Ethiopia’s Opportunities: Double-digit Growth with Cultural Awareness Required

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Addis Alemayehou is CEO of 251 Communications, which stresses the importance of integrating cultural trends with contemporary branding and advertising.

Knowledge@Wharton: Tell us … about your story. You were a pioneer in leaving Ethiopia and coming back.

Addis Alemayehou: I’ve been back for about 15 years, part of the first wave of Ethiopians returning…. I left Ethiopia when I was seven or eight and grew up in Kenya. I finished high school in the U.S., emigrated to Canada. Then back to Ethiopia in 2001.

Knowledge@Wharton: Why was it important for you to come back to Ethiopia?

Alemayehou: That’s a question that always comes up. For people who move back now it’s probably very obvious why they’re back. It was a different story for me because outside Ethiopia there was always one question I got asked everywhere I went and that was, “Where are you from?” When I went back home in 2000 on vacation, that was the one question nobody ever asked me. That basically did it.

Knowledge@Wharton: Were you an entrepreneur from the start when you moved back? What were some of the business and leadership things you took on when you first came back to Ethiopia?

Alemayehou: Some people are born entrepreneurs and I think I’ve always been one. You can tell this to my father now that I’m older and wiser. My first business venture was sort of stealing my dad’s car and providing nightclub services to friends in Nairobi during the weekends. But I’ve always had ideas, where others didn’t. Africa, and obviously Ethiopia, offers a tremendous amount of opportunity. I feel like the guy who made the first chair because he got tired of sitting on the floor. There are a lot of chairs to be made on the continent.

“I feel like the guy who made the first chair because he got tired of sitting on the floor. There are a lot of chairs to be made on the continent.”

Knowledge@Wharton: That’s a really good metaphor. Tell us a little more about 251 Communications, what that does and where that started.

Alemayehou: 251 started about four years ago. Prior to that, I was an employee, a contractor supporting Ethiopian exports to the U.S. For about five years my job was to promote the best Ethiopia has to offer in clothes, textiles, shoes and flowers. We did trade shows over a couple of years. It was an ideal position for me to understand the opportunities within the private sector, the challenges within the private sector, and also build a very good network with the public sector and with the government at the highest level.

Our economy has been growing in double digits for a number of years. We had the likes of Heineken, Unilever and P&G coming into the market. That offered an opportunity for communications, because there was about to be some serious competition on the ground. That’s how we launched our firm as a 360º branding communications and PR agency in the country. We’ve now expanded that into doing consumer insight and research, and providing logistic support for clients that are coming into the country.

Knowledge@Wharton: What are some of the challenges for foreign companies coming into Ethiopia?

Alemayehou: The biggest challenge about Ethiopia is perception — perception before you even get there. So people have this preconceived idea about what they should expect when they land on the ground. The second is a lack of information with regard to the opportunities as well as the challenges. Third is the fact that it’s a very old country. We’ve been around for 3,000 years; the U.S. is like a teenager compared to us.

We’ve never been colonized. We have our own language, our own way of telling time. Our New Year is September 11; our Christmas is January 6. It’s 2007 right now. These are all different things about the country that a lot of people don’t know. Knowing that, understanding it and respecting it will get you a lot further.

There are key parts of the economy that are closed and they are not going to open anytime soon. We have a very strong government that’s more a development state model. They’re following what the Chinese, and the Koreans and Singapore did some 30-40 years back. Knowing what the government strategy is in terms of where it wants to go is key.

“Our currency is an issue at the moment in terms of getting your money out. You will get it out, but it takes time because we’re having some serious issues.”

Our currency is an issue at the moment in terms of getting your money out. You will get it out, but it takes time because we’re having some serious issues. But the companies that know that and understand it are putting money into the country. I always say if the big boys are putting in that kind of money, it should be okay because they’ve done their homework.

Knowledge@Wharton: What are some of the top-level pieces of advice that you give brands coming in?

Alemayehou: It’s interesting because you have a lot of brands, especially multinational brands from Europe or the U.S. or anywhere else wanting to use a cut-and-paste model. Africa is 52-53 countries? You don’t want to split up your marketing budget into 53 different markets. So they tend to generalize it and use the same branding or the same strategy.

We’ve been fighting for the past three years to differentiate Ethiopia from that. A lot more brands understand that. I think Coca-Cola is one of the first multinational brands to say this place is really different. They look different. They talk different. They’re in different time zones. So we’ll put the extra resources to talk to them in a language that they understand. I think some of the others are also following suit.

That’s our advice. Every market says we’re different. But we’re truly different.

Knowledge@Wharton: Can you give an example of how you’d brand something differently for Ethiopia compared to another African country, just to support what you’re saying about the uniqueness of Ethiopia?

Alemayehou: One is features. In terms of the features of Ethiopians, they are very distinct and unique. Second is our script. We don’t speak English. We don’t write English. We have our own script. It’s called Amharic, and that’s the national language. So, if you want to talk to 95 million people, you need to speak to them in a language they understand. It’s a very exciting market. We have 44 million people under the age of 15. The average age is 17. Out of 95 million people 75% are under the age of 30….

Knowledge@Wharton: What about the homegrown entrepreneurs, the domestic companies? You seem to be uniquely positioned to grow things internally. What’s the pulse of entrepreneurship in Ethiopia?

“Kenya’s business environment is much further [advanced] than ours, but not too [far] ahead that we can’t reach out and grab something that works for us.”

Alemayehou: You know, there’s a saying in my dad’s generation: being a son of a businessperson is not something to be proud of. People wanted you to become an engineer, or a doctor or a lawyer. Now things have changed because we’ve come from 17 years of communism. Between 1974 and 1991, it was almost illegal to own a business in Ethiopia. And we have a very young, robust, unique and very aggressive private sector on the ground that knows and understands that it’s only time before the floodgates open. It’s sort of like let me grab a slice of the pie before everybody else comes in. It’s a very exciting time to be an Ethiopian and to watch it.

Knowledge@Wharton: I also know that you started the first English language radio station in Ethiopia. How did that happen? Tell us a little bit more about it.

Alemayehou: It was very simple. It’s the same scenario as the guy who made the first chair getting sick of sitting on the floor. When I moved back to Ethiopia, I had the first generation iPod. I planted it in my dad’s car and I’d drive around. I had no clue as to what the entertainment industry or what the media industry in Ethiopia was. I was happy in my own little world until I lost that iPod and ended up not having anything to listen to. So I spoke to friends and looked around the market and I realized that, if I needed it, there’s a lot more people who would need it as well.

It took a while, but we went out and launched the first station. I have a very simple model in the sense that I grew up in Kenya. Kenya’s business environment is much further than ours, but not too ahead that we can’t reach out and grab something that works for us. So I went to Kenya and spent some time with the top station and poached someone and I launched the station. That’s basically it.

Whatever you’re doing, a lot of us used to think our countries were booming until we started listening about some of the other countries. So the whole continent is in the fast lane for development. It’s an amazing time.

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