Reversing the Tide: How I doubled my revenue in a shrinking economy

In this post I want to share some of my earliest lessons about doing business in Africa.  I found the following points to be most helpful in my most successful and earliest regional role as Key Account Manager Sub-Saharan Africa for a global perfume house .  These lessons brought me great results and I have pretty much kept them to this day in my approach to doing business in Africa.

Enjoy What you do

This job, was by far my most enjoyable time in my working life.  As Key Account Manager for the fragrance division, my role entailed finding new business by identifying manufacturers of laundry bars, detergent powders, bath soaps, body lotion or shampoo, in that order.  That was 15 years ago. 

There I was, young, energetic and full of enthusiasm.  I totally immersed  myself into this new industry of perfumery.  I enjoyed learning about top notes, middle notes and base notes in perfumery etc.  I loved giving my own names to perfumes and projects , based on my childhood experiences.  I remember I even named one perfume after my grandfather, another project after my hero, Steve Biko and another perfume after a river where I herded cows when I was growing up.

Once, when I was younger and adventurous, around midnight we were crossing a big river on my trip from Togo into Ghana.  The driver happily pointed out that this was the Volta River.  I felt a sense of achievement at having crossed one of Africa’s biggest rivers by road.  I named the winning perfume candidate from a project on that trip ‘Volta Force”.  It went on to be a very successful perfume.

Understand your customers and consumers

I had a soap manufacturing customer in Zimbabwe.  I was selling to them a perfume for a laundry bar that enjoyed a very good market share.  Around 2000, when Zimbabwe as a country started experiencing economic hardship, an interesting scenario developed.  Things were getting tougher, the consumers’ disposable income was dwindling.  Foreign currency was hard to come by.  My sales should have been dropping but they were actually rising. To be honest, my sales grew by 100% when they should have been dropping.

What was actually happening was that as the consumers were being squeezed financially, they stopped buying bath soap, laundry bar, shampoo separately.  They downgraded to the multi- purpose laundry bar, and my customer was in the fortunate position of having a good market share in that space.  The consumer would cut the laundry bar into pieces: one for the bathroom, one for the kitchen, one for the kids to wash their soccer balls, bikes etc.  At the first signs of this trend, I wanted to understand the causes and I did and made sure that I took full advantage of it to maximise sales.  And I was helping my customer to give their customers and consumers what was relevant to them in their time of need. 

I even went on to request a cost-optimised version of the perfume to reduce the price since my customer was battling to get foreign currency.  Cost-optimising the perfume meant reducing the most expensive components of the perfume but without in any way reducing the efficacy of the perfume.  This project also worked very successfully. 

In Africa, reliable information is scarce…. Make a plan

So there I was, a young African me in the motherland.  All excited in my new role in the Africa region.  I am expected to go and find new soap brands in the region to perfume and bring in new business. But how do I get to know the top 3 biggest soap brands by volume/revenue in a market.    So I am walking the dusty streets of Nairobi, one of Africa’s biggest economies, looking for opportunities.  I knew there were several local soap manufacturers and I can see their brands on the shelves. But how do I know which ones to target. I would like to identify the top 3 local soap brands so that I can approach the manufacturer with a proposal.  The easy way would be to pay for A C Nielsen data but it doesn’t come cheap. 

Back then 15 years ago, Kenya’s retail sector was already quite advanced and Uchumi and Nakumatt were some of the key players.  After a while I learnt that by walking into any of these retail key accounts, and observing which soap brand was taking up the most space onshelf, one could predict with a fair amount of accuracy, which brand/variant was number 1, 2 or 3.  If the picture repeated itself in 3 or 4 big supermarkets, you could be fairly sure that your conclusion was right.  Fair enough one could say that a brand taking up such space was because the space was paid for, but the logic still applies that if the brand could afford to pay for that space, it was therefore doing very well.  So by just thinking differently, I was able to solve my problem.  Data in Africa can be expensive or outdated, but the truth is data is all around you, you just have find it and interpret it, be creative. 

JIT 101, lessons from a trader in Kampala

One of the best lessons that I learnt about business in Africa was from Kampala, Uganda.  In a meeting with the MD of the top local soap manufacturer in Uganda, he explained that to understand this market, we must take a trip to central Kampala to Chikubu Street, where you had all the traders in one place.  The street is almost a kilometre long and it is full of traders selling their wares.

Some traders are as small as just a table top, a flat wooden platform the size of a door that is elevated by any contraption so that it makes a “table” to sell from.  The bigger ‘wholesales” are not much bigger than a typical single or double garage at the most.  I have not been to Uganda in about 7-8 years now so I am not sure whether Chikubu street is still the same.  There is a good reason why the “wholesalers” were not that much bigger than a garage.  That is because they didn’t need the space really.  They simply displayed their different products and actually only held minimal stock of each. 

Their typical “key account” was someone from upcountry who would indicate how many cartons of each variant they wanted.  The wholesaler would tell them to come say at 12:45 the following day.  That is because at that time the manufacturer’s 30T truck would be parked in front of the “wholesaler” ’s shop.  The customer’s 7 ton truck would be parked next to it to receive the goods off-loaded off the manufacturer’s truck.  When it was full the next key account would park his 10 ton truck next to the super-link.  To me this was Just In Time delivery at its best.  Not from any textbook, but simple, practical and convenient solution to a business challenge.  And the turnover from these small “wholesalers”, with minimal space, no bigger than a garage, was pretty impressive.