Read these Codes, come to terms with 2019-SBI
Science has proven that no one can predict the future accurately, at SBI Media, we still try to make sense of tomorrow because our success and that of our clients have benefited from this mindset. However, to understand 2019, we will need to read codes. You don’t need coding lessons to get a grasp of it. You can simply pay attention to the little things you pay the least attention to. They would define the fate of businesses across sectors. In a world of uncertainties meshed in a volatile geopolitical variable, everything counts. Before you read the codes, here are some major highlights of last year:
Since 2016, after the CBN took over the operations of Skye Bank, analysts in the financial services sector were skeptical about its going concern because the solution had little or no impact. With NPLs nearing 50%, its acquisition of Mainstreet Bank with a N30 billion commercial paper worsened its capital position below regulatory requirements. At last, Skye fell and we are left with a new bank called Polaris, in 2019, it will be interesting to know what financial galaxy Polaris would its customers. MEDIA FACT: Skye Bank contributed less than 1% of total banking media spend in 2018.
If you had disagreed that Tecno will rival and even unseat Samsung as the market leader in Nigeria and African mobile market, you would be pardoned for the miss. Well, Under the umbrella of Transsion Holdings, Tecno alongside its sister brands – Infinix and itel are now the largest market shareholders with about 50% of the entire African smartphone market. How was this possible? If you want to be simplistic, you would conclude it is about winning the price war. However, Transsion cracked the code about Africans and smartphone usage. Tecno phones have been engineered to take better pictures of dark skin people, the brand pioneered dual SIM tech, its battery life is perhaps the best in the market. These are some of the reasons major cities in Africa are adorned with its bright blue shopfronts carrying its iconic logo.
Interesting Fact: Tecno’s first slogan was ‘think global, act local’.
Diamonds are not Forever?
We will not forget that another major lender has been carpeted into the books of history. Akin to the scenario that played out in the case of Skye Bank, Diamond was threading on the threshold of collapse and an epileptic survival. Several futile moves were made to save the bank. From selling foreign units to license downgrade from international to a national bank. On the flipside, the eventual merger between Diamond and Access Bank presupposed it could be a ‘happily ever after’ for a Diamond that shone but did not last forever. MEDIA FACT: The merger between Access and Diamond would see the entity become the largest advertiser in the banking sector.
As we were rounding-off the year thinking it would be all gloom and doom for the aviation industry, Boeing announced that Green Africa Airways, a Nigerian airline startup has made commitment to purchase about 100 units of Boeing 737 MAX aircraft. The deal is the largest aircraft deal ever for the African continent. Boeing disclosed that the total deal carries a list price of $11.7 billion and that the African aircraft demand would double in the next 20 years. While there are inherent challenges hampering growth and profitability in the market, this development would further attract more investors into the sector given the potentials of the market. MEDIA FACT: The Nigerian domestic aviation category contributes less than 1% of the total industry adspend.
Here are the codes you need to unlock this year
This is the year of AI. In case you did not pay attention to this code, AI isn’t just a computer software that is smart and intuitive, it is an autonomous, self-willed and independent computer program that will change the way we live and connect. Don’t be caught unawares, AI is more important to your business this year than anything else. Forrester Research said AI investment will reach $1.2 trillion by 2020 but it has already contributed an average of $9 trillion to the revenue of companies adopting it. As a practical example, our client Tecno has just launched Camon 11. The phone’s selfie camera is powered by an AI algorithm to take better pictures in whatever light condition. From aviation, financial services, telecoms, media and entertainment, AI is the #1 code of the year.
2019 General Election
It has been dubbed an election of two worlds. Some economists said that the election at the federal level is a choice between a reform socialist government and a pro-business and capitalist candidate. We can’t predict the eventual outcome but we see the media industry getting more revenue but far less than half of the media spend for the 2015 election. Various investors from the portfolio, capital and local would weigh their exposure to the economy. The outcome is expected to determine the trajectory of the Nigerian socio-economic landscape for the next four years and beyond.
Deal or No Deal Brexit
Did the UK bit more than it could chew? Will its economy survive if a deal is passed? Will there be another referendum? Why should you care? We think you should be concerned about the outcome of the Brexit imbroglio. For EMs such as Nigeria, you should not fret but keep on eye major facts of the deal. On one side, the UK is a major source of investment and funding into Nigeria. A negative outcome for the UK could throw a spanner in the works for companies exposed to the UK. A possible competition between the EU and the UK could benefit EMs but a ‘no deal Brexit’ could mean more uncertainties for the exposed.
Crude Oil Market Volatility
If there is anything businesses in Nigeria should watch, it is the price of crude oil in the international market. Often dictated by geopolitical postures, recent development has shown us that countries such as Nigeria must tame its dependent on this volatile commodity. A fall in the price beyond our budget estimate of $51 could see a negative growth that could trigger another recession, rev-up inflation thereby making life harder for an already stressed population. Some other experts see an upward swing which could bolster more public spending, ginger a return of capital importation from direct and portfolio investors. For us in the media, a further dip in the price of crude oil would impact marketing budget but an upswing would trigger more campaign activities.
Will Bitcoin be Useless?
Bitcoin is still on a downward spiral. From an all-time high of N6 million per BTC, the much-touted cryptocurrency has crashed by more than 75% this year alone. Should you care, worry or be concerned? Yes and No. But we think it doesn’t matter where you stand. Whether you an enthusiast, leaner or its hater, the year 2019 would see many companies take up interest in blockchain technology, the software powering the digital currency. Diar, a blockchain research group said investment in the industry surged by 280% in 2018. When combined with AI applications, several industries from aviation, financial services and consumer goods would need to change the way they design products, promote and meet their customer’s needs.
Since he came into office in 2017, President Donald Trump has become perhaps the most important risk factor across various markets. Last year, he has upped the ante to cause more volatility across various industries. Going by his various belligerent tactics to ‘Make America Great Again’ by using trade and diplomatic leverage to cow or silence his targets, you will need to have Trump up on your watch list. His hold on Saudi Arabia following the fall out of the death of Jamal Khashoggi crashed oil prices beyond expectation. EM economies such as Nigeria with crude oil as the key pointer to our fiscal policy, understanding his Donald Trump’s thought pattern might be a starting point.
Last year, major developed economies have touted their plans for a 5G network. Well in 2019, the 5G network will not yet be in any market until 2020 but a lot of investment will be thrown at building the network across major economies. So why does 5G matter? In simple terms, it will change everything we know about the Internet and how we use it to make our lives more meaningful. Its benefits are ‘ginormous’. With an unprecedented bandwidth, videos streaming will be as easy as a touch of a button, it will also make networks more agile and economical, it offers better security to power critical applications online and one of its most important benefits is its low latency feature that reduces the speed at which data moves within a network making connectivity among machines, driverless cars, trains and devices seamless. INTERESTING FACT: The speed of a 5G network is 400 times faster than a blink of the eye (0.001 millisecond)
Source: Sbi Media