China’s dominance of Africa’s consumer electronics industry is set to be challenged by the entry of some of the world’s biggest brands onto the continent.
This is according to Scott Allison, head of DHL’s technology business unit. Allison recently met with representatives of 34 of the world’s leading technology companies and says Africa’s time has come.
“The high risk nature of doing business in Africa meant that previously a large number of the traditional market leaders limited their involvement to North and South Africa, opting to partner with distributors in the rest of Africa. This left the market wide open to the more risk-averse Chinese manufacturers.” He says China’s first mover advantage has resulted in exports of technology-based goods to Africa reaching R80 billion in 2012.
“Africa’s 1 billion plus consumers who collectively spend R4 trillion per year have a voracious appetite for electronics,” he says. “This combination of factors is appealing to the technology sector.”
While the potential for manufacturing in Africa is being championed by some, many feel that they will import and distribute goods that have been manufactured abroad for the foreseeable future. However even this comes with significant risk. “The group identified risks associated with the transportation and storing of high-value consumer goods, restrictions to the free movement of goods (customs) and the uncertain legislative environments as their key concerns.”
The sector has collectively agreed that the most desirable distribution hubs would include Nigeria (serving Nigeria only), Ghana (covering the rest of West Africa), Niarobi Kenya (serving East Africa), South Africa (distributing throughout Southern Africa) and Egypt.
DHL boasts 30 years on the ground experience in Africa and serves over 50 countries on the continent.
Staff Writer
