Using granular data to tap into Africa’s fastest growing markets

January 23rd, 2018, Published in Articles: PositionIT, Featured: PositionIT

Africa is a place of extreme contrasts, with a booming middle class and small, rapidly growing clusters of wealth existing alongside swathes of widespread poverty. For a business owner hoping to tap into these growing markets, the value of population and geospatial data at a granular level cannot be overstated.

How, for example, is a restaurant or coffee chain that is already experiencing promising growth in East Africa to accurately understand neighbouring markets, into which they hope to aggressively expand in the coming months and years?

Buying survey data from traditional providers, assembled at the city-wide or regional scale, can only get a business so far. After all, knowing how many potential consumers are present in a city with millions of people does little to help you capture the right clientele when much of a business’ turnover is dependent on local foot traffic and patronage of customers mostly based in the immediate area.

Location, location, location

By combining existing household data with a far more granular layer of individual information, it becomes possible to construct a more useful target-customer profile than has ever been possible before. At Fraym (a geospatial data analytics company), for example, we help our clients to identify potential customers at the hyper-local level through division of the geographical landscape into far smaller sections, often grids that divide communities into detailed areas of as little as a single square kilometre.

A competitive landscape analysis that takes as many high-quality data points into account as possible is essential to reducing chances of failure in growing markets. Fortunately, the digital data disruption is adding unique advantages to the practice. Satellite imagery and complex machine-learning algorithms are an invaluable way to process such large amounts of data, looking for the common thread between household survey datasets and the geo-coordinates of the respondents, to identify new opportunities that would previously have gone unnoticed.

Big impact from small areas

Very often, businesses will consider locations based on anecdotal evidence or expensive survey data which is inefficient, often dated, and usually not aligned to the data points that a business would find relevant to their own product or service offering. These anecdotes and surveys also often focus on national, aggregate results, missing important insights into consumer characteristics beyond traditional boundaries. Time and time again success rests on understanding small clusters of consumers at the neighbourhood level, with pockets of untapped consumers often popping up at the intersections of traditional geographic divisions.

Quality over quantity

Ask any multinational company for a quick opinion about the African business landscape, and you’ll likely hear that it’s intimidatingly low on consumer data, but also rich with potential. Granular consumer data that is informed at the individual and community level, rather than the aggregate level, is essential for businesses hoping to get a foothold in these fast-growing areas.

If companies are looking to grow across Africa in the coming years it is no longer enough to ask where customers live. They must ask how people live as well, and answering this question will depend on new data sources and creative ways of looking at them.

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