Group85@Sophia: ‘Africa has become a playground for globalisation’

“Africa is not on autopilot to some gilded age, warns Kingsley Moghaly, deputy governor of Nigeria’s central bank and author of Emerging Africa. Waht is being faisely celebrated as Africa’s rise is simply the continent having become a playground for globalisation, he says, adding that without job creatin to accompany population growth Africa will have to cope with armies of unemployed young people in a few decades’ time.”

Link for the video:

http://www.theguardian.com/global-development/video/2014/aug/04/africa-globalisation-jobs-kingsley-moghalu-video

Group 3 – IB Suzhou – Fear of the virus boosts e-commerce in Africa’s most-populous nation

Nigeria’s online retailers – Sep 20th 2014

E-bola

Fear of the virus boosts e-commerce in Africa’s most-populous nation

WHAT if Ebola spread beyond the smaller west African states, where the outbreak is concentrated, and took hold in Nigeria, Africa’s most-populous country? International epidemiologists tremble at the thought. Ordinary Nigerians worry, too—so much so that the country has seen a boom in online shopping, as some people avoid going out into crowded markets and shopping malls.

Access to the internet and e-services is growing fast in Nigeria, a country of 173m people, more than 10m in Lagos alone. Online retailers must contend with poor roads, especially in rural areas, and suspicion of online payments (they accept cash on delivery). Ebola is giving an unexpected push to nascent e-commerce, after the country suffered its first case in July, when Patrick Sawyer, a Liberian civil servant, died in Lagos. At least six others have perished since.
Jumia, the biggest e-commerce site, says orders have tripled since the outbreak. It has seen a big increase in demand for sanitation products—such as hand-wash, bleach and other cleaning agents—which have supplanted mobile phones as the bestselling products. Other online retailers, among them Konga and Kaymu, also report a large increase in sales of cleaning supplies.

E-commerce firms say they have a big contribution to make to preventing the spread of Ebola, not only by stocking and delivering hygiene products but also by promoting health-and-safety standards among staff and educating customers. “E-commerce allows business to be done to a large scale by a limited number of people who can be held to a controlled regime, to limit the spread of communicable diseases,” says Sim Shagaya, chief executive of Konga.

Nigerian websites have also sprung up to help educate the public, such as www.ebolafacts.com, which registered over 2m visits in its first month. It warns readers against unproven remedies such as relying on prayer, drinking salt water and eating bitter kola, a folk remedy for colds and an aphrodisiac. Seyi Taylor, of Big Cabal Media, which launched the site in July, says that the internet can spread information faster than diseases like Ebola can be transmitted.

http://www.economist.com/news/middle-east-and-africa/21618915-fear-virus-boosts-e-commerce-africas-most-populous-nation-e-bola

Group11@Paris

Kingsley Moghalu: ‘Africa has become a playground for globalisation

Africa is not on autopilot to some gilded age, warns Kingsley Moghalu, deputy governor of Nigeria’s central bank and author of Emerging Africa. What is being falsely celebrated as Africa’s rise is simply the continent having become a playground for globalisation, he says, adding that without job creation to accompany population growth Africa will have to cope with armies of unemployed young people in a few decades’ time

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Source

Group108@Sophia Success Story : Bharti Airtel

How an Indian Telecommunication leader reshaped the ecosystem in Africa

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Of course, offshoring is a great global trend since the 1990s, developed countries offshore to reach new markets with high potential or to benefit from the low costs of labor in developing countries. But what about the internationalization of emerging market firms? The Indian telecommunication leader Bharti Airtel is a great example of a successful international strategy.

In June 2010, Bharti Airtel, India’s largest mobile services operator, acquired the African assets of Bahrain-based Zain Telecom for $10.7 billion. It was the largest cross-border deal ever seen in emerging markets. The firm had decided to replicate the business model it had developed in India in Africa. The executives thought at that time that they could become the largest telecom provider in Africa thanks to the lessons they had learn in the Indian market.

Although the idea seemed brilliant at the beginning, Bharti’s executives soon faced challenges they did not expect : differences between Indian and African employees, poorer infrastructure than they had expected with higher-than-anticipated costs, a monopolistic distribution network, strong competitors, a weak partner ecosystem, and a market that was unresponsive to tariff cuts while Bharti’s strategy consisted in high-volume low-cost telecom model.

In 2012, the company understood they could not run their business in Africa as easily as they thought and changed its business model : customer service operations and IT were outsourced and a unified, culturally integrated brand was launched. By the end of that year, Bharti Airtel provided 189,416,000 GSM mobile in India & South Asia and accounted 61,687,000 GSM mobile customers in Africa with a presence in 18 countries in this continent.

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Profit margins and market share keep on growing and both India and Africa took the benefit of this internationalization operation : Bharti entered a new market with high potential while Africa got its entire telecom ecosystem reshaped. On September 12th 2014, the company launched its 16th 3G network in Africa contributing again in the development of this area. It was even able to make economies of scale through selling more than 3,500 of its mobile phone masts to Eaton Towers, an African telecom tower company that will take care of the maintenance.

This success story is a great example to show us that emerging market firms are also able to internationalize and to become global actors thanks to their innovation and the lessons they learnt in their home countries.
Sources:

  • Case Study, Bharti Airtel in Africa by Krishna G. Palepu, Tanya Bijlani (Harvard Business School)
  • http://www.airtel.com/
  • http://articles.economictimes.indiatimes.com/2014-09-12/news/53851224_1_bharti-airtel-3g-network-3g-service
  • http://www.reuters.com/article/2014/09/08/us-bharti-airtel-africa-towers-idUSKBN0H30B220140908