Yes, there is abundance in Africa. But unlocking that abundance is not automatic because we have not witnessed the rise of all (we’re just having the rise of few). To win in Africa, you must improve your pricing strategy.
In any product I bring to the market, I put real efforts on pricing engineering to get things right. Our startups in Tekedia Capital also get that from me: no matter how great the products are, people must afford them before they can use them. Unlike America where shopping is part of entertainment (people buy things and after some months, they donate those items. Check, the tags have not been removed), in Africa, we are value-shoppers because free money is limited.
How do you price? You need to go back to this plot (above). It is called the Fortune at the middle of the pyramid: “the most significant opportunity for African B2C startups lies with consumers who earn between $4 — $8 per day … This is largely because that income band holds the highest concentration of discretionary spending power on the continent, as the graph below shows.”
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Strategic pricing does not mean giving things away, it means finding a way to have as many people as possible while capturing more value where possible. That is the playbook of sachetization – and we do a lot of it in Tekedia. In our school, we separated the costs of the main program, review of homework, review of projects, etc so that people can come in at their respective purse capacities. If you lump all together, you could price-out many learners. Put efforts on your #pricing!
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