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Entrepreneurship 2014-09-19

How to grab a business opportunity in Africa

Are you ready to unlock your potential in Africa? Now owning a franchise in Africa will transform your business strength and growth. Besides opportunities, Africa also offers you a new way of doing business and that is via Micro-franchising. Read on to kn

Africa is on the radar these days for many Indian brands who wish to take their business across borders.  We spoke to franchise experts in African trade to know about the galore of opportunities that the land offers to investors.

Africa has been the second fastest growing region in the world over the past ten years with an average annual growth of 5.1 per cent over the past decade. Private consumption, according to the Rise of the African Consumer report by McKinsey Africa, Consumer Insight Centre rose by R5 trillion ($568 billion) between 2000 and 2012.  This is higher than in India and Russia and is expected to grow by a further R3.5 trillion ($400 billion) by 2020.  Consumers who will make this possible according to the report are brand conscious, preferring formal shops and buying products based on price point and quality.  Apparel, consumer goods and food were expected to account for 45 per cent of the estimated growth.  This is more than consumers do on an average in India, Brazil and Russia. Well known brand Apollo Tyres had also entered South Africa in 2006. The company also announced that Apollo Tyres Africa Proprietary, a wholly-owned step subsidiary of the company in South Africa, has voluntarily initiated business rescue proceedings. It has appointed a specialist to re-structure its operations and to secure best value for all stakeholders. The evaluation by such specialist will decide the future course of action for the company in South Africa. 

Potential for Franchising

Franchising has the potential to be a successful propellant in supporting the continued economic growth in Africa.  Peter Moyanga, South African entrepreneur and past Chairman of the Franchise Association of South Africa (FASA) says: “South African companies in particular are ideally placed to establish and dominate the franchise footprint in Africa.  But Africa is not homogeneous. Being successful in Africa requires an entrepreneurial attitude and a willingness to help create the market and infrastructure around the business venture, rather than just entering a country.  Operating in Africa may entail investment in the wider environment, such as the supply chain, distribution channels and in the workforce, in terms of training and healthcare as well as investment in basic services such as provision of potable water, electricity and even sewerage systems. Building any successful business in Africa goes hand in hand with addressing the challenges the continent offers. Franchise companies entering Africa, have in the past failed for reasons that should not have occurred had these challenges been addressed prior to entering a country.”  These challenges are:

  • Market research- Obtaining market information on consumer attitudes, trends, and other relevant data is essential.  Gathering market information is largely dependent on face-to-face interviews.
  • Culture- Africa is a mosaic of cultures.  Understanding cultural differences are vital when deciding on the correct marketing approach for a particular country.  Imposing a single cultural based belief on a multicultural situation must be avoided.
  • Management - Finding the right talent or partner for a particular franchise is a problem for franchise companies entering Africa.  A thorough and well designed selection process is needed.  In addition, steps must also be taken to ensure that management skills are developed and maintained. 

Brands from all over

One of the most loved gifting brand, Archies also has more than 21 overseas units and plans to expand in Africa now via franchising. Leading men’s wear brand, Classic Polo already has its outlets in Dubai and Singapore and soon plans to foray into African market. Ferns N Petals opened its first overseas unit in Kathmandu and is now eyeing African land too.  Anil Sharma, Vice President, Retail, Ferns N Petals said: “Who wouldn’t want international exposure and as a brand if we can share emotions via flowers, why not make a bridge between Africa to India and vice a versa. Why not share our expertise with them and they can teach us something from their market. It can be a great move.” 

Yum! Brands that operate Pizza Hut, Taco Bell and KFC globally have also included South Africa into its top 25 markets- stores for the year end 2013. Till then the brand had 736 KFC in Africa. Besides India, franchise brands from Europe and the USA have also noticed the potential of Africa and are particularly active in North Africa with quality brands such as Subway Sandwiches, Guess, Haagen-Dazs, ZARA, Radio Shack, Fuji – photographic shops, and KFC.  According to U.S. Department of Commerce there are more than 200 international franchise brands currently operating in Africa.  There are also local brands in numerous African countries that have the undeniable potential to pursue the franchise route.  These are in countries such as Egypt, Nigeria, Ethiopia and others where the basic franchise concept is beginning to make in-roads.

