Asia > Eastern Asia > China > Africa the ‘new China’ when it comes to appetite for retail

China: Africa the ‘new China’ when it comes to appetite for retail

2015/10/31

The African continent is experiencing rapid retail expansion, and is being compared to China in 1987 at the same time as it was predicated to be the next large thing.

A.T. Kearney’s 2015 World Retail Development Index has listed Sub-Saharan Africa as the ‘large story’ for 2040, similar to that of China 30 years ago, where today, retailers are expanding four to five times faster than retailers in the United States and Europe.

Recognizing this potential, DHL (dpdhl.com) is playing a key role in growing retail on the continent via its current footprint of 5 800 retail outlets across Sub Saharan Africa (SSA), not by building its own bricks and mortar branches but by partnering with local business owners who act as DHL resellers. Steve Burd, Acting Vice President of Sales for DHL SSA, says, “Thousands of vendors – such as electronics stores, travel agents and stationery stores – presently offer DHL Express services, alongside their existing product offerings.

These small businesses benefit from commission on all DHL sales, an increase in foot traffic inclunding being associated with a world brand. We believe that the rising middle class, coupled with market and infrastructure development will continue to drive request in the retail space in the years approaching.”

He points to the 2015 A.T. Kearney 2015 World Retail Development Index™ which listed three Sub-Saharan Africa nations – Botswana, Nigeria and Angola – in the top 30 developing nations for retail investment globally. “Zambia, Namibia and Ghana were outlined as fast emerging and likely to be included on the inventory in the coming years.”

We believe that the rising middle class, coupled with market and infrastructure development will continue to drive request in the retail space in the years to come

At the same time as looking at the local 2015 African Retail Development Index™, Burd says that it is refreshing to see that smaller markets are emerging and rivaling Nigeria and South Africa, historically considered the continent’s powerhouses. Gabon, Botswana and Angola were listed as the top three nations respectively in the African index, followed by Nigeria, Tanzania and South Africa(2).

“Developing nations, inclunding early stage markets with little to no formal shopping culture, are increasingly becoming viable markets for retailers. However, while there are increasingly additional opportunities, businesses and investors need to look at each market individually before expanding, as there is no one size fits all strategy for the African market,” says Burd.

“According to market intelligence agency WARC, West Africans have an outlook closely aligned to the US, whereas East Africans tend to find Asian brands additional appealing. Considerate the differing cultures and brand preferences is therefore significant at the same time as considering a retail expansion strategy,” adds Burd.

Burd says that small and medium enterprises (SMEs) are well positioned to capitalise on the expanding retail sector given their agility and ability to adapt to changing market conditions. He cautions that while opportunities are on the rise, challenges remain ranging from varying customs regulations to supply chain management. “Supply chains in Africa are additional challenging than a lot of other markets in the world, and the key to success is considerate these in order to offset the risks versus the opportunity which the continent offers.”

“We work with thousands and thousands of SMEs across Africa and are committed to supporting them to seize opportunities and advance Sub-Saharan Africa to a thriving economy,” says Burd.

Related Articles
  • United States sees China investment talks ‘productive’ after new offers

    2016/06/20 Bilateral investment talks between the United States and China “continue to be productive,” the US Trade Representative’s office said on Friday next the two sides exchanged new offers this week. A USTR spokeswoman said US and Chinese negotiators exchanged revised “negative lists” of sectors that would remain off-limits from foreign investment as they try to reach a transaction for a bilateral investment treaty.
  • Djibouti partners with China to develop local infrastructure and global trade routes

    2016/06/18 Djibouti has recently inked an agreement with China to streamline the East African country’s Customs systems, in a bid to consolidate its position as a logistics and trade centre for the region. The agreement comes as Djibouti channels some $14bn worth of investment – inclunding over $1bn worth of concessional financing from Chinese banks ­– for a spate of major infrastructure projects, ranging from free trade zones to a new railway and port facilities. The new Silk Road
  • Asia Property Bond Market Enjoys Strong Momentum from Stock Market Volatility

    2016/06/12 Chinese Developers Delay Bond Maturity, Deficit to Peak in 2020
  • Forty-six Chinese-owned companies registered in Guinea-Bissau

    2016/06/11 The Company Formalisation Centre (CFE) of Guinea-Bissau from May 2011 to May 2016, registered 46 companies whose owners are from China or Guineans associated with citizens from that country. Statistical data from the CFE to which Macauhub had access Thursday showed that the 46 companies are linked to agriculture, fisheries, catering, clothing sales, cosmetics and computer products, part others.
  • Chinese Group negotiates to buy bank in Brazil

    2016/06/11 The Shanghai Pengxin Group Co is negotiating the buy a controlling stake in Brazilian bank Indusval & Partners (BI&P) in order to expand beyond the raw materials market in the major economy in Latin America, reported China Daily The newspaper said that representatives of both parties had by presently met, although it is possible that no agreement will be reached at the end of the meetings.