Wednesday, March 26, 2008

Truth or (In)consequence for PC Growth in East Africa

on't Don't tell the good people of Kenya, Tanzania, Ethiopia and Uganda, but a recent report by IDC labeled the East-African PC sector “inconsequential.” IDC cited the region’s weak market worth - $200m a year - compared to the world’s developed markets. While government programs are encouraging technology adoption and Internet connectivity, IDC feels the East-African region has far to go before sales compare to other faster-developing countries and the marture markets of the US, Japan and Western Europe.

IDC's characterization of East Africa is a perfect example of the shortcomings of historical-based forecasting practiced by traditional market research firms. By applying mature-market methodologies and considerations to developing-country markets, they derive results that may not fully capture the market opportunity. While unit sales in this region are still a small portion of overall PC sales (262,000 last year), this represents a 24% regional growth rate over the previous year. A more forward-looking assessment would consider market influencers such as changing demographics, increasing rates of electrification, urbanization, and literacy, and the size of the total population. These factors will increase technology adoption and support sustained growth rates that far outpace those experienced in mature markets.

Fortunately, for East Africans in search of a PC, the industry’s leading players continue to fight for market share in the region. By focusing on incremental growth and a deeper understanding of emerging-market dynamics, business managers are better equiped to discern whether a market is inconsequential or a ground-floor growth opportunity. Vital Wave Consulting’s recently-published brief helps with this analysis by describing ten key differentiators of emerging-market consumers and the corresponding implications for technology companies. To celebrate the one-year anniversary of The Nugget, Vital Wave Consulting offers “10 Facts about Emerging Market Consumers” free to our readership. Click here to download.

Also in the news:

No comments: