Lessons learnt from selling consumer goods in Africa
Singaporean businessman Shaun Jayaratnam of Grand Oils & Foods has been doing business in Africa for over a decade in various capacities. In his current role as head of packaged oils and food, Jayaratnam shared his advice for foreign companies seeking to enter Africa’s consumer goods industry during a webinar hosted by the Singapore Business Federation. Here are some of the main takeaways.
1. Spend time on the ground to identify opportunities
There are no shortcuts to determine what African countries to target or which products to introduce. Businesspeople need to spend time in the various countries to research potential gaps. Whenever he is in Africa, Jayaratnam visits wholesale markets in cities like Lagos, Kano or Accra to see what products are available. This inspires him to consider new items that could be introduced. He then explores how it could be brought in and at what price it should be sold.
2. Product localisation
Jayaratnam highlights the importance of adapting products to local tastes in African countries. Businesspeople cannot assume items that sell well in other emerging markets, like Vietnam or Myanmar, will perform similarly in Africa.
Beyond taste, the packing must also be localised. For instance, many products imported into English-speaking Ghana find their way to neighbouring Burkina Faso, where French is the official language. “Your packaging should have French along with English on the product,” Jayaratnam explains.
3. Work with knowledgeable distributors
Many African ports suffer from congestion and onerous bureaucracy. A simple mistake in documentation or the import process can lead to cargo sitting in ports for weeks or even months. Foreigners should therefore ensure they work with local partners who understand how to clear imports through customs and are well versed in taxation and duty structures.
4. Build win-win relationships with African partners
Foreign businesspeople should not approach the relationships with their African distributors as purely transactional. Instead, they should aim to offer their African partners something they don’t already have and help them grow their business in areas such as sales and marketing. “You have to bring something unique to the table,” Jayaratnam explains.
“I’ve got customers that I’ve worked with 15 years ago. Today, I may not be doing the same business with them as I was 15 years ago but they have remained friends. If I need information on anything in-country, I can pick up the phone and they’re willing to help me out … That’s only possible if you don’t treat the relationship as transactional.”