China’s population exceeds 1.4 billion, representing hundreds of millions of consumers who have seen their buying power increase as the world’s second largest economy continues its unique growth story. As the Chinese consumer’s buying power increases, so does the worlds desire to tap into that revenue potential. Accessing and successfully navigating this unique market, however, requires a refined and sophisticated approach, central to which should be a sound route-to-market strategy. African exporters’ success in China has grown gradually as they have been able to leverage the increased Chinese presence on the African continent. But there remains plenty room for improvement, and significant scope for African exporters to truly capitalize on the opportunity China represents. What can African exporters further leverage to execute route-to-market successfully?
China has been Africa’s largest trading partner for over a decade, with numerous African countries vying to continue this trend by formulating strategic trade agreements and relationships with Chinese corporations and public sector players. At the turn of the century China realized the potential that positive relationships with the African continent held, and launched the Forum on China-Africa Cooperation. Encompassing economic, cultural, political and security exchanges, one of the many benefits of this forum has been expanded opportunities for mutual market access. China has hosted domestic events such as the China-Africa Economic and Trade expo, providing a platform for African companies to showcase their products to Chinese consumers, as well as providing African companies easier access to the annually held China International Import Expo by either providing free stands at the event for many African exporters.
This means that an enabling environment exists for continued growth in bi-directional trade. In order for Africa to benefit from this, prudent strategizing around China-specific route-to-market is necessary. Companies would need to give substantial attention to how they aim to enter the market, and follow best practice as exemplified by those who have already succeeded. China, whilst being an attractive market to enter, offers many complexities, including vastly differing and rapidly changing consumer profiles, logistical challenges given the size of the country, the extensive scale of the market, rapidly shifting retail patterns as e-commerce becomes the norm and cultural differences. Understanding how to design product offerings that appeal to Chinese consumers, the competitiveness of Chinese manufacturers and the regulations involved with entering the market may be complicated, but rewarding when executed well. African exporters must be willing to leverage relationships, bilateral and multilateral mechanisms and conduct thorough research and analytics on the Chinese market and let this serve as the basis for the synthesis of a sound market entry strategy.
Despite being beset with the novel coronavirus in Q1, China will continue to be one of the largest global consumer markets. African exporters across the continent must position themselves to expand beyond just their domestic markets. A successful market expansion plan which includes China, if effectively implemented, will yield great results for Africa’s young but fast developing economy.
This article is published in The Econometer section of ChinAfrica magazine (March 2020), an English and French language monthly publication that provides news, views and analysis on all things China, Africa and China-Africa relations.