Should African Entrepreneurs Target the Few Affluent or the Many Low-Income Consumers?

This article first appeared on Afridigest, an Africa-focused business media brand. Get smarter about business & innovation across Africa, subscribe to Afridigest.

In 3 Things Driving Entrepreneurial Growth in Africa, Ronald Klingebiel, professor of strategy at the Frankfurt School of Finance and Management, and Christian Stadler, professor of strategic management at Warwick Business School, identify (from an interview of 100 entrepreneurs) three routes to investment & entrepreneurial success in the Africa of today:

• A focus on affluent customers at the top of the pyramid,
• Control over land, industrial equipment, and other factors of production, and
• Innovation in distribution to reach a widely dispersed customer base

The authors conclude:

“…It is paramount to bear in mind that most money is made [in Africa today] in ways so conventional that Western investors might need to take off their augmented reality goggles to spot them.”

While the authors are correct that today large-scale economic success in Africa comes predominantly from more traditional models & industries, and Western investors in African emerging/frontier markets need to adjust their…