Viewpoint: Shaping markets of tomorrow or an African "go to" strategy
Africa provides a very dynamic but sometimes very challenging environment
At DHL we are shaping the markets of tomorrow. Not only are we the leading logistics company in the world, but the leading one in Africa too – we have over 34 years of experience as a pioneer and innovator on the continent.
I’ve been in Africa for about a year and there hasn’t been a single week without an overwhelmingly enthusiastic and positive experience. However, there also hasn’t been a single week without a frustrating moment – Africa provides a very dynamic but sometimes very challenging environment. And it means you can’t always play by the playbook…
An interesting local example is the political tension between South Sudan and Sudan. Many countries don’t recognise South Sudan as a shipping destination so, in error, they send their goods through to Khartoum. And, rather than promptly reshipping the goods to South Sudan, it can take days for DHL to obtain the necessary customs release and on-forwarding from the authorities. This example – one of many – shows how the emotive political relationships between countries play into the logistical challenge of doing business in Africa.
However, Africa is not always alone with its challenges. I spent eight years in Asia-Pacific and that region has certainly evolved. Only ten years ago, doing business in China or India was considerably more complicated than it is today. For example, India has twenty eight states, and each one can work autonomously, which creates major logistical challenges.
The biggest issue in Africa is the physical infrastructure itself – whether you move a product across border by road, train, plane or ship. This doesn’t, in my opinion, prevent growth but is a fairly unique challenge that working in Africa creates – it adds to the cost of doing business.
For example, in Mali, the two