Small retail eats Big, Bad policy is Good and Sanctions means more Revenue - upside is down in Africa this week

a QCX Africa publication

Hi QCX People!

Between illegal immigration apparently being a good way to attract financial aid, and the downstream implications of the Russia-Ukraine war, geopolitics strikes again, and we’re really intrigued with the dynamics!

Today we’re highlighting some interesting movements across the continent, and as always some tips to take full advantage them for your activities in Africa.

Big Retail becomes small retail as Shoprite exits to Nigerian firm who will franchise the supermarket (AfricaNews)

• Why it actually matters: African retail has long been dominated by micro-retailers like spaza shops and small, independent franchisees. The prospect of outsized returns for bigger firms has been pinned on this status quo changing and retail being gobbled up by Big Retail. But Shoprite’s exit of Africa’s largest economy, coupled with the acquirers plans to decentralise the chain, suggest that perhaps the independent micro-retailer model will prevail for the local context.

• Summary: Africa’s biggest supermarket retailer, Shoprite, has struck a deal to sell its Nigerian operation to a local firm who intends to change from an ownership model to a franchise one. Speculation is rife as to whether the core driver of the move is politically-induced by bad economic policy, or if the foundational retail model on which Shoprite is built simple isn’t working in Nigeria.

Marketing Insight: When running digital marketing within a franchise group, it’s best to centralise operations to ensure conformity in messaging and reduce costs across the board.

E-commerce Franchise Tip: Franchise models get battle tested within an e-Commerce environment as all branches need to present a unified pricing / business model.

Tunisia & Europe - a loveless marriage? (AfricaNews)

• Why it actually matters: Ironically, bad policy can turn out to be good policy sometimes… Uncontrolled illegal immigration by Africans, through Tunisia and into the EU, has turned out to be a huge bargaining chip for the country, which is netting Tunisia millions in aid packages and infrastructure partnerships in exchange for stemming the flow of migrants.

• Summary: The European Union and Tunisia have struck a deal on the back of much recent, illegal immigration activity that has been taking place as migrants funnel through Tunisia into EU states. Under the deal, Tunisia will take measures to stem the flow of illegal migrants that have been flooding through it’s doors to get into the EU, and ‘in return’ (not explicitly stated as such, but obvious enough) it will receive various aid packages from the EU including €65m worth of funding for 80 Tunisian schools.

Reject Club - Countries with downstream hurt are rallying to BRICS (AfricaNews)

• Why it actually matters: Trade between Russia and Africa is up 35% in the first half of 2023, according to Russia. With BRICS alliances becoming more entrenched and dozens of countries now looking to join the alliance to lessen the downstream blow of sanctions against Russia, either trade is going to keep expanding rapidly, or political fallout is imminent as the West pressures BRICS to parley.

• Summary: 40+ countries most hurt and most incapable of absorbing economic blowout resulting from Western sanctions against Russia (in the wake of their invasion into Ukraine), have expressed interest in or outright applied to join the BRICS trade agreement. South Africa, as host of the upcoming BRICS summit, is under pressure to reject these nations, as expansion of the alliance would provide Russia with more export destinations and undermine sanctions.

Marketing Insight: With Tech companies like Shopify suspending operations in Russia, open source Tech like Wordpress / Woo Commerce have been placed in awkward situation of having to govern “anti-war plugins” and polices on a relatively open marketplace.

Fact: ‘Q’, ‘C’ and ‘X’ are the English denotations for the 3 most common linguistic clicks in African languages. If you can say all three clicks, three times in a row fast, you can legally call yourself African.