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Annual Research Industry Survey
Striding Onward
Written by Jane Delorie, MD, Research Solutions Ltd
According to the latest ESOMAR Global Market Research Report (2008), Africa represents only 1% of total global research spend with revenue of US$ 266m. However this is up from $222m in the previous year and has been growing steadily since the start of the new millennium. Indeed Africa represents the fastest growing region in the world with absolute year on year growth in 2008 of 25.9%. This compares with global growth for the industry of 6.5% and is ahead of all BRIC countries (Brazil 3.4%, Russia 21%, India 20% and China 15%).
So although a drop in the ocean by global standards, market research in Africa is indeed a growing industry and this is clearly evident in the 2009 MSRA survey with member revenue increasing from Kshs 1,400m for 2007 to Kshs 1,785m for 2008 revenue. This represents growth of over 27%.
Whilst MSRA members represent the majority of researchers in East Africa, an estimate for non-member revenue can be added to give an overall research spend for East Africa of around Kshs 2bn.
Kenyan based research players continue to dominate the region with only 58% of that revenue earned in Kenya. These companies have extended their reach with most having offices in Tanzania and Uganda while a few also have offices in countries further afield such as Nigeria and Mozambique. Research Solutions is a leader amongst these Kenyan based agencies reaching out to cover the continent and indeed has the largest footprint in terms of geographic coverage with work experience in 24 African countries.
African coverage is key to the growth being experienced by researchers with only 62% of research commissioned by domestic clients within the country in which it is conducted. This means that the balance is commissioned by foreign clients (38%).
In East Africa, the main method of data collection is still face to face (pen and paper) interviews (78%) unlike in South Africa where this represents only 54% of research. Telephone interviewing is popular in SA (28%) whereas this method is not used very often in East Africa (7%). Online research has become increasingly important in countries such as USA (21%), Netherlands (25%), with the highest incidence in Canada and Australia (33%). In Africa it is still relatively unused at only 1% for both East and South Africa.
Although research spend is increasing in Africa, there is still a long way to go to bring us up to speed with other markets as is demonstrated in the table below:
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Given this, research suppliers are optimistic about growth potential for their industry over the next few years and expect to see continued revenue growth of about 25% for 2009. MSRA members cite increased interest in emerging markets by international clients as the main driver of growth followed by a deeper understanding of the importance of research by local clients.
Nevertheless, the global recession has not passed East African researchers by and they have already had to absorb budget cuts imposed by clients. However the biggest challenge they struggle with, and one they have little control over, is the political and social instability of many African markets.
In the coming years, Research Solutions plans to consolidate their pan-African presence and build a strong network of researchers across the continent. The have recently secured equity funding from TBL Mirror Fund (a private equity fund based in the Netherlands) to facilitate this and they are actively working towards making their vision of being “the leading pan African information solutions provider” a reality.
On an annual basis the Marketing and Social Research Association (MSRA) persuades its members to participate in its East African research industry survey. The survey has been conducted on a regular basis for the past eight years and records actual revenue of member agencies for the previous calendar year as well as asking agency heads to forecast future growth. For the past few years, this information has been forwarded to ESOMAR (the world research body) for inclusion in their world-wide report on the Market Research Industry which is due out later in the year.
