{"id":17091,"date":"2016-11-18T00:18:40","date_gmt":"2016-11-18T05:18:40","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/data-pioneering-how-africascan-creates-data-in-markets-previously-devoid-of-digital-presence\/"},"modified":"2016-11-18T00:19:57","modified_gmt":"2016-11-18T05:19:57","slug":"data-pioneering-how-africascan-creates-data-in-markets-previously-devoid-of-digital-presence","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/data-pioneering-how-africascan-creates-data-in-markets-previously-devoid-of-digital-presence\/","title":{"rendered":"Data Pioneering: How AfricaScan Creates Data in Markets Previously Devoid of Digital Presence"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"BlueSpoonKiosk\u30fcInnovative traditional trade Kiosk in Kenya\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/A_vItkAtX2U?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>Sub-Saharan Africa, with population increasing to 1.3 billion by 2025<a href=\"#_edn1\" name=\"_ednref1\">[i]<\/a> and more of those people emerging from poverty,<a href=\"#_edn2\" name=\"_ednref2\">[ii]<\/a> has become an area of potential for many global retailers. There are many challenges, such as political instability, and unknowns, such as who shops where,<a href=\"#_edn3\" name=\"_ednref3\">[iii]<\/a> to doing business in Africa. AfricaScan is beginning to tackle the latter issue.<\/p>\n<p>AfricaScan is a marketing research and consulting firm that provides strategic marketing advice to companies trying to sell products in sub-Saharan Africa. Founded in June 2014 and led by CEO Jun Fukuyoshi (HBS MBA 2008), the Tokyo-based social enterprise helps clients develop understanding of consumers through the overarching service areas of research planning, analysis of point-of-service (POS) data, test-marketing in stores, and marketing strategy. AfricaScan also provides access to its consumer panel data.<\/p>\n<p><strong>Table 1. AfricaScan Services<\/strong><a href=\"#_edn4\" name=\"_ednref4\">[iv]<\/a><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-16772\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18-300x152.png\" alt=\"picture2\" width=\"540\" height=\"274\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18-300x152.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18-768x388.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18-1024x518.png 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18-600x303.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Picture2-18.png 1731w\" sizes=\"auto, (max-width: 540px) 100vw, 540px\" \/><\/a><\/p>\n<p>To deliver on its promise, AfricaScan employs people with local knowledge as well as industry and marketing experts with the ability to advise clients to find the key drivers for success of their business in Africa.<a href=\"#_edn5\" name=\"_ednref5\">[v]<\/a> Further, AfricaScan remains close to the consumers by operating twelve franchised retail grocery stores called Blue Spoon Kiosks, which sell a wide range of products, including food, stationaries, and personal care goods. Store sales range from about $2,500 to $4,000 per month.<a href=\"#_edn6\" name=\"_ednref6\">[vi]<\/a><\/p>\n<p>AfricaScan utilizes digital technology to develop its business and operating model through an iPad inventory management app, which records every Kiosk transaction and thus gives AfricaScan the ability to track consumer purchasing behavior. It also helps AfricaScan and each individual Kiosk manage inventory orders. Resulting data includes over 10,000 consumers and gives AfricaScan the ability to know who bought what when, allowing Fukuyoshi and his colleagues to provide meaningful insights to their clients.<\/p>\n<p>A significant part of the retail market in sub-Saharan Africa is through informal channels.<a href=\"#_edn7\" name=\"_ednref7\">[vii]<\/a> In Kenya, about 70% of retail stores are categorized as traditional-trade, which includes kiosks (called duka) and outdoor markets; the remaining 30% are categorized as modern-trade, or supermarkets of various sizes.<a href=\"#_edn8\" name=\"_ednref8\">[viii]<\/a> Local farmers mostly sell agricultural products at the outdoor markets, which operate once a week in each residential area. Shopping patterns and customers at these retail store segments differ: while traditional-trade stores are places where those who are low- and middle-income shop daily, the modern-trade stores are places where those who are middle- and high-income shop weekly and the low-income shop less frequently for bulk purchases. Traditional-trade stores are located all over Kenya, while modern-trade stores are located in Nairobi.