself relevant. The popular Corolla highlights what Toyota did to maintain such a hold on the market.

Leon Theron, General Manager of Technical Services at Toyota South Africa, told Marketplace Africa, a CNN show:

“Currently we sell about 1000 units a month on this model. This model is extremely popular in the rental business and for private individuals out there.

“This vehicle is locally produced and a lot it is locally designed, which is phenomenal, it’s a true South African car. There is a big demand with people saying give us a car with a good size that’s affordable and that’s what we did.”

This isn’t just important for cars but all businesses. Notice that what matters was that regardless of being a Japanese company, the mandate was to understand the necessity of the environment in which Toyota operated in – it didn’t work on caricature or stereotype, but listened to the demands of the wider public and environment. In this way they proved successful, in an area and market often considered unimportant by many others.

The lesson here is that businesses must listen – in this way, everyone, customers and CEOs alike, benefit.

Business trends that will matter in 2016

picWe’ve never been able to accurately predict what businesses will face over a year. However, we can examine unresolved issues that show signs of worsening or improving – but, which, nonetheless appear important for all in the business world. 2016 is no different and it’s important to focus on those areas businesses need to concern themselves with.

Coming from last year, we all noticed an increase concern and focus on cybersecurity.

As the world becomes more and more digitally engaged, we rely less and less on physical documents to track important data. This has meant, however, that other kinds of thieves have been able to acquire our important data – meaning we have had to alter our security priorities to be more focused on digital security.

This hasn’t negated on the ground security, such as having proper control consoles or security guards, though – those still matter, but it’s that we have had to add additional considerations for our way of thinking about security.

Writing in Forbes, Frank Sorrentino notes:

“As we look to 2016, cybersecurity threats continue to prevail, particularly with the rise of fintech and the growing push to develop faster methods of payment and innovative ways to transact. While these advancements are undeniably valuable, new technology breeds new security and fraud risks – thus, we should all make sure to carry over this sense of vigilance and responsibility regarding cyber protection into the new year.”

Another important dynamic will be small businesses, considering how much they are able to help drive an economy. Documenting the many types of small businesses in Harvard Business Review, Karen Mills notes:

“An important but less well-documented type is comprised of an estimated 1 million small businesses that are part of commercial and government supply chains (referred to as suppliers). These businesses are often focused on growth, domestically or through exports, and operate with a higher level of management sophistication than Main Street firms.”

Finally, another important focus for business will be premised on what banks will do. As The Telegraph points out: “Both capital and liquidity have increased in terms of quantity and quality, with equity capital held by banks at least 10 times greater than it was at the time of the crisis, liquidity up around fourfold and leverage broadly halved.”

The article highlights the questions banks need to be asking themselves in 2016; and, similarly, these questions and the various answers matter to businesses to in their responses to the banks’ decisions.

2016 has started off harsh for everyone and it’s important that businesses keep an eye on what’s to come.

The place of PR in 2016

Negotiating the world in 2016 is a difficult one for many, especially businesses – the enormous strides we’ve made in terms of technology and culture, the continued way everyone is becoming connected, all have a great impact on how businesses are treated and viewed.

For example, it’s now no longer possible for businesses to ignore the impact and importance of social media – in an age where Facebook has 1.23 billion active users, and where serious analysts believe social media is taking over traditional news sites. This has meant that those who deal with public relations have had to reassess what precisely that means.

Indeed, some view public relations as the solution to ongoing, interactive and somewhat user-controlled environment of marketing. Writing in Advertising Age, Lindsay Stein notes:

“Public relations has always played its part in the marketing mix, even if it was added to plans late and rarely recognized like other disciplines. But the emergence of skippable, blockable, opt-out-able advertising, not to mention ever-more integrated campaigns, means PR can suddenly demand more than a supporting role—and maybe even take center stage.”

The more people have control over their own media, the more it’s meant that businesses have had to be smarter about how they present themselves. Users can ignore or block several aspects of marketing. What businesses have tried to do is create alternative focus for engagement: for example, creating content users themselves will seek out and share with their friends.

Yet, PR still has the opportunity to take the lead, as many public relations courses will tell you – especially as per social media use. As Fortune Magazine highlighted:

“social media offers hope for building better relationships between PRs and the people they need to work with. Rather than blindly pitching thousands of people hoping for a 1% response rate, public relations pros can deeply research and build strong relationships with the journalists most likely to be interested in the companies they represent.”

Rather than it being an inhibitor for creating visibility and positive association with your company, you can use social media as a tool to reach and learn about those who can do well by your business.

PR is also a fascinating field due to it constantly changing and having to keep pace with technology; this means it’s an ever-green field ripe for creativity and for those looking to have their artistic and writing talents put to the test.

Why business should be focused on alternative energy

The future of business is always about survival. Survival however depends keenly on knowledge and knowing what to do with that knowledge, before anything unforeseen takes away your ability to function as an entity. Before even profits, there has to be a way to stay above the waters that threaten to consume all businesses.

One way that businesses could help themselves is actually a way to help the environment: that is, being keenly aware of the developments of alternative energy. This is particularly the case given recent issues around the world involving power, as seen in places like South Africa.

Businesses that depend greatly on having electricity, for example, found themselves in the mud due to not being able to receive and use electricity.

There were solutions of course; the ability to use generators has helped, leading to more businesses inquiring into generator financing to help them manage their own expenses. Yet, aside from generators, there has to be a focus on alternative energy sources and, perhaps, an investment in future products or lines that can beneficial.

One important path has been to focus on solar energy. As ThinkAdvisor notes:

“Solar energy has been around for decades, and has had its bright and dark days. But in the past two years there has been major investment growth. According to the United Nation’s Environment Programme’s “Global Trends in Renewable Energy Investment 2015” report, global investment in renewable power (excluding hyroelectric power) was $270.2 billion in 2014, 17% higher than in 2013.”

Countries like China and Japan spent nearly $80 billion on solar installations. Even developing countries saw investment increases up by 36%.

The issue is that in order to make solar energy viable there has to be investment from major businesses and investors to make that dream a reality.

GTM’s MJ Shiao, director of Solar Research, said: “solar isn’t just a promising technology. It’s a real, deployable tool and platform for a next-generation electricity grid.”

This is the future of how we’ll conduct our business and how the world will survive; for those that kicked themselves for not leaping into the internet age sooner, now’s the best time to start thinking about how you’ll be driving the future of your business in terms of energy usage.