Wired up to the Nigerian connection
Nick Durrant, Director of Bluegrass Digital, in conversation with Jeremy Kuper, GTA Editor, about the opportunities, challenges and cultural differences of doing business in Africa.
GTA: Describe your business.
Nick Durrant: Bluegrass digital tends to focus on partnering with agencies. We are a digital agency, so we basically develop websites, content management systems, web mobile applications, social or Facebook applications – broadly we call ourselves a digital production agency.
We’re a slightly more technically-led than creatively-led company, so we tend to work with creative companies – for example, ad agencies or communications companies, where they will use us really for our technical skills in implementing a concept.
In one instance we worked with JWT (J Walker Thompson) in London and with them we manage (as technical partner) the Lego Duplo account for Eastern Europe. We do all the web development work and implement the content management system for them – it’s fairly technical work.
Similarly, we’ll work with maybe an agency in South Africa, one of the big ones, and deliver something like a website for Converse, or an iPad application for Honda cars, for a motor show or an event. Or we work with a communications company in Nigeria, for example, to do work for the Dettol brand and some Standard Bank digital mobile banners [for Nigeria]. So it’s quite a broad range of work across web-mobile and social platforms essentially.
GTA: Tell more about your Nigerian and African ventures.
ND: We are in the process of doing a trade mission with Wesgro, a Western Cape Government initiative to try and take companies from the Cape abroad, to Kenya or Ghana, for example, to meet with companies on the ground.
The reason companies in East and West Africa, for example, still tend to work with firms outside their countries, is a lack of service delivery on the ground, in terms of running a business and delivering solutions, especially for larger brands. They’ll tend to come to South Africa or go to Europe to find the skills, and there’s a status associated with working with a foreign company.
GTA: What’s the difference of doing business in Nigeria compared to Britain or South Africa?
ND: I suppose doing business in the UK – and I spent 15 years there – is somewhat more [of] a trust-based environment. A handshake and a nod and you know you’ve done the deal, so to speak. In SA there’s slightly less trust. Going into Africa, it probably just gets worse in terms of doing business, so in terms of contractual arrangements and making sure you get money up front, those are all important.
I know from other companies that have been in there, that that’s what needs to happen. I know of cases, for example, where they almost get the invoice paid before they arrive at the airport.
And I think companies recognise that there is a lack of trust in the business world, and that’s the key to trying to get into Africa – we’re not really looking to physically set up shop in the country. I mean Nigeria has a complex business structure, so it’s difficult to do that. Our reach is really going to be through partnerships, with people we meet and trust who are running some form of business on the ground where we can partner.
What most people have done is won a client which has then led them to have to set up some infrastructure and generally that client has grown into the neighbouring territory. That’s how a lot of the smaller companies have done it…It’s all about collaboration.
GTA: You’re paid in US dollars when you work with Nigeria?
ND: Certainly in Nigeria, everything is US dollar-based. I’m involved in a pitch there in Abuja with a client who is one of the largest pension fund administrators in Nigeria, and everything was US dollar-based. From a budget perspective, budgets are generally pretty decent in those parts of the world. People pay for luxury goods, so everything is quite expensive.
GTA: What kind of market research have you done for this African project and how does it differ from doing business in SA or the UK?
ND: It’s been really talking to businesses. I mean in South Africa a lot of companies – there are a few in Cape Town – have only clients in Africa. In fact there’s one company that has only one client, in Nigeria, and that’s all they service, and they do it from Cape Town, and they fly out there to do the meetings and that sort of thing.
There’s a lot of that going on, and they’re now in a position where they almost have to put someone on the ground there and almost set up a satellite office an operation. If you’re getting into business where you need to provide an ongoing service to a client, that is inevitable.
But it’s not really a strategy of ours. Our strategy is to work with partners where we can, and then to use them to get African business. So the knowledge gathering has been an ongoing process, through talking to business people in the relevant territories, like Nigeria or Ghana or Kenya, and talking to businesses that have been there before. So there’s been quite a bit of discussion and the work we’ve done remotely. We haven’t had to be there on the ground.
We’ve done a handful of projects in Nigeria already. The quality of the work we deliver is the same for anyone. We have to work out how we’re going to get more of that work, and grow that African channel.
GTA: You’re spotting this gap in the market, which possibly exists because of a lack of trust, and because of negative perceptions about doing business in Africa. Are these new frontiers that are just opening up, that have the potential and the money, but just for some reason nobody has done it before?
DN: I think we shouldn’t forget that there are plenty of big companies in those territories already – international brands that have been in there for years probably. The Dettol brand is run by Reckitt Reisinger; Unilever are everywhere in Africa. And MTN from South Africa owns a lot of the cellular networks in those territories. The big corporates moved in there years ago, but I think there’s a lot more business for the smaller businesses.
In a way it’s growing fast, but in a way these are early days still. There’s still a lack of knowledge, and therefore, fear. People probably think, ‘That’s not our focus, we’ve got enough work in SA or we’ve got enough work in Europe, we don’t need to go there’. But you’ve probably missed [an] opportunity otherwise because as time goes on, if you don’t get your foot in the door, you’re not going to be able to put your stake in the ground and get some market share – no matter how small.
GTA: Do you think South African companies are particularly interested in these African countries, and especially bold in their explorations into Africa?
ND: I think South Africa has been slow in getting into Africa. I mean that’s the kind of common consensus, because China, these European companies and so forth have been doing business and setting up infrastructure in many African countries for years.
But there certainly are large companies from South Africa that have been fairly forward-thinking, that have moved into those areas, and that have probably taken up large chunks of market – like MTN and Multichoice-DSTV, the TV channels. Those are the types of services that have been established. It’s logical that they’ve moved in, starting in Southern Africa and then moving deeper into Central Africa. Some of the companies have been there for 15-20 years already.
I think now it is becoming mainstream, everyone’s jumping on the bandwagon so to speak – they don’t want to miss the train or the boat…What is probably the fastest growing market in the world, paying in dollar-based currency, is attractive to anyone.
Nick Durrant is a director of Blueskygroup