Africa Focus
Africa Focus
ENTERING AFRICA
Sebastian Meitz outlines lessons from emerging markets to inform a move into Africa
Nine miles . That ’ s all that separates Africa from Europe in the Strait of Gibraltar . However , it ’ s not only geographical proximity that Africa and Europe , especially Central and Eastern Europe , have in common . The two continents share more than you might initially think .
After emerging from communist rule in 1989 , Central and Eastern Europe was perceived by many Westerners as the land of massive opportunities , growth and potentially high returns on investments . They ’ re characteristics that describe today ’ s Africa equally well . The transition economies of Poland , Hungary , the Czech Republic and the Baltic States attracted foreign investors and looked for the best and most efficient ways to develop . Also , the gambling industry came into the spotlight of international players who were ready to jump on the growth bandwagon .
While closely observing and taking part in the growth of the gambling industry in Central and Eastern Europe , we identified several aspects that need to be considered when working in emerging and transition economies .
Strategic sustainability Market attractiveness usually connects with a rapid inflow of capital seeking to gain high returns on their investments . In industries as vulnerable as gambling , where the general population is one of the critical stakeholders , finding the right balance between increasing profits , regulation and consumer protection should be a priority for management teams .
Adapting an effective sustainability strategy demonstrates not only compliance in the highly regulated market of gambling , but also increases a company ’ s reputation in the eyes of society .
Cultural awareness One of the most widespread and often made mistakes is ignoring the culture of the targeted population . The fact that a particular game works well in some countries doesn ’ t necessarily mean it will succeed elsewhere . The way somebody lives and spends their free time impacts customer behaviour and their preferences .
Merely transplanting a market strategy or product without first considering the cultural aspect , has often proven to be inefficient
Sebastian Meitz is co-founder and managing partner of Gaming 5.0 . He has extensive experience in gambling and management consulting . Gaming 5.0 works hand in hand with C-level executives and their teams on strategy , products , and business processes , helping their companies thrive .
and resulted in a lack of interest and brand deterioration . A wrongly positioned and placed product can quickly turn into a waste of time and energy .
Regulatory changes One characteristic of emerging economies is changing regulation . Under the influence of political agendas , external stakeholders or by emulating solutions from other countries , regulators tend to either under- or overregulate gambling markets . The former leads to a rapid development of grey or even black markets , negatively impacting people and the industry . Meanwhile , the latter often results in introducing legislation that makes it impossible for companies to grow or even function .
In both instances , regulators find it extremely difficult to take advantage of a healthy development of the gambling industry . Finding the right balance between liberalisation and control is a process in which both the regulator and operators should take an active part .
Applying best practices The list of essential elements required to achieve success in emerging and transition economies goes beyond strategic sustainability , cultural awareness and regulatory affairs . Central and Eastern Europe , as well as other emerging and transition economies in Europe and Asia , can serve as an excellent source of best practices relevant to today ’ s Africa .
Adapting and applying them according to your needs will be more efficient with an experienced and battle-proven partner .
iGamingBusiness | Issue 112 | September / October 2018 77