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Emerging markets Online giant, Ringier, betting on Africa for next wave of growth

“Ringier is not expecting significant growth out of Switzerland anymore. It’s not expecting its majority of growth coming from Eastern Europe or Asia. Ringier expects the majority of its growth coming from Africa”

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A Ringier office in Ghana play

A Ringier office in Ghana

Ringier first ventured into Africa in 2011 with an investment in Kenyan daily deals and discounts platform Rupu. It has since expanded to Ghana, Nigeria, Senegal, Ethiopia and Tanzania with a portfolio of 13 Internet businesses. These include Ghanaian deals site Tisu, Senegal’s classifieds marketplace Expat-Dakar and Nigerian online news platform Pulse.ng.

Ringier was established in 1833 in Zürich. It has interests in publishing, entertainment and Internet businesses in 14 countries employing 6,500 people.

The Swiss company began its march into emerging markets in the late 1980s at the end of the Cold War. Legend has it that one senior executive, Thomas Trüb, carried 50,000 Swiss francs in a briefcase and traveled to the Czech Republic to set up Ringier’s first business in Eastern Europe. Today, Ringier is one of the largest media enterprises in the region. In the 1990s, Trüb again led Ringier’s expansion to Asia by establishing magazines in China and Vietnam.

“Five years ago Trüb told me he had one last play, to open up Africa for Ringier,” says Julian Artopé, director of Ringier Africa.

An in-house presentation quotes Ringier CEO Marc Walder making remarks that illustrate just how important Africa is for the Swiss company.

“Ringier is not expecting significant growth out of Switzerland anymore. It’s not expecting its majority of growth coming from Eastern Europe or Asia. Ringier expects the majority of its growth coming from Africa,” said Walder.

“I think this shows very clearly what kind of expectations the company has for Africa. We have a lot of focus from headquarters. We get the technology, we get the money, we get people traveling here training the local teams – which is all very beneficial. I think so far, everybody is really happy with our growth rates in Africa,” says Artopé.

Taking a long-term approach

Ringier’s strategy is to go in early, quickly secure market share and then focus on long-term expansion. Its recent entry into Ethiopia – where it is piloting a classifieds site – is a case in point. Although Ethiopia has a population of over 90 million, according to 2014 statistics only about 25 million people had mobile phones while a mere 2% had access to the internet.

Ethiopia also has a less advanced banking system compared to neighbouring countries, and mobile money is still in its infancy.

“But we think Ethiopia is still super interesting. Yes internet penetration is very low there so it will take some time for us to grow, but from a macroeconomic perspective it is quite an interesting market,” explains Artopé.

“It comes down to the long-term approach, what we believe will be the case not in two years, but in ten years. We have been looking at Uganda for four years now and although we think it is a very interesting market there is no rush for us to enter it now. We will still be able to win a few years down the line if we enter the market. There are some countries that will outperform Ethiopia in two years, but 10 years from now, I dare to say that Ethiopia will definitely be one of the biggest markets in Africa.”

Expansion

Ringier is hoping to expand into more countries across the continent with e-commerce platforms, classifieds, digital marketing and content sites. But opening up in new markets is challenging, says Artopé. It is hard to operate with a lack of suitable local talent and poor internet connectivity.

“In Nigeria, as a back-up you need a big generator and enough diesel supply to fuel your operations.”

Nonetheless, Artopé says West Africa has been “very rewarding” for the company.

“We started in Nigeria two years ago and within a short time we had relevant traffic levels due to the sheer size of the market and the novelty approach we took. We have developed there an interesting model which we believe can be expanded across Africa.”

He adds Ghana has been a “good market” for Ringier to test its expansion approach. In Ghana the company has replicated its Nigeria-based news platform and Kenyan e-commerce site.

“Because Ghana is a small country you see immediate impact and get good feedback. It is a good place to get learnings for your expansion strategies.”

But there are also marked differences between countries. On the Kenyan e-commerce site Rupu, more people buy services such trips to the coast and spa weekends, while with Ghana’s Tisu platform customers mostly purchase products such as refrigerators and TVs.

“This is because in Ghana the retail infrastructure is not as advanced as it is in Kenya. So even as we expand and apply learnings from country to country we have to always consider how different one market is from the next.”

 

Credit: Dinfin Mulupi,  howwemadeitinafrica.com

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