For a long time now, Southern Africa has reported the highest HIV prevalence in the world. In 2009, ten countries in sub-Saharan Africa had 11.3 million people living with HIV/AIDS (PLWHA), accounting for 34% of all PLWHA worldwide. Notable is the fact that South Africa, Lesotho, Botswana, and Swaziland are the world’s highest-prevalence countries with South Africa alone, accounting for 5.6 million of all PLWHA worldwide. According to the Joint United Nations Program on HIV and Aids (UNAIDS) 2010 Global Report, “the vast majority of people in sub-Saharan Africa continue to be infected with HIV through unprotected heterosexual intercourse and onward transmission to infants.”
In existence, as early as 1999, PSI’s condom social marketing programming in Southern Africa has been hugely successful in fighting the spread of HIV/AIDS across the region, by effectively providing accessible solutions to condoms.
Through the end of 2015, the Embassy of the Kingdom of the Netherlands (EKN) and the Swedish International Development Agency (Sida) have supported this program via PSI’s local affiliate Society for Family Health (SFH) in South Africa. Simultaneously country based condom social marketing programs were being managed by PSI in Lesotho, Swaziland and Botswana.
The success delivered by SFH in South Africa prompted discussion between PSI and both funders around the potential for the program to become self-funding. The result of this discussion was agreement that funding would end at the end of 2015. Subsequently, PSI/South Africa would be established to facilitate the transition of the legacy condom social marketing programs in the region to a financially sustainable business, serving the market and operating at regional scale.
In 2013 PSI/South Africa was registered as a foreign branch of PSI and took over the management of the legacy condom social marketing program from SFH. With no restrictions on its commercial activities and under the supervision of a commercially experienced head, commercial best practice was applied to establishing efficient business structures, systems and processes akin to those found in the fast-moving consumer goods (FMCG) trade sector in South Africa. Fast forward four short years and PSI/South Africa is a fully functioning, profitable commercial business operating in six countries (South Africa, Lesotho, Swaziland, Botswana, Namibia, and Zambia) with the two market leading condom brands Trust and Lovers+.
Regional sales of socially marketed male condoms in 2015 averted 1,604,620 DALYs in Botswana, Lesotho, South Africa, and Swaziland through the prevention of HIV infection and unintended pregnancy.
They also provided 597,660 couple-years of protection against unintended pregnancy.
PSI/South Africa dominates the commercial condom markets in which it operates. In line with PSI’s global vision, PSI/South Africa focuses its effort on ensuring that low and middle income consumers that are willing to pay for intervention, have easy access to the highest quality condoms available. With its market leading brands Trust and Lovers+, PSI/South Africa commands in excess of 72% of commercial market volumes and just shy of 50% of total market value. In simple terms four out of of every five condoms sold commercially are PSI brands.
The success achieved by PSI/South Africa over the past five years is attributed to:
A strong focus on the introduction of commercial capability and efficiency. Key focus areas include:
- The evolution to an efficient business structure including the recruitment and development of commercial capability in the key functions of finance, supply chain, sales and marketing;
- The introduction and development of time and cost efficient business systems and processes based on best practice in the FMCG industry (e.g., sales forecasting, materials requirement planning, financial budgeting and monitoring);
- The implementation and monitoring of commercial key performance indicators including top line sales, cost of goods sold (COGs), operating expenses and profitability.
The development of strong consumer insight based brand strategies for the Trust and Lovers+ brands. Key focus areas included:
- The review and refinement of each brands positioning within the market including target audience, unique selling proposition and reasons to believe;
- The improvement of availability (numeric distribution) and visibility at point of purchase – with the intention of ensuring consumers can navigate the condom category easily;
- The implementation of strong 360-degree consumer campaigns.
In commercial terms PSI/South Africa lost money on every condom sold prior to 2012. By the end of 2013, PSI/South Africa’s brands had ‘turned the corner’ with both Trust and Lovers+, returning positive profits for the 2013 financial year. Profit delivery continues to improve each year and PSI/South Africa is now a fully commercial operation. With no reliance on external funders or PSI, sales revenues significantly exceed operating expenses and the business delivers a strong bottom line.
PSI/South Africa’s intent remains to dominate the commercial condom category in those markets in which it currently operates. It will however look to geographic expansion – further north into Africa and portfolio diversification – through the introduction of additional healthcare categories, to steadily grow its revenues and profit.
Looking to the future, PSI/South Africa’s vision is to help people lead healthier, more productive and meaningful lives. We will achieve this through the delivery of sustainable growth, by entrenching PSI/South Africa as a supplier of a diversified range of market leading brands and servicing consumer needs throughout Africa.
- Ministry of Foreign Affairs of the Netherlands
- Embassy of Sweden – Lusaka
- Norwegian Agency for Development Cooperation