<a href=\"#_edn9\" name=\"_ednref9\">[ix]<\/a><\/p>\n<p>Traditional-trade stores in Kenya, including kiosks, sell products without a price tag (i.e., prices can be negotiated), but at the Blue Spoon Kiosks, prices for each product are labeled and usually cheaper compared to other locations in the community.<a href=\"#_edn10\" name=\"_ednref10\">[x]<\/a> Even fewer stores keep a digital record of purchases, making the Blue Spoon Kiosks collection of every transaction unique.<\/p>\n<p>As a young business addressing this nascent area, AfricaScan has potential for huge growth. Below are additional steps AfricaScan can consider implementing:<\/p>\n<ul>\n<li><strong>Continue to expand the number of stores.<\/strong> As a business aiming to provide clients with insight into what it means to sell in Africa\u2019s retail market, twelve kiosks and roughly 10,000 consumers, about 0.02% of the Kenyan population, is not enough. At its current scale, it is relatively easy for a competitor to replicate its model. AfricaScan can capitalize on their current momentum, using the positive reputation from kiosk shoppers as reliable and from the Blue Spoon Kiosk owners as having a system that improves inventory management, to convince other kiosk owners to join the Blue Spoon franchise.<\/li>\n<\/ul>\n<ul>\n<li><strong>Partner with supermarkets to round out consumers in panel data.<\/strong> Similarly, AfricaScan\u2019s current dataset is skewed to the low- and, in part, middle-income population. It doesn\u2019t provide much insight into the behavior of the middle- and high-income population. For example, it would be useful to know how a middle-income consumer chooses between buying at kiosks and supermarkets. In theory, AfricaScan can quickly add a lot of volume to its dataset if it partnered with large supermarket chains, such as Nakumatt and Naivas.<\/li>\n<\/ul>\n<ul>\n<li><strong>Consider the impact of the online (or mobile ordering) space. <\/strong>To add further fragmentation to the market, a young but up-and-coming part of the retail sector in Africa is online. This space includes retail orders made over the phone. Eighty percent of Kenyans now have a mobile phone, and of the Kenyan adult mobile phone users, 61% use their phones to make or receive payments.<a href=\"#_edn11\" name=\"_ednref11\">[xi]<\/a> In 2013, mobile payment platforms processed over $2 billion worth of transactions.<a href=\"#_edn12\" name=\"_ednref12\">[xii]<\/a> Business done online and via mobile technology is expected to increase steadily over time.<a href=\"#_edn13\" name=\"_ednref13\">[xiii]<\/a> Even if AfricaScan doesn\u2019t take on data collection or consulting in this space, online retail will inevitably be a large part of the retail story soon enough.<\/li>\n<\/ul>\n<p>As AfricaScan proves its model and guides global retailers to successfully drive business in Kenya, I\u2019m excited to see the company expand into other countries over the long term.<\/p>\n<p>(800 words)<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"#_ednref1\" name=\"_edn1\">[i]<\/a> World DataBank. 2016. \u00a0Population Estimates and Projections. The World Bank Group [ONLINE] Available at: <a href=\"http:\/\/data.worldbank.org\/data-catalog\/population-projection-tables\">http:\/\/data.worldbank.org\/data-catalog\/population-projection-tables<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref2\" name=\"_edn2\">[ii]<\/a> Y. Agyenim-Boateng, et al. 2015. Winning in Africa\u2019s consumer market. <em>McKinsey &amp; Company Article<\/em>. Posted July 2015 [ONLINE] Available at: <a href=\"http:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/winning-in-africas-consumer-market\">http:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/winning-in-africas-consumer-market<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref3\" name=\"_edn3\">[iii]<\/a> \u00c1.M. Ari\u00f1o. 2015. Launching Consumer Brands in sub-Saharan Africa. <em>IESE Business School, University of Navarra \u2013 Africa from Africa<\/em>. Posted 25 March 2015 [ONLINE] Available at: <a href=\"http:\/\/blog.iese.edu\/africa\/2015\/03\/25\/launching-consumer-brands-in-sub-saharan-africa\/\">http:\/\/blog.iese.edu\/africa\/2015\/03\/25\/launching-consumer-brands-in-sub-saharan-africa\/<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref4\" name=\"_edn4\">[iv]<\/a> AfricaScan. 