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Supply chain management The challenge of reaching your customer base in fragmented markets While the continent is rapidly modernising, the reality for marketers working in Africa is that enormous logistical challenges remain, Left: Small mom-and-pop stores still particularly outside the major metropolitan areas. remain key distribution outlets. Above: Coca-Cola microdistributor on his way tielman nieuwoudt ofers a reality check. to deliver new stock s an expatriate based in forfeit their country-club membership ethiopia in the late ‘90s, just-in- for such numbers! a time (Jit) delivery seemed like a the reality is that many small grocery nigerian nollywood film-industry fantasy. outlets run out of stock on a regular basis, With most of our raw material imported, sometimes daily. some buy only products the lead times could be anything from that they are certain to sell on that day, four to six months. being based in a so they require more frequent deliveries landlocked country also didn’t help and and in some cases this may even happen added significant cost to the business. hamstrung by old equipment that creates of south african retailers such as shoprite come, the reality is that modern trade in Modern trade is still every day. even today, the freight cost is higher from bottlenecks in handling cargo. as customs Checkers and Massmart, as well as africa is still in the very early stages of in the early stages of in addition, the outlet base is fluid, the port in neighbouring djibouti to addis and regulatory environments differ widely regional players like nakumatt (east development. the numerous traditional with new shops opening and closing ababa than it is from China to djibouti. from port to port, it becomes imperative africa) and international brands such as trade outlets (e.g. small mom-and-pop development frequently. seasonality also plays a part Fast forward now to the second to find a logistics partner that understands Carrefour (north, West and Central africa) shops, grocery stores and so-called dukas – for example, some outlets might stop decade of the new millennium and lead times and processes. but finding the is receiving increased attention. Certainly, or souks) remain the biggest segment selling beverages during the rainy season. africa is, in many respects, in a different right third-party logistics (3pL) partner can for any executive on a whistle-stop tour of the market. Furthermore, not all shops or selling space. However, with the significant be a daunting undertaking indeed. of the air-conditioned shopping malls of Moving goods to this large, points are permanent structures. in rise in traffic as the continent grows, However, for most companies, getting accra, Lagos and nairobi, it might appear fragmented outlet base is difficult and are so tiny that even six-pack cans can be nigeria, for example, ‘table tops’ and the african ports are increasingly struggling goods into the country is just one step in that the future is already here. costly. small grocery stores often have considered as bulk! ‘Go-slow’ channels come to mind. “as under the load. according to the World the supply chain. Finding the right route- limited cash flow and, in some cases, i often see ‘world’ charts for out-of- the name implies, table tops are tables bank, West africa alone has seen freight to-market to customers and consumers is early development stages limited space to stock product. they stock data (known as OOs and published set-up as temporary sales points to sell traffic increase by 364% from 1995 to a whole different challenge. but (and this is a significant ‘but’) while often require an intermediary, such as a by a number of research agencies) a limited number of units (e.g. mobile 2005 – and who knows what that figure a lot has been said about the growth accra Mall, nairobi’s sarit Centre and the wholesaler, to break bulk deliveries into averaging in the low double digits. phone carts). Mobile telecommunications will be by 2015. african ports are also of modern trade in africa. the expansion palms in Lagos are windows of things to more manageable quantities and some Most african senior managers would giant Mtn successfully targeted 20 strategicmarketingafrica Second quarter 2014 Second quarter 2014 strategicmarketingafrica 21