Raheem Akingbolu writes on how regional penetration can help brand building, citing how GAC Motor is employing the strategy to expand its global footprints
Many brands make the mistake of limiting their imagined universe of users to a narrow subset, often contained in the strict boundaries of their product sub-category. They typically overestimate their competitive positions and think they can’t possibly grow further—but they could, if they looked at penetration of the overall population instead. For many brands, this means there’s still a lot of untapped potential and headroom for growth.
However, since it is difficult for local brands to capture the whole world within a short period, one major strategy that has worked for most global brands is regional penetration. Like in war, development of regional marketing landscape helps brands to capture the world in piecemeal. Experts have consistently advised companies to always invest to re-earn penetration over and over again. Experience over the years has shown that solid brands maintain penetration in the 25%–30% range, while perennial brands like Coca- Cola can achieve 50% or more.
GAC Motor Example
GAC motor is one of the latest auto brands in the Nigerian market. In the last two years, promoters of the brand have followed its overseas strategy of “Build Brand First, Increase Sales Next” to gain more patrons in Nigeria. In order to accomplish the vision of making GAC Motor into a world-leading brand, and GAC Motor a global auto enterprise, the brand recently formulated the strategy. Guided by this strategy, it has successfully built its presence in 14 countries, spreading over the Middle East, Southeast Asia, Eastern Europe, Africa, and North and South Americas and initially put in place a global sales network and service system. Through premium quality and profound strength, GAC Motor has made major breakthroughs in the overseas market. In the Middle East markets such as Kuwait, Dubai and Bahrain, GAC Motor has successfully established foothold in the local markets through its middle and high-end products and topped the chart of sales among competing Chinese brands. It was crowned by consumers as “the best Chinese brand”.
For instance, in Kuwait, GAC Motor is said to be the best-performing Chinese brand, securing a share of 40% of all Chinese vehicles sold locally. In Bahrain, the brand has also become the best-selling Chinese brand, its sales volumes increasing three times as compared to 2015, and was warmly received by media and consumers alike.
In the future, while developing and consolidating the traditional “emerging markets”, GAC Motor will endeavor to develop the “markets of developed nations including those in Europe, the USA, Japan and Korea”.
Nigeria’s Importance to African Penetration
As the largest economy in Africa, Nigeria boasts of an expanding middle-class and bright market prospects, with a free and open business and trade environment. Nigeria is the first destination when GAC Motor ventured into the African market. At the beginning, it opened up two dealer shops. In December 2014, the company opened the first GAC Motor 4S dealer shop in Lagos Island, the commercial center of Nigeria. By successively bringing in different models such as GA3, GA3S, GS5, GS5 Super and GS4, the brand has won the hearts of local consumers. In 2016, the brand was the No.1 among all Chinese passenger vehicles exported to Nigeria.
Last year, through the joint efforts with local dealer CIG, GAC Motor successfully built the first SKD Factory in Nigeria, making it the first Chinese auto brand capable of local spare parts assembly. Recently, the SKD project passed the review of National Automotive Design and Development Council of Nigeria (NADDC), marking GAC Motor as a preferred brand in the future auto purchase by NADDC.
With guarantee of prominent quality and security, GAC Motor has been purchased in large quantities by Lagos police bureau, state government and banks, successfully establishing itself as a middle-to-high end brand.
During the recent Africa Magic Viewers’ Choice Awards (AMVCA) Film Festival, which is known as the “the Oscar of Africa”, GAC Motor not only projected its enterprising spirit to the celebrities and local communities, but also demonstrated the brand influence and the company’s determination to enter the global stage. At the end of last year, GAC Motor GS4 was premiered in the Nigerian market, elites from cultural, art, fashion and financial circles all spoke highly of GS4. In the meantime, GAC Motor rolled out a series of brand outreaching events, such as participating the largest auto shows in Nigeria-Abuja Auto Show and Lagos Auto Show. These efforts have fully showcased the global image of GAC Motor.
With the world pattern more and more featuring regional globalisation, the brand is actively planning for a global strategic layout. Current, preparation for the GAC North America R&D Center is progressing. After its establishment, the R&D Center is designed to have the functions of talent concentration and frontier technology research, among others. This will be the first step of the company’s North American market development, as well as a new milestone of the internationalization of the GAC Motor brand. At the same time, it has initially developed a comprehensive overseas team, and plan to enter into the North American market no later than 2019.
Meanwhile, the company has indicated that it will continue to focus on building its brand, and forge a trustworthy GAC Motor brand with superb quality and services beyond expectation.
According its General Manager, Mr. Yu Jun, next month, GS8, which is the flagship luxury 7-seat SUV of GAC Motor, will join the brand’s lineup in Nigeria. GS8 is an important and strategic product of GAC Motor. It boasts a tough exterior and cozy interior, with super roomy space, powerful driving force, advanced technologies and smart inter-connections. Since its launch, GS8 has been warmly received by the market and was constantly in short supply. In the future, GAC Motor, while firmly grounding itself in Nigeria, will strive to expand into West Africa and then the whole African continent, so as to provide more options and better driving experience for African consumers.
Partnership with Nigeria Governors Forum
In a bid to foster transnational investments between Nigeria and China, the first edition of the Nigeria Governors’ Investment Forum was held in Guangzhou, China, recently with the brand on hand to lend support.
GAC Motor GA8 and GS8 were designated as official vehicles of the forum, and impressed participants with the brand’s luxurious and comfortable ride experience as well as original design. At the forum, the Chinese officials and governors from Nigeria studied carefully GA8 and GS8 showcased at the venue. GS8, with its original design of a tough exterior and soft interior, luxurious and cozy inner facilities and rich high-tech equipment, was a particular eye-catcher. Nigerian delegates all expressed their hope to see the introduction of GS8 and more new-energy vehicles to Nigeria. Besides, they also advocated the possibilities of seeing more of the company’s investment in Nigeria to drive current cooperation further.
At the forum, participants from the two countries conducted in-depth discussions and case sharing on the theme of the forum “sustainable cities and livelihood”.
Speaking at the forum, the Vice Mayor of Guangzhou, Mr. CaiChaolin, stated that Nigeria as the largest economy in Africa and Guangdong are highly complementary to each other in areas such as manufacturing, agriculture, cultural exchanges and infrastructure development being situated along the “Belt and Road” and there is vast potential for cooperation between the two countries.
“The Guangzhou Municipal Government has always attached great importance to all-round cooperation with Nigeria. We believe this forum will be a great opportunity for China and Nigeria to further their long-standing friendship, and construct a new bridge for investment activities between the two nations”.
Also Speaking during the forum, President of GAC Group, Mr. Zeng Qinghong, delivered a speech titled “GAC’s global planning with sustainable development as the basis and the ‘Belt and Road’ Initiative as the driver”. Through the platform, he introduced to the participants the achievements and main business sectors of GAC Group, while emphasising the company’s sincere willingness to offer high-quality products and services to Nigerian consumers.