2015. Services [ONLINE] Available at: <a href=\"http:\/\/www.africascan.com\/en\/services\/\">http:\/\/www.africascan.com\/en\/services\/<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref5\" name=\"_edn5\">[v]<\/a> AfricaScan. 2015. About us [ONLINE] Available at: <a href=\"http:\/\/www.africascan.com\/en\/about\/\">http:\/\/www.africascan.com\/en\/about\/<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref6\" name=\"_edn6\">[vi]<\/a> AfricaScan. 2015. Retail stores [ONLINE] Available at: <a href=\"http:\/\/www.africascan.com\/en\/retailstores\/\">http:\/\/www.africascan.com\/en\/retailstores\/<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref7\" name=\"_edn7\">[vii]<\/a> Deloitte Africa Consumer Business. 2015. African Powers of Retailing: New Horizons for Growth [ONLINE] Available at: <a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/ng\/Documents\/consumer-business\/ng-african-powers-of-retailing-new-horizons-for-growth.pdf\">https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/ng\/Documents\/consumer-business\/ng-african-powers-of-retailing-new-horizons-for-growth.pdf<\/a>, accessed 16 November 2016, p5.<\/p>\n<p><a href=\"#_ednref8\" name=\"_edn8\">[viii]<\/a> The Nielsen Company. 2015. Africa: How to navigate the retail distribution labyrinth [ONLINE] Available at: <a href=\"http:\/\/www.nielsen.com\/content\/dam\/nielsenglobal\/ssa\/docs\/reports\/2015\/africa-report-navigating-the-retail-dist-labyrinth-feb-2015.pdf\">http:\/\/www.nielsen.com\/content\/dam\/nielsenglobal\/ssa\/docs\/reports\/2015\/africa-report-navigating-the-retail-dist-labyrinth-feb-2015.pdf<\/a>, accessed 16 November 2016, p13.<\/p>\n<p><a href=\"#_ednref9\" name=\"_edn9\">[ix]<\/a> AfricaScan. 2015. Shopping Habit and Practice at Supermarkets and KIOSKs [ONLINE] Available at: <a href=\"http:\/\/www.africascan.com\/pdf\/Shopping_Habit_and_Practice_Research_AfricaScan_Sample.pdf\">http:\/\/www.africascan.com\/pdf\/Shopping_Habit_and_Practice_Research_AfricaScan_Sample.pdf<\/a>, accessed 16 November 2016, p3.<\/p>\n<p><a href=\"#_ednref10\" name=\"_edn10\">[x]<\/a> AfricaScan. 2015. Retail stores [ONLINE] Available at: <a href=\"http:\/\/www.africascan.com\/en\/retailstores\/\">http:\/\/www.africascan.com\/en\/retailstores\/<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref11\" name=\"_edn11\">[xi]<\/a> Pew Research Center. 2015. Cell Phones in Africa: Communication Lifeline. Pew Research Center \u2013 Global Attitudes and Trends. Posted 15 April 2015 [ONLINE] Available at: <a href=\"http:\/\/www.pewglobal.org\/2015\/04\/15\/cell-phones-in-africa-communication-lifeline\/\">http:\/\/www.pewglobal.org\/2015\/04\/15\/cell-phones-in-africa-communication-lifeline\/<\/a>, accessed 17 November 2016.<\/p>\n<p><a href=\"#_ednref12\" name=\"_edn12\">[xii]<\/a> Y. Agyenim-Boateng, et al. 2015. Winning in Africa\u2019s consumer market. McKinsey &amp; Company Article. Posted July 2015 [ONLINE] Available at: <a href=\"http:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/winning-in-africas-consumer-market\">http:\/\/www.mckinsey.com\/industries\/consumer-packaged-goods\/our-insights\/winning-in-africas-consumer-market<\/a>, accessed 16 November 2016.<\/p>\n<p><a href=\"#_ednref13\" name=\"_edn13\">[xiii]<\/a> Deloitte Africa Consumer Business. 2015. African Powers of Retailing: New Horizons for Growth [ONLINE] Available at: <a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/ng\/Documents\/consumer-business\/ng-african-powers-of-retailing-new-horizons-for-growth.pdf\">https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/ng\/Documents\/consumer-business\/ng-african-powers-of-retailing-new-horizons-for-growth.pdf<\/a>, accessed 16 November 2016, p30.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Exploring the business of a sub-Saharan retail consultancy who operates their own stores to generate data.<\/p>\n","protected":false},"author":1832,"featured_media":17092,"comment_status":"open","ping_status":"closed","template":"","categories":[89,2029,1902,16],"class_list":["post-17091","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-africa","category-digitization","category-kenya","category-retail"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - 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