New trends

There is a new trend for entrepreneurs emerging in the developing world that runs parallel with the basic franchise model.  It is a model successfully applied in countries/markets where the economic numbers are too small to allow business systems to be adapted from developed countries/markets. Moyanga informs: “This model is referred to as the Micro-Franchise model that has proved extremely successful in creating jobs and wealth in poverty stricken areas in countries such as India, Mexico, Brazil and in the past few years also in Africa.  Whilst the basic franchise model concentrates on the middle income market, the micro franchise model is aligned to the rural and low income areas.  Micro-Franchises are very small businesses that seek to maximise profit and return on investment.  It is a way to distribute products and services through a business that is of a  size of a micro enterprise.  It is co-operative entrepreneurship where cost, risk and profit are shared between a parent company and a local business partner based on a mutually profitable contractual relationship.”

Conclusion

In Africa there is a fast growing demand for every type of consumer goods and services and entrepreneurial businesses across the continent are responding to these needs successfully.  There can be no doubt that Africa is rising. Indian brands have immense potential in the African land. Both the basic franchise and micro franchise models can be successfully adapted and developed in Africa.

Comment
Sura 17, Jan 2014 at 07:46 AM
I want to take liberty shoe franchisee in Bangalore, Karanataka. Please share complete offer with me along with all legal formalities/docs.
sandeep singh 29, May 2014 at 06:00 AM
I want to take liberty shoe franchisee in Haryana & NCR . Please share cmplete offer with me along with all legal formalities/ documents.
prasanth mm 18, Jul 2014 at 11:33 AM
I would like to associate with liberty franchisee in calicut-kerala. please send me all formalities
suresh 03, Oct 2014 at 07:17 AM
sir/mam i want liberty franchisee in haryana or rajsthan so plz reply me and send details . reply soon its urgent... thnks
A.S.SUFYAN 13, Oct 2014 at 07:59 AM
i woud like to associate with red chief frsnchisees in bangalore and surrounding please send the details and formalities .
sanjay gupta 07, Dec 2014 at 02:25 PM
I want take frenchiese of red chief, what is the process please tell me?
Pramod Jain 30, Jan 2015 at 06:04 AM
i woud like to associate with red chief franchisees in Delhi and NCR please send the details and formalities
saurabh jagarwal 02, Apr 2015 at 11:04 AM
I want to take lee Cooper shoe franchisee in Agra, Uttarpradesh. we are shoe manufacturers. Kindly tell me the full procedure.
meenakshi 23, Apr 2015 at 10:31 AM
I want to take lee shoe franchisee in Haryana & NCR. Please share complete offer with me along with all legal formalities/ documents.
Dr Shweta Tyagi 27, Apr 2015 at 11:31 AM
I want take frenchiese of red chief, what is the process please tell me? -
Rajendra Saran 22, May 2015 at 09:43 AM
Dear sir, I want to be open franchisee of any company so plz send me details. updating me in future.
mayank maheshwari 29, Jul 2015 at 09:45 AM
Dear sir, I want to open a red chief store in Aligarh. Please send me the details or contact me on.
shiv kumar 08, Aug 2015 at 07:34 PM
Dear sir, i want to open red chief store in allahabad. Please send me the detail or contact me
stalyn 14, Sep 2015 at 05:37 AM
i want to take shoe franchiess in hyderabad please share complet offer and detailes
anil 22, Oct 2015 at 12:22 PM
dear sir, I would like to take franchise of red chief in Kalyan near to Bombay. now days as i see demand of product is highly grow and this city development is also introducing very high.
Mohammad Khalid 29, Oct 2015 at 04:42 PM
I want to give my shop on rent double story 350 square fit area single floor in Mandi chock Moradabad famous Shoe market any one interested in opening shoes showroom please contact me.
santosh gupta 13, Nov 2015 at 11:02 AM
I want to take liberty & Reliance Footprint shoes franchisee in Khandwa.m.p. Please share complete offer with me along with all legal formalities/docs.
bhoopendra maskhre 20, Dec 2015 at 01:12 PM
Dear sir, i want to open red chief store in dist. balaghat madhya pradesh. Please send me the detail or contact me.
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