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Tuesday 27 July 2021
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Africa the ‘new China’ when it comes to appetite for retail

The African continent is experiencing rapid retail expansion, and is being compared to China in 1987 when it was predicated to be the next big thing(1).

A.T. Kearney’s 2015 Global Retail Development Index has listed Sub-Saharan Africa as the ‘big story’ for 2040, similar to that of China 30 years ago, where today, retailers are expanding four to five times faster than retailers in the United States and Europe.

Recognizing this potential, DHL (http://www.dpdhl.com) is playing a key role in growing retail on the continent via its current footprint of 5800 retail outlets across Sub Saharan Africa (SSA), not by building its own bricks and mortar branches but by partnering with local business owners who act as DHL resellers. Steve Burd, Acting Vice President of Sales for DHL SSA, says, “Thousands of vendors — such as electronics stores, travel agents and stationery stores now offer DHL Express services, alongside their existing product offerings. These small businesses benefit from commission on all DHL sales, an increase in foot traffic as well as being associated with a global brand. We believe that the rising middle class, coupled with market and infrastructure development will continue to drive demand in the retail space in the years to come.”

He points to the 2015 A.T. Kearney 2015 Global Retail Development Index™ which listed three Sub-Saharan Africa countries Botswana, Nigeria and Angola  in the top 30 developing countries for retail investment globally. “Zambia, Namibia and Ghana were outlined as fast emerging and likely to be included on the list in the coming years.”

When looking at the local 2015 African Retail Development Index™, Burd says that it is refreshing to see that smaller markets are emerging and rivaling Nigeria and South Africa, historically considered the continent’s powerhouses. Gabon, Botswana and Angola were listed as the top three countries respectively in the African index, followed by Nigeria, Tanzania and South Africa(2).

“Developing countries, as well as early stage markets with little to no formal shopping culture, are increasingly becoming viable markets for retailers. However, while there are increasingly more opportunities, businesses and investors need to look at each market individually before expanding, as there is no one size fits all strategy for the African market,” says Burd.

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