MBA 049: Marketing to the Informal Economy of Africa with GG ALCOCK

Elevator Pitch: Who is GG Alcock?
When people hear of GG who is an expert in the black or mass market they tend to expect a black woman and is instead met by a white man. GG grew up in a Zulu village and spent his life working in a township environment. This puts him in a unique position to understand the mass market.

Starting Out
GG’s parents were political activists and he grew up in a mud hut with no running water or electricity. He says he grew up as a Zulu child and from there the great understanding of the Zulu culture, language and black informal sectors in general. From there he moved into a township space. His business always sought opportunities within that space and he recognised a huge growth in the informal sector. He calls these sectors invisible to many, yet they make up a large part of the economy.

Education
He didn’t study marketing, instead his skill to communicate to that market comes from his deep understanding thereof. His value lies in being able to communicate and explain that environment to corporates. GG describes himself as an avid reader, especially of the business and news sectors. He also enjoys TEDtalks. GG spends a lot of time doing research, talking to traders in the market to better understand what makes them tick. Oftentimes people are retrospective in terms of research – they believe what happened in the past is a prediction of what is to happen in the future. GG tries to look for certain indicators of future trends.

Predicting Trends in the African Market
In South Africa, like with many other developing economies, the informality and individualisation of businesses is growing extensively. The informal sector allows retailers to supply different products that suit people in different parts of the country, which is the ultimate personalisation. The large retailers are not in such an adaptable position. About 100 000 foreign traders have moved into local informal spaza stores and research shows that that sector is now worth around R200 billion. They are growing at a rate of around 7-8% while the formal sector is at a much slower 2-3%. A retailer may need to adapt a product to different segments of the market.

Making Mistakes and Learning from Them
One assumes that your clients are visionary; that they are able to see the opportunities. In GG’s case nobody took notice when they tried to explain to them the potential of the mass market. Only after a report by UCT called “The Black Diamonds” did clients sit up and take notice of their strategy. You cannot assume that other people are able to see your vision. Opportunities are often not quantifiable and many companies miss the chance because they are fixated on the metrics of a business.

Differentiate Yourself from Competitors
GG feels you have to be particularly creative and innovative in the way that you do business. At the moment their competitors offer what they were offering a year ago. You need to keep up with the pace of change of the industry in which you are. Ideally you want to set yourself up as the expert in the field. By being the thought leaders and giving away insights and research on the market for free, GG’s company is perpetually positioned on the leading edge. Their competitive edge lies in constantly innovating what they offer and continually being in touch with the consumer.

Marketing
Establishing themselves as thought leaders in the market is advertising enough for them. They do this by talking at conferences, writing articles and distributing research. When they pitch to a client, they do not present their credentials, but rather lead with their knowledge of the market. The reason they do this is to add value to the client’s day. He recommends looking at PR opportunities to promote yourself - utilise social media and blogs for this purpose.