Consumers the main beneficiaries as firms innovate to remain competitive

A section of Mathare slums in Nairobi. Many of the world’s people are moving to cities, but are ending up in shacks that are barely fit for human habitation. Lafarge is looking at the frantic wave of urbanisation with great interest, hence the brain wave: why not mix mud with cement and solve two problems at once? Photo/FILE 

By Wallace Kantai

In Summary

• Researchers and marketers are having to develop the ability to see around corners (and down slum streets) in order to remain competitive. And you and I, dear consumer, are the ultimate beneficiaries.

There is something in common between stylish Africans, people who live in mud houses (but want to move up in the world), and matatus equipped with Wi-Fi.

And this commonality happens to help point to what companies need to do to remain competitive, and how planners need to see round corners. As usual, let me explain.

Japanese electronics manufacturer Panasonic has been well-known in Africa for decades. Its television and stereo models — including those that used to be under the old National brand — were the mainstay of African homes (my mother still has a Panasonic TV set she bought in 1986 — complete with a ‘‘remote’’ control that was tethered to the set with a cable, meaning that we never lost it).

Recently, though, the company has been overtaken by more nimble rivals. First was Sony, whose Trinitron brands were the TV sets to have until even they got overtaken by South Korean brands such as Samsung and LG.

So Panasonic is plotting a comeback. It has exited some slow-moving businesses, absorbed companies such as Sanyo and come up with a renewed push into markets that promise growth such as Africa.

The products in this new strategy are interesting ones, which is where the stylish Africans come in. One of the products is electric hair trimmers. Unfortunately for most of the companies that develop such products, hair is not just hair. Male African hair is a special product.

Cut it wrong and you will not just leave the man looking silly, but you will also cause him painful pimples from ingrown hair.

Recently, the company’s head for the Middle East and Africa, Masao Motoki, told me how Panasonic researchers had to spend significant time in Nigeria’s barber shops to ensure that they got the product right. The result is a line of hair trimmers specific to the African male customer, and insight about usage that helps the company stay competitive in a very promising, but challenging, market.

On to the slum-dwellers. Again, companies eyeing Africa have realised that the fortune that is to be made at the bottom of the pyramid cannot simply be grabbed without some hard work and some sturdy gumboots.

An interesting conversation brought this out. The CEO of French cement maker Lafarge, Bruno Lafont, stopped over in Nairobi on a tour of some of the company’s branches (of which Bamburi is one). He explained how innovation had to be sought out from the unlikeliest of locations.

Lafarge is looking at the frantic wave of urbanisation with great interest. Many of the world’s people are moving to cities, but then ending up in shacks that are barely fit for human habitation.

Hence the brain wave: why not mix mud with cement and solve two problems at once? Mud houses are not very long lasting, yet stone and concrete building blocks are too expensive.

Narrow

Thus the mud and cement mix, which makes the houses better-looking and more durable, but yet is cheaper than more conventional concrete. And, because slums typically have streets that are too narrow to accommodate the lorries that traditionally deliver concrete mix, Lafarge has also developed a distribution system that involves peddlers moving through the slums with pre-mixed concrete in plastic bags (engineers had to develop a slower-drying concrete).

And now, Wi-Fi. If you spend any time in Nairobi, you will realise that it is almost impossible to pry people’s fingers from their mobile phones. Music and social media are driving use of data on smartphones at unprecedented levels, leading to double-digit revenue growth for mobile phone companies.