CAPE-TOWN, South-Africa,
• 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.