The boy came up with this in school.
“Language barriers, cultural differences, corruption, very poor Internet – it is sometimes difficult for us to maintain contact with partners. And this is only a small part of the problems, “- says Sports.ru Luke Westcott.
In 2014, Luke invested seven thousand dollars in his own brand of sportswear AMS (African Manufacturing Solutions) and entered the market of South Sudan, the youngest country in the world that has not cooled down after the civil war, and very unsecured – according to the UN, 40% of the population (4.9 million people) suffer from malnutrition there. At the same time, according to Nielsen Company (a very reputable measuring company providing data and marketing information), Africa is the most involved football market in the world, but large sports brands ignore this. Incredible 76% of the population of sub-Saharan Africa are obsessed with football. In Europe, this indicator is at 57%, in South America – 69%, in the Middle East – 67%.
Why do not top brands make money on such a promising market?
Nike, adidas and Puma cooperate only with prominent African teams such as Egypt, Nigeria, Ghana and Morocco.
“A major brand assesses the competitiveness of the national team – will the team qualify for major tournaments? how good are her players? – and then offers sponsorship, which includes free form kits and an additional cash payment. They may not profit from sales, but will benefit from marketing and brand promotion, “Luke explains.
For example, in the Gabon national team (92nd in the FIFA rankings, it will not be at the World Championships) Puma is invested – because of Obama Obama. The rest of Africa in sub-Saharan Africa is unstable markets with political and economic uncertainties.
“Adidas, Nike and Puma represent a number of African teams, but they can not get into domestic markets simply because their products are inaccessible to most buyers,” says a recent study by Luke.
In Africa, there is a lot of fake – this is due to the lack of price flexibility by brands, they do not want to adapt to specific countries. For example, on adidas website all jerseys are sold at one price: the original is $ 130, the replica is $ 90. Brands do not take into account the welfare of a particular country: for example, the jersey of the German national team (with an average salary of 3703 euros) will cost the German the same amount as an Egyptian fan (with an average salary of not more than 300 euros a month) the Egyptian national team shirt.
For this reason, domestic markets are flooded with counterfeit products. In early April, the Moroccan newspaper Al Maasae reported that the local federation and adidas representatives postponed the release of the form of the Moroccan team to the World Cup because of the country’s guaranteed flooding with fakes. And so you can at least mitigate the blow.
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It is necessary to understand that the black market of counterfeit jerseys is a problem, the volume of which grows annually, and which can not be destroyed even in Europe. This is partly due to the fact that the volume of transactions on the Internet is growing. A trader in the market can be arrested and the products confiscated, but what to do with a bunch of anonymous sellers who sell fakes through Amazon, eBay, Alibaba and even instant messengers.
And how does an Australian want to earn money? Is he smarter than the top brands?
“The only way to compete with fake is to just sell your shirts at the same price as the fake. Simply put, why would a customer buy a fake if they can buy a real AMS jersey at the same price? In Southern Sudan, we won the competition from fake jerseys, using this model, “- replies Luke.
He wrote the business plan at age 18 (in 2013), in the last grade of the school, then entered the business course of the top technology university of Australia (RMIT University) and got down to business.
The essence of the plan is simple – to break into the destroyed internal markets and make money for them. AMS provides prefabricated forms free of charge, but at the heart of the business is the orientation towards people – jerseys should be sold at an affordable price. The average price on the AMS website is $ 45. The Sierra Leone national team, which is 102nd in the FIFA rankings, is the top brand partner. Jersey of all countries and clubs with which AMS is cooperating (now such teams are 27), can be purchased on the site with delivery anywhere in the world.
In 2014, Westcott identified three teams with the largest sales potential (South Sudan, Somalia and Eritrea). Then he made the concept of form and made contact: with the president of the Football Federation of Southern Sudan, for example, he contacted Facebook and agreed to send the first batch. Players and representatives of the Federation liked the form, and they signed a contract.
“The money earned on eBay and the savings after work in the sports goods store went to those parties. The first teams we sent the form to were Eritrea and South Sudan, and we spent about 7,000 dollars – everything that we earn has since been reinvested into business expansion. Now, in fact, I’m not very interested in profit, because we are still testing the business model in the domestic markets of Africa, but I definitely see great opportunities here, “Luke said.
Now AMS produces 800 to 2000 sets a month (AMS jersey costs on average $ 45, and the actual price of a replica of adidas is $ 90) – Westcott is satisfied and confident that in a few years he will transfer production to Africa. “This requires a lot of money: 200-300 thousand dollars – to launch a small production, about 800 thousand – for a large plant. But low labor costs and reduced transportation costs will lead to a higher level of operational efficiency in the long term. ” Now AMS is working with China, but small batches have already been produced experimentally in African factories.
The Australian earned a respect from FIFA president Gianni Infantino: they met in South Sudan, and since then Luke has been in contact with his people, and the AMS shirt is in the collection even from Rahim Sterling.
Now AMS penetrates deeply into the market – in addition to the main team, they dress youth teams and about half of the teams (soon to wear all the teams) of the main league of Southern Sudan, in the capital Juba are official shops (with their help, Luk earns in the domestic market, but incomes does not disclose), they supply uniforms for the state broadcaster-corporation and cooperate with local sponsors: for example, the MateApp messenger launched by the former player of the Southern Sudan team. Westcott says that after looking for a place to shop and the entire bureaucracy, he just kicks off the low cost of rent – only $ 200 a month.
Employees of the South Sudanese TV company also wear AMS:
“I very much hope that in the future we will become the top brand of sportswear on the African continent and will eventually work with the main teams of Africa. I think we probed the business model, which allows us to avoid competition with big brands like Nike, adidas and Puma. From a social point of view it would be great if our work on the continent could inspire these rich companies to step up and support football in less developed countries.
And to move to Africa is my dream. I have not decided yet where, but I’m thinking of an office in Kampala (Uganda) and a holiday home in Zanzibar to go there on weekends – it would be an ideal life, “- Luke believes very much in Africa and in her future industrial dominance .
So thinks not only Westcott. An important business magazine Harvard Business Review suggests that industrialization will allow Africa to follow the footsteps of Japan, South Korea, Taiwan and China: build factories, and employ a growing population there (HBR analysts predict population growth to 2 billion by 2050); foreign investment will allow reforming African institutions, foreigners will bring innovation and allow Africa to synchronize with the rest of the world.
Salaries and labor in China and other Asian countries are growing every year and former World Bank chief economist Lin Bae believes that this will increase production more than fourfold in low-income countries – an excellent chance for African countries.
The McKinsey Global Institute estimates that the number of African households with income that allows spending money not only for food, should grow by 50% by 2020 and reach 128 million people. Africa is extremely heterogeneous, and experts emphasize that it should be regarded as 53 separate countries. In this context, the case of Unilever (one of the world leaders in the market of food and household products) is very appropriate, which has succeeded by producing goods adapted to the requirements of African consumers: affordable food, powder for washing clothes in a small amount of water and personal care products corresponding to local tastes. The most sold line of shampoos and conditioners Motions was developed specifically for customers with hard hair and dark skin.
And what about his design?
Luke himself collected jersey, and then also sold them on eBay, so he knows well what the collectors are dragging and what shirts are buying more: “Everybody is attracted by catchy and non-standard design, and not templates that use the main sports brands.” AMS – a small brand, so Luke independently develops a design for most projects.
“We recently developed our favorite design for Darfur United – the team is not part of FIFA, it is represented by the people of Darfur who live in a refugee camp in Chad. The idea arose when I was riding around South Sudan and saw a man in a beautiful shirt. I asked him where he took this – it turned out, this from his hometown in Darfur. I sfotkal drawing on the shirt, and then imprinted the same pattern on the jersey of Darfur. At work, I then spent two full days – I think it was worth it. “
In 2015, Luke became interested in the Nigerian national team. Then he just experimented: he connected several ideas and filled the sketches on the Internet without any specific goal. The design has received wide publicity, and representatives of the Football Federation of Nigeria asked AMS to prepare a sponsorship proposal. “Of course, Nike immediately entered the race, which we did not win. But it was great – we attracted their attention and created a design for the team, a big fan of which I am. “
“By the way, the new form of Nigeria is simply incredible – my favorite design for the World Cup among all teams for a long time. Interestingly, Matthew Wolff, who developed our design proposals for Nigeria in 2015 and made some smart projects for other teams, now works for Nike and was on the design team for the Nigerian team for the 2018 World Cup. I like to think that the design stylistics of African jersey from AMS may have made a small contribution to the new form for Nigeria. “