Time to Seize the Opportunity in Africa

Time to Seize the Opportunity in Africa

Time to Seize the Opportunity in AfricaTime to Seize the Opportunity in Africa

This crazy global pandemic has simply brought forward an industry-wide consolidation much sooner than it might otherwise have occurred.

As each day goes by it is fascinating to see how our imaging industry is changing so dramatically and, depending on where you sit, the outlook is either very bleak or very promising.

For so many companies, there has been an unfortunate decline in business, with customers either reducing the number of pages printed or worst still, closing shop.

For the domestic markets (notably Europe and the U.S.), where choice and competition are well established, you can argue the decline has been far worse than in the ‘developing’ markets.

Since the aftermarket share is so high and opportunities for growth or even new customers are fought over by so many well-established companies (and brands), the price pressure is considerable. In fact, when you look at some of the ridiculous prices being offered, you have to ask yourself if the businesses are sustainable and obviously, this price pressure is pushed all the way up the supply chain.

Suddenly, with such a decrease in demand manufacturers of components and finished products alike are rightfully concerned about the future of their businesses and what direction to take.

For many of the largest manufacturers of finished products, especially those only manufacturing for third parties under a private label, they are completely at the mercy of their customers. Often these customers only see the factory as a source and not as a partner.

As such, as the price pressure increases customers simply put pressure back on the factory to drop prices with the threat (veiled or otherwise) of moving their volumes elsewhere. Unfortunately, many factories have been dropping prices often without the customer even asking… !

This is simply madness and completely unsustainable. Whatever happened to being proud of your offerings and selling the added value?

This crazy global pandemic has simply brought forward an industry-wide consolidation much sooner than it might otherwise have occurred.

But what of the so-called “developing markets?” I always feel this title is often given by mature markets to those territories they are scared of, confused with, or too lazy to invest time and money to develop. The label provides an excuse as to why they have not been successful or even failed in these regions.

However, having lived and worked in a ‘developing market’ for a long time, I see there are tremendous opportunities in what I call “growing markets.” While pricing is obviously important, customers are looking for LOCALLY available, QUALITY product, with warranties and a RECOGNIZED brand.

Time to Seize the Opportunity in AfricaNine times out of ten, a new potential customer will be more concerned as to whether you have locally available partners who can maintain sufficient stock and honor the warranties. Price comes further down their list. They have all tried the cheapest products and all got burned. We have all learned the important lesson: you have to pay for quality!

This scenario has played directly into the hands of the OEMs and unfortunately, more often than not, into the hands of unscrupulous manufacturers of counterfeit products. This can be highlighted by the fact that HP pulled out of East Africa because they simply could not fight against the counterfeit product.

Certainly, the larger players have suffered declines in their businesses because of the pandemic. Yet, I cannot emphasize enough that anyone who offers quality products, with locally available stock, with full warranties and distribution is going to succeed.

If you have a brand that is recognized as the market leader and you can get the quality, deliverability and the warranties right, then the future looks very bright indeed.

Let me make it very clear: should one of the larger manufacturing groups make the decision to start producing/manufacturing on this continent, especially with the African Continent Trade Agreement being finalized, it will get the lion’s share of the opportunity!

Having been in this industry for the past 30 years, and now sitting in one of the most difficult places on earth to do business (for so many reasons) I can only conclude that we are sitting in exactly the right place, at the right time. The issue here is not where are the opportunities but how best to build on these opportunities and with whom. ■


Striving for Into AfricaSouth Africa-based Lacey is a 30-year pioneer of the office equipment and supplies industry and is keen to introduce key global suppliers to the big buyers across the African continent. Please contact <stuart@delace.co.za>

RT Media is partnering with Stuart Lacey to bring suppliers and buyers together in Africa.

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“Time to Seize the Opportunity in Africa.” Do you have your eyes on Africa? Despite being too complicated in the past it now hosts six of the world’s top ten fastest-growing economies. Add your comments below or join the LinkedIn conversation.

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