As a brand SA has been through testing times in recent years with the effects of state capture still being felt through the deterioration of government services with consequences for the economy.
The private sector has not covered itself in glory either, with incidents of corporate fraud in individual public companies that destroyed shareholder capital. The challenges are manifold, but there are also positive stories of resilience and success. Business Day caught up with Brand Finance Africa MD Jeremy Sampson for a look at how brands are navigating the challenges, and other megatrends in the industry.
Q: SA is confronted by many disparate challenges, including increasingly dysfunctional municipalities meant to be at the coalface of service delivery. The acute electricity supply shortage continues to undermine growth prospects as reflected in the weaker rand-dollar exchange rate. From your vantage point, how would you describe and characterise brand SA, relative to say 15 years ago. Do you think it has become a hard sell or is it an overly pessimistic assessment of the country given the ever-changing dynamics?
A: I think the frustration for many of us is that we can see the huge potential the country has but it punches way below its weight often due to inept leadership. We need public-private partnerships. We have had enough talk, it’s time for action. Thirty years ago, there was a great deal of goodwill and even sympathy for SA. That has been frittered away and yes, I think it’s a hard sell. After all, three decades is a long time in today’s world as we lag behind while many countries, especially in Asia, are in turbocharge mode.
Q: We are heading towards national elections in 2024, which many believe could mark a turning point in the country’s democratic era with the ANC’s share of national vote likely to slip below 50% for the first time. Without necessarily predicting the actual outcome, do you think the messaging by various political players and organisations is effectively getting to potential voters?
A: A good question. Personally I think the efforts by the various parties on the whole are poor. There is little overarching strategy, no consistent messaging, no memorable sound bites, mixed messaging and a lack of focus. A brand is a promise made and a promise kept. When people who have been in control for decades say what they are going to do but have not done it, then I have a problem. If trust is the key value, who can you trust? Certainly not the present government. But then, the electorate desperately needs viable alternatives rather than lots of options with little importance.
Q: It’s no exaggeration to say that corporate SA is taking strain from the erratic power supply and constrained consumer environment. However, we have seen a few JSE-listed SA Inc companies holding up decently in their recent reporting period. Obviously, there are many moving parts to the success, or failure, of an individual company, but how critical is it that companies invest in their brands and what has been the trend over years for consumer-facing companies in particular?
A: Thirty years ago tangibles were the most important assets. Not anymore, it’s about intangibles now: intellectual property, patents, copyright and brands. Just look at the US tech brands, the FAANGS [Facebook/Meta, Amazon, Apple, Netflix, Google/ Alphabet], to which you can now add Microsoft and Tesla. If you had invested in a basket of the brands I mentioned a decade ago you would be a multimillionaire. Brands are or should be a company’s most valuable asset.
Q: The pandemic was devastating to the global economy, but it also cultivated and fostered innovation among businesses as they sought to interface with their customers through various online platforms other than the traditional physical distribution channels. One fashion brand that comes to mind and seems to have taken hold in SA since the pandemic is the Chinese retailer Shein. What is the value proposition of the brand? It seems to be resonating with the SA market, particularly the youth. How worried should local retailers be about the growing presence of international players?
A: We have to acknowledge that marketing skills in SA and the rest of Africa require further development. It is also imperative that we reinforce the importance of the marketing professional in every organisation in terms of contribution to the top and bottom line. The reason top global players continue to invade Africa is that they have the money and the skills. Africa has huge potential for global players where their local markets may be saturated or their economies flat.
Q: What do you think of Elon Musk’s approach to his social media network X (formerly Twitter)? Do you think the sweeping changes will take the company to another level in terms of revenue growth or is it the beginning of the end for the platform?
A: Quite bluntly, so what? Musk is getting on with it, imposing himself because he can. He understands the maxim: ready, aim, fire! This is something anyone running a successful business should understand. Like him or not, Musk is a genius. Look what he has achieved, and he is only 52 years of age. Yes, there will be mistakes but the successes are off the scale. His (paper) loss on X as I recall is less than 2% of his total wealth, so what’s the problem? Billions of dollars to you and me but petty cash for him. X is a work in progress. But as Musk has indicated to many, including the Pentagon and even other governments, he is not running charities. I would not bet against him.
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