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South Africa Insights


Trust builds love

If you get things right in SA again and again, chances are, your brand will thrive. An analysis of the top 63 brands for Brand Love in SA revealed three core components of love. The first two were friendliness and pride. Brands that were caring and generous were easy for consumers to care about—as were those that were creative and desirable. The third was that they are highly trusted.  The most loved brand in South Africa, KOO, while not in the top 30, is certainly at the top of many people’s lists in the country. A maker of canned beans and other foods, it has been an essential part of the fabric of South African life for decades. KOO proves that brands that deliver on their promises again and again make consumers feel in control of their lives and eager to purchase again.

Local is lekker

In her article in the thought leadership section of this report, Jennifer Leppington-Clark points out the dangers of foreign brands coming to South Africa’s unique market without the benefit of local insight. An advertisement aimed at new moms that may have had great appeal in the UK could fall flat because parenting styles and circumstances are so different. SA brands looking to push beyond their borders may have less of a challenge. SA consumers love the country’s iconic brands, but the ones, like Nando’s, that have succeeded globally need to make only slight adjustments. For example, in its overseas markets, Nando’s tends to drop its role as social commentator and focus more broadly on its food. That said, it loses none of its distinctive South African style, which other nations’ consumers largely seem to enjoy.

E-commerce. Overall not hot right now.

Only two percent of South African retail sales come from e-commerce. What’s holding it back? Largely trust and logistics, challenges which are not unique to the country. The most popular category for e-commerce, not surprisingly, is travel. The introduction of new pickup points may also lead to a change in attitudes towards online buying, but don’t hold your breath. Most South Africans still like to buy in person, which gives brands a great chance to build equity through friendly service. Friendliness also has a built-in advantage: it costs nothing.[1]

Except Takealot is soaring

For those who are unfamiliar with it, Takealot is South Africa’s answer to Amazon. Takealot’s chief advantage lies in its delivery services, which reach customers in certain areas in a single day. Takealot is also realistic about attitudes towards e-commerce in the country and has opened at least 30 outlets for customers who prefer to pick up or shop in person. It is also aggressively creating an ecosystem, including pickup points and a range of payment options including EFT services, cash on delivery, rewards points from FNB and Discovery, and NSFAS Wallet, which taps student financial aid. Already tops in South Africa this year for Brand Experience, it may break into the top 30 ranking sooner rather than later.

Smartphones go mainstream

For years, South Africa was a global holdout when it came to feature-phones, but no longer. With more and more local telecoms introducing their own, inexpensive Android handsets, smartphones are going mainstream. Estimates of ownership vary wildly, from 35 percent of the population to 80 percent (the generally reliable Pew Research Institute listed it at 51 percent in 2018) even with data rates so high they have become a political issue. This rapid adoption has unlocked access to a huge range of apps and online services, from payments to ride sharing, that are changing the way South Africans do everything from bank to plan a night out. Brands without apps would do well to see how their counterparts in smartphone-rich places like Japan and the Netherlands have navigated the shift to digital. Many of those companies have already made big blunders that SA brands can neatly avoid.

Facebook, the universal language

Thanks to the introduction of Facebook Lite and the decision of some mobile providers not to charge for its data, usage of the platform has skyrocketed across SA to 28 percent of the population. It is especially popular as a cheap way to keep in touch via Messenger. Interestingly, Facebook penetration is nearly equal across all age groups, showing that SA’s reputation for friendliness is deep and abiding—and cuts across generations. Brands, and especially those that market to older South Africans, should bear this in mind when advertising on the platform.[2]

The data dilemma

South Africans enjoy some of the best cell phone coverage in Africa, with nearly 100 percent of the country covered by at least 3G and much of it by 4G networks. But with smart phones becoming a common means of accessing the Internet, making payments, and navigating modern life, a vexing problem remains. South African consumers pay around seven times as much for data as their Egyptian counterparts, and more than much of the developed world. For their part, telecoms acknowledge the problem and say they need the government to open up more of the spectrum to provide cheaper rates. Whatever the case, rates are coming down, albeit slowly, which should only augment South Africa’s already accelerating adoption of smartphones.

Rain to the rescue?

In spite of data costs, SA is a mobile-first community. Much like China and other markets, it has leapfrogged over laptops and desktops to handheld devices. Startup Rain has addressed this reality with a unique offer: data only mobile plans, with unlimited off-peak browsing. This highly innovative offering has the potential to shake up the SA mobile market—and consumers are taking notice. While Rain still lacks the scale to make the Top 30 South African Brands, BrandZ data shows that SA consumers rate it the most innovative brand in the country.

Malls, coming to a town near you

In a country with consumers supposedly under stress, something weird is afoot: a building boom for malls. Across the country they are springing up everywhere.  SA’s  2,000 malls make it eighth in the world in terms of shopping center coverage. In fact, malls have been a bright spot in the South African economy. Over a ten-year period ending in 2017, according to MSCI< SA’s retail sector delivered the highest annualized return among the 23 markets at 13.2%. If you’re wondering where SA consumers are, look no further.

The discount consumer springs into action

South Africans are going crazy for deals, with nearly a third, by some estimates, of its FMCG goods being bought on sale. This is obviously being driven by people nervous about their personal finances, but it’s also providing a roadmap for some brands. Advertisers are turning more and more away from brand building towards offering deals—which may be working in the short run, but certainly holds risks for when times change, which they will. Since its launch in 1998, BrandZ research has consistently shown that businesses that focus on short term sales do not return to growth anywhere near as quickly as those that balance short with long term investment in their brands.

SA may be going alcohol-lite

Cider brand Savannah recently launched a humorous ad for its new alcohol-free offering which featured pilots and policemen downing the product. This may be a sign of a broader shift in how South Africa views alcohol consumption. Only a few years ago, drinking and driving was, if not a socially acceptable practice in SA, at least a common one. But with the introduction of inexpensive ride sharing services, it has become frowned upon. The trend away from drunk driving has been accompanied by a rising public taste for alcohol-free beers and other drinks. While we lack recent data on alcohol consumption, surveys by the WHO have historically shown South Africa to be a modestly bibulous nation by global standards, with a slight downward trend in the latest data from 2015. 

The social scene

Who dominates social media in South Africa? For the most part music, media, and fashion personalities like Minnie Dlamini, Bonang Matheba, Boitumelo Thulo, Cassper Nyovest, and Pearl Thusi. However, the most popular Instagrammer and the most popular YouTube channel come from outside their ranks. Thanks to a large Indian fan base, cricketer AB de Villiers clocks in at a whopping 6.4 million followers on Instagram, making him the most followed South African on the platform. The most popular YouTube channel is Kruger Sightings, which features fantastic videos of wildlife from around Africa. Founded by then-15-year-old Nadav Ossendryver, it now has 1.3 million followers and nearly one billion lifetime views.[3]

Twitter shaping public discourse

Twitter is a growing force in social, cultural, political, and economic discourse in SA. And it should be no surprise that that has both positive and negative consequences. While it’s given public figures direct access to their fans or constituents, it’s also helped bring together and amplify the messages of those probably best not heard from. As elsewhere, brands that can find a way to be fast and relevant on the platform, while avoiding mistakes, can find it a great way to connect with consumers.

No whining about wine

In her thought leadership article in this report, “South African brands beyond our borders,” Stina Van Rooyen notes that Top 30 South African brands generate surprisingly little of their revenue outside of SA—less than similar companies in India and LATAM. The wine industry provides data that supports the idea that South African brands could take a more vocal role on the world stage. South Africa has been producing wine since the Dutch first established a base in Cape Town in the 17th century. And by one study, SA accounts for 12 percent of the value of the wine drunk in the world. However, in BAV’s 2019 Origin Report, it ranks 36th in international perception as a country of origin for wine. Van Rooyen suggests a five-point program for all brands to grow sales outside SA, including dynamism and authenticity. The South African wine industry with its often conservative (if we were not inclined to be charitable, a more accurate description might be “dreary”) brands and labels may want to take note.

Live longer(er) and prosper

SA enjoys a rich history of medical innovation, including the world’s first heart transplant and the invention of the CAT scan in 1963 by Nobel-winning physicist Allan MacLeod Cormack. However, the country’s life expectancy plunged in the early 2000s, reaching a nadir of just 55 years. The good news is that while still not wonderful, it’s coming back, notching steep year-on-year gains to its current 63 years. While this is hardly ideal, the trend lines point to positive gains for years to come, which has to be welcome news to any who market to older generations.[4] SA is notable for having hospital brands in its top 30, and insurance brand Discovery, one of the healthiest in the BrandZ ranking, is providing an innovative new approach with its Vitality program, which rewards people for living healthier lives.

The least popular euphemism in SA

South Africa has a rich vocabulary of terms that puzzle other English speakers, like “braai” (barbecue), “lekker” (nice, cool), and “just now,” which curiously means “not now, but sometime soon.” But for all the pride its citizens take in their slang, there’s one term they’d be happy to use less: “load shedding.” Essentially, this refers to planned electrical blackouts that affect different parts of country. The country’s grid relies largely on national power company Eskom’s aging and recently mismanaged coal-fired power plants, which are struggling to keep up with a rising population that likes its TVs, toasters, and microwave ovens. While an annoyance to consumers, the problem has deeper implications for brands and businesses. In addition to lost time, it produces a lack of confidence in the investor community, which has adversely affected the economy. The answer? Some are betting on green technology. Nedbank, for instance, has offered up the country’s first renewable energy bond, promising to invest in new solar and wind projects. If successful, this could provide a way for South Africans to shore up their grid and decrease their reliance on their older, environmentally unfriendly sources of power.

The changing definition of work

Commuting on South Africa’s often congested roads is exactly what it is in many places: a major headache for workers. As a result, many companies are letting their workers leave early—or skip the commute entirely. This is unlocking opportunities for new classes of workers, and especially single parents. But it may also be creating a newer and earlier start to the rush hour, as half days have become increasingly common.

Shared workspaces: sowing seeds of innovation?

For several years, South Africa has seen an explosion of shared workspaces. Through companies like The Work Space, startups and small businesses alike are gaining all the benefits of corporate offices at a more affordable cost. The typical office boasts desks, conference rooms, and ultra-modern fiber connectivity. It’s notable that many of these are located in Cape Town, SA’s Silicon Valley, where they are helping foster a culture of innovation. While no one is predicting a boom in new products and services yet, these workspaces are making it possible for risk-takers to unleash their creativity on the market.

[1] Lighthouse Explorer

[3] Social media landscape 2019.

[4] World Bank