Selling in Africa’s Underserved Markets

Nobody likes to be late to the party. Like Junichi, every wise salesperson wishes to catch the underserved customer before her competitor does so.  Junichi is a Tokyo based investor and marketing director for a solar power firm planning to expand from Asia to other continents. He googles “underserved markets ” and is pleased to discover that Africa is the world’s most underserved market, with the youngest and fastest-growing population. Africa also has the largest consumer market, and 600 million inhabitants lack access to electricity. Everything looks good, and Yunichi launches products and services in Nairobi, Johannesburg and Lagos. Twelve months later, the firm exited the African market for failing to meet its performance target. The story replays itself almost every day.

Underserved markets abound on the continent. These are markets where few providers offer products or services to address the needs of large groups of customers.  Some of the most underserved markets in Africa include healthcare, mortgage, insurance, pensions, financial services, real estate and cybersecurity. While underserved markets dominate Africa, few businesses succeed when selling to customers in those markets. When underserved markets appear to be Africa’s blue oceans, why do salespeople fail to win in these markets?

Insights from the research reveal that salespeople are oblivious of the true nature of the continent’s underserved markets. There are four common and yet largely unknown characteristics of the markets.  First, underserved markets tend to be highly regulated markets. The regulatory scrutiny in these markets tends to be higher than in other markets. This is a paradoxical reality because regulators get more involved as market needs grow. Regulators in Africa defy logic because they include the national government and informal gatekeepers such as market unions, tribal and religious associations, cultural groups, social media referrals and industry unions. While federal regulators stipulate guidelines for pricing, branding, advertising and product specification, informal gatekeepers determine who gets the chance to sell to customers in those markets. In a study of highly regulated industries in Nigeria, the lead author found that 6 out of every ten customers made purchase decisions based on word-of-mouth referrals and social media reviews rather than regulatory stipulations.  Informal gatekeepers tend to be more influential in purchasing decision-making than national regulators in Africa. Failing to understand how regulators and informal gatekeepers interact to influence purchase decisions in underserved markets is a significant flaw of salespeople operating in Africa.

Second, underserved markets are primarily fragmented in nature. Yet, salespeople in Africa tend to assume that all underserved customers are the same. Underserved doesn’t necessarily mean undiscerning. Customers in underserved markets have a varying product and market knowledge, buying power, brand awareness and price sensitivity. A one-size-fits-all approach to serving underserved customers has hampered the progress of salespeople on the continent.

Third, the dominant purchase channels for a large share of customers in underserved markets reside in the continent’s informal sector. Retailers and distributors in unstructured markets operating in the informal sector serve customers in non-conventional ways. Roles include brand endorsement, service and product education, influencers, gatekeepers, and consultants. Salespeople often have a superficial understanding of the roles of distributors and retailers in purchase decision making.

Fourth, buyers’ cultural mindset and aspirational values enable or deter brand patronage in underserved markets. Religious, family and ethnic values affect how buyers perceive offerings, especially when those offerings require delayed gratification or upfront commitments. Consider the insurance sector in Nigeria, where some potential customers refuse to purchase insurance products because “God is their insurance”. Businesses design offerings in underserved markets without considering the aspirational horizons of potential customers. These lapses may deter effective selling in underserved markets.

How can salespeople sell effectively in underserved markets? The following tactics may be helpful.

  1. Engage Gatekeepers as Allies, Not Detractors: Gatekeepers can be critical enablers for purchase frequency in underserved markets. Understanding the types of gatekeepers and their distinct roles in purchase decision making can be a huge advantage. Gatekeepers do not only provide access to potential customers but can offer market insights valuable to sales decision making. It is impossible to effectively engage gatekeepers without conducting research and staying in continuous touch. For example, national regulators in Africa make frequent policy changes that can throw companies off balance. Salespeople who understand the regulatory landscape will have an advantage over their competitors.
  2. Develop the Right Sales Competencies: Salespeople in underserved markets require slightly different competencies from those in well-served needs. Salespeople must be good at building the trust of customers and gatekeepers. Consider the case of health insurance.  Insurers in underserved markets have to build trust by growing health networks and affiliations with healthcare providers who gatekeep buying decisions. Buyers may not see the immediate befit of purchasing health insurance packages from new market entrants when these entrants have no trusting relationship with local doctors or health centres. Trust building is necessary because there is usually a high distrust for new products or services within underserved markets. Salespeople must demonstrate confidence and credibility in various ways. It is also necessary for salespeople in underserved markets to have buyer coaching skills. Buyers in underserved markets do require good product or service knowledge and handholding when it comes to an understanding of the purchase process.
  3. Target the Right Consumer Segment: Every salesperson knows how important it is to profile target customers before selling. However, few salespeople in Africa understand the consumption profiles of target customers within underserved markets. Consumption profiles indicate the portfolio of brands consumers patronise at any given time. These consumption profiles evolve as African economies’ social, economic, and political climates change. Salespeople must have real-time knowledge of the top spending items of the target customers.
  4. Tailor Products or Services to the Buyer’s Aspirational Values: Every product or service sold to underserved customers occupies a space within the aspirational horizon of buyers. While some offerings may match buyers’ aspirations, others may fall below expectations. Salespeople must understand the aspirational values of target customers and use this information to identify the aspirational position of the brands they sell. For example, salespeople in the health insurance sector can brand health insurance in underserved markets as a tool for financial empowerment that offers cheaper healthcare packages with a possible refund for non-utilization. The correct mapping can secure brand patronage and enhance customer lifetime value.

Africa’s underserved markets could be goldmines or landmines. Salespeople who make the right strategic choices, acquire the right competencies and design suitable offerings have higher chances of success in underserved markets.


Uchenna Uzo, Faculty and Academic Director, Africa Retail Academy

Osahon Okodugha, Clinical Director and Founder,  Saint Joseph’s Physiotherapy Clinic

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Uchenna Uzo and Osahon Okodugha

Uchenna Uzo and Osahon Okodugha

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Get To Know Uchenna Uzo

Uchenna Uzo

Dr Uchenna Uzo joined LBS in February 2002. He received his B.Sc and M.Sc in Sociology from the University of Lagos, and his Masters of Research in Management as well as Ph.D. in Management from the IESE Business School, Barcelona.

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