Despite the innovation and growth of business development in Africa, a gap remains for foreign goods and services, technology, infrastructure and investment. This makes business in Africa lucrative, provided an Afrocentric business development plan is in place.
The cost of goods is often an important factor of commercial success in Africa. Multi-national and international business with manufacturing in Asia have the benefit of low manufacturing cost. Import costs into Africa are also comparatively low, meaning that foreign goods can enter African markets at highly competitive prices. As the average standard of living is low, consumer-facing companies with competitively priced goods do well in Africa.
Partnership in Africa
Building partnerships with locals is often vital to successful business in Africa. Qualified and ambitious candidates are readily available to play active roles in new ventures, particularly when such ventures are regarded as beneficial to the community or as having the potential to present economic opportunities for communities. Local partnerships provide solid foundations for sustainable enterprise in Africa.
The pivot in commerce from retailing to online marketplaces, and direct-to-consumer offerings, also occurred in the urban areas of Africa during the Covid-19 pandemic. This is beneficial for companies seeking market entry, as distribution can be limited to direct-to-consumer channels. The exponential growth in the telecommunications industry also means that urban populations have access to the internet, allowing business to rely on e-commerce in Africa and reducing the customer acquisition cost through traditional advertising means.
Africans are open to foreign investment and welcome opportunities for economic growth. Intellectual property (IP) is another strong foundation on which to operate a business in Africa, keeping competitors at bay and securing a market. Early IP protection in Africa is an important step when commencing commercial relations here. Smit & Van Wyk can assist with securing intellectual property rights in Africa.