Guinea Conakry has seen better days. Political instability and an uncertain economic outlook have not helped consumer confidence in this West African country. I have spent the last two weeks assessing a FMCG company’s distribution capability. The data tell an interesting story.
Wholesalers – like most of markets in Africa, FMCG companies rely heavily on wholesalers for distribution capability. The market is extremely fragmented with no clear dominant player. Key accounts and organized distribution is limited. Warehouse space is limited with no clear layout principles.
Outlet base – with the current political instability, the outlet base has been on the decline. Once thriving wet markets have seen a visible decrease in traffic and sales. Informal outlets are closing down as merchants are returning to the country side. The economic upside of living in the city does not hold the same allure anymore.
Transportation – delivery in the city revolves around low cost distribution such as pushcarts with a few Chinese tricycles roaming the street. Tricycles also are being used for ice distribution (e.g. fish and beverages) and some tricycles even act as ambulances.
Pushcart operators – most wholesalers have limited interaction with their customer base and rely exclusively on independent pushcart operators to distribute their products. Pushcart operators visit the same outlets every day and are not necessary in close proximity to the wholesaler. None of the wholesalers I visited have any outlet information. As one wholesaler put it, “You better have a good relationship with your pushcart operators, because if they go, so does your outlet base.”
SKU complexity – All sales are conventional selling, with pushcart operators only carrying the SKUs that they think will sell. Carrying low yielding SKUs simply takes “too much energy” and launching a new brand can be a challenging undertaking. A few companies are starting to explore pre-selling.
Cash collection – pushcart operators handle all transactions and normally have to provide some security prior to doing business with the wholesalers. Family members and friends often assist in this regard. Cash is normally collected at the end of the day and is, in effect, one day credit.
Electricity – Conakry is suffering from chronic power outages that make refrigeration limited and the cold chain challenging at best. In the words of one FMCG supervisor “When the power goes on at home, I iron all my shirts at once. Delaying my ironing duties can be a fatal mistake.”
However through all the difficulty, companies are launching new brands and an increasing number of suppliers are looking for ways to improve distribution. Guineans have a fighting spirit with hospitality unmatched by many in the region.