Cameroon has many opportunities to offer foreign companies and investors, from its growing consumer population demanding better quality products and services, to its geographic position that makes it a prime location to access West and Central African markets.
The construction of deep-sea ports in Kribi and Limbe are also promising for the country and aim to ease the congestion at Douala’s port, which results in long waiting periods for goods to be cleared.
However, Cameroon is known for being a difficult business environment. The World Bank ranks it at 158 out of 189 countries in its Ease of Doing Business ranking for 2015, a 10 point fall from the previous year.
During a recent visit How we made it in Africa spoke to a number of business leaders operating in the country, and asked them to share tips and strategies for success.
Patrick Mandengue, head of Central Africa for Unilever, suggests that companies introducing a new product should first start with smaller package sizes that can be sold cheaply.
While this strategy is often deployed by FMCG companies in markets with price-sensitive consumers and economies of scale, Cameroon’s smaller population of some 22 million might make the strategy less profitable than it would be in, say, Nigeria. However, Mandengue noted it is one approach that can be deployed temporarily to introduce new products. It allows consumers to test them at low-cost, and therefore with little risk to their finances. In doing so, new products can compete with more trusted and established brands in the market.
Investing in R&D
Boubakar Diarra, director of operations at beauty products manufacturer Biopharma, said research and development is one of the factors central to long-term success, as there is both a need and an opportunity to be innovative in Cameroon.
Research is also needed to identify the right price point for consumer products. While the vast majority of consumers are price-sensitive and base their purchasing decisions on what they can afford, there is also a movement towards health consciousness. Diarra noted this trend is perhaps more pronounced in Cameroon than in other countries, and advises companies to spend time researching the right price point that addresses the consumer’s need for both quality and affordability.
Be aware of local tastes
Bruno Olierhoek, managing director for Central Africa at Nestlé, said companies should cater for local tastes specific to the Cameroon market. For example, the company’s Maggi stock cube manufactured for Cameroon is flavoured differently to the one offered to the neighbouring Nigerian consumer.
“Cuisine and the way of cooking in Cameroon is not the same as Nigeria,” he explained. “The solution we bring has to be adapted to local tastes. So we have the same stock cube in Nigeria, but with a different taste and a different composition.”
Informal markets and promotions key
Charles Elamé, Diageo’s director of sales for Cameroon, said price sensitivity amongst consumers often trumps brand preferences when it comes to purchasing decisions. For this reason, the alcoholic beverages industry is typically characterised by promotions, as sales in one brand will instantly increase when its price drops.
Elamé also stresses it is essential consumer-facing companies have an understanding of how the distribution networks work in the country. With the vast majority of shopping taking place informally (estimated at 98% by Nielsen), it can be essential for the success of FMCG companies to get their products to informal markets. And they will need an understanding of Cameroon’s distribution umbrella to do this.