• Express company estimates that 60% of IT hardware growth in 2013 will come from tablets and smartphones
• “Technology companies who locate themselves in Africa will spend significantly less on logistics” – Brewer
Competition
within the technology sector is becoming more intense and Asia’s
importance as both a manufacturing location and a consumer market is
growing. However, although Asia is still key to the sector, Africa has
also witnessed an explosion in technology adoption recently and is set
to develop as a region.
This is according to Charles Brewer, Managing Director for DHL Express Sub-Saharan Africa ,
who says that a recent DHL global technology conference revealed these
trends around the changing dynamics of the technology market.
He
says that due to the increased competition within the sector, suppliers
need to adapt and improve products and services in order to retain and
grow market share. “This presents an opportunity for suppliers to be
innovative and provide consumers with the best possible products,
services and prices.
“Both
of these trends also promise to amplify the role of logistics as a
competitive differentiator in the technology industry, notably as global
companies are looking for strong and established partners to support
and simplify access to the African market.”
Brewer
says that within Africa, although there has been a significant rise in
demand for electronic consumer products, the continent is still in need
of increased investment from international technology companies, in
order to become more than just an end-user for technology products.
He
says that more than any other industry, the technology sector is driven
by constant innovation, short product cycles and new sales channels.
“From a logistics perspective this is a great challenge, but it also
provides forward-thinking brands with an opportunity.”
Brewer
says that by setting up shop in Africa, these brands are able to
service this growing market and spend significantly less on logistics
costs as they are based in much closer proximity to their customers.
According
to a recent report by Deloitte entitled The Rise and Rise of the
African Middle Class, the continent has a disproportionately young
population with 62% of the population in Africa under 25 years. “This is
positive from an outside investment perspective, as it effectively
means that there is a guaranteed customer base for years to come when
compared to a territory such as Europe, which has a shrinking
population.”
The
Deloitte report also forecasts that if the African middle class
continues on its current growth trajectory Africa’s middle class will
grow to 1.1 billion (42% of the continent’s population) by 2060.
The
trend of mobile devices preferred over PCs as the access tool for the
internet was also highlighted at the conference. Florence Noblot, DHL’s
Technology Sector Head for Europe, Middle East and Africa,
estimates that 60% of all IT hardware growth will come from tablets and
smartphones this year. “Both devices also elevate a trend towards high
innovation cycles, which demands logistics providers to improve time to
market while supporting competitive price positioning.
“This
trend is also clear in Africa, and according to the GSMA, Africa is now
the world’s second largest mobile market by connections after Asia and
the fastest growing mobile market in the world.”
He
says that an overall trend towards simplified and lighter products,
combined with price pressure, is challenging manufacturers, their
suppliers, and sometimes even their competitors to develop collaborative
solutions that improve the cost efficiency of the technology supply
chain.
“Due
to the expected economic growth, technology suppliers have the ideal
opportunity to penetrate the African market, but should have experienced
partners who are able to provide insight and have experience operating
on the continent,” concludes Noblot.
Distributed by the African Press Organization on behalf of Deutsche Post DHL
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