Heineken, with a long history on the continent, acquired two factories in Ethiopia just last year. Meanwhile, newer entrants from other emerging markets such as India have significantly stepped up their presence across various African markets, with Godrej having made four acquisitions in Africa, as has Marico, over the past seven years.

Several factors contribute to the rosier picture of Africa today. The continent's GDP of $1.5 trillion is similar to that of Brazil, India or Russia, and is expected to grow faster than most non-BRIC emerging markets. While instability still plagues some nations, overall, political risk has diminished over the past 20 years.

And, even though Africa remains fragmented with over 50 countries, the emergence of trading blocs has dramatically improved the business environment. Moreover, a new consumer class is emerging so quickly that total consumer spending is expected to double by 2020. Consumer product companies not yet in Africa need to quickly reassess their strategy.

According to Euromonitor and the African Development Bank, the continent's middle class already accounts for one-third of the population. In eight years, five major countries alone will have 56 million middle-class households with disposable incomes totaling more than $680 billion. Consumption spending per capita matches India or China. Combined, these facts present a compelling picture, despite the challenges of the continent.

Growth opportunities are massive for companies that can overcome hurdles like poor infrastructure and a talent shortage. Another challenge: the opportunities are quickly attracting competitors, who are enjoying strong profitability. More than 70% of the top 50 global consumer packaged goods makers are already present.

For 20% of these companies, Africa represents over 5% of global sales - as much as 14% for Diageo and 10% for Parmalat. Meanwhile, global leaders face emerging market competitors such as Singapore's Olam and Saudi Arabia's Savola Foods and India's Marico, Godrej Consumer ProductsBSE -0.59 % and DaburBSE 2.98 %. The intensifying competition is narrowing the window of time for companies to successfully enter, expand or shape the landscape to their benefit. But before moving, it is critical to understand a few characteristics of this unique continent.

Deciding where to invest

Foremost among the considerations is where to enter and expand. In most emerging markets, you can carefully plan expansion by first establishing yourself in the biggest markets, then in primary regions or cities, and finally moving to the smaller regions or towns. But in Africa, following such a logical sequence may prove difficult.

You may start in the 10 markets that, according to Euromonitor, account for 75% of GDP (South Africa, Egypt, Nigeria, Algeria, Morocco, Angola, Libya, Sudan, Tunisia and Kenya). Depending on your category, you may also prioritize markets from the next tier. For its part, Marico first entered the hair care and styling market of Egypt, acquiring local brands Fiancee and HairCode and then moved to South Africa, with its purchase of the consumer division of Enaleni Pharmaceuticals, followed by the acquisition of Ingwe/Medi-Pac range of healthcare products from Guideline Trading.

In South Africa, Marico's operations grew 33% in the fiscal year 2010-2011 over the previous year, and continued to see double digit growth in 2011-2012 with revenues from the market crossing one billion rupees.

But what's often critical for success is the flexibility to jump on opportunities, even if they arise unexpectedly. Africa's fragmented markets, quickly changing political and regulatory environment and shortage of local incumbents with scale mean global players need to act swiftly to acquire available promising companies or seize the chances opened up by privatisation.

For example, Ethiopia was not the top priority market for Heineken. Even so, the company recently snapped up two Ethiopian breweries when they became available. The lesson: prioritize markets, screen them for rare opportunities, and be agile when they arise.

Partnering for position and profits

A second consideration is how independent you can afford to be in Africa. Few consumer goods companies have succeeded on their own. Partnerships and acquisitions are a fact of life. For instance, since 2005, Indian companies have acquired or invested in at least 79 African companies. In 2010, deals by Indian players accounted for one-third of the total value of deals in sub-Saharan Africa.

Winning companies look for specific opportunities: brands with strong competitive positions or robust equity with local consumers, companies with route-to-market capabilities, or players offering production capacity or access to supply. Godrej deftly followed the strategy of pursuing dominant brands: It acquired Rapidol, Kinky and Tura, all of which were leaders in the market.

Winners also understand that the availability of targets varies among markets and categories. The average acquisition is usually smaller in size and higher risk in Africa than elsewhere. To minimize risks, many players start by holding the majority position in joint ventures, with an out-clause in case the venture fails. As they learn more about the target, they can opt to increase control or move to a full-blown acquisition. Godrej acquired 51% of Darling Group, a leading player in hair extension products, in 2011, and plans to raise its stake to 100% over the next three to five years.

But acquisitions come with their own set of challenges. For example, given the relative lack of reliable market data as well as financial and business transparency, acquirers need to apply more practical-and basic-due diligence, including tapping local contacts and running primary consumer research.

What to sell?

A final consideration: which categories, products or brands should you sell? As in many other developing markets, instead of entering local categories to gain ground, firms can push their existing core categories and brands. To launch consumption leaders sometimes invest in consumer education.

UnileverBSE 1.60 %, for example, grew the market for its toothbrushes and toothpaste in Nigeria with its "Brush Day and Night" campaign. The company educated the public about oral hygiene with easy-to-remember visuals in the backs of vans or in rural area schools, building robust growth over the past decade.

Entering or expanding in Africa may appear daunting because of the continent's undeniable complexity. No company can depend on a simple plug-and-play strategy to enter or on a single operating model to expand. But our research shows that Africa is not significantly more challenging than many other emerging markets.

As growth slows in developed markets and categories in other emerging markets quickly consolidate, Africa may be the next best place on Earth to look for a new growth engine. And Indian companies, with their hard-won experience working in low cost, challenging and diverse home markets, are well positioned to lead the race.

Nikhil Prasad Ojha is a Bain & Company partner with the Strategy & Consumer Products practices in India. Matthew Meacham is a partner who heads the Consumer Products practice in Europe, the Middle East and Africa. Rohithari Rajan is a principal at Bain, and a member of the Consumer Products practice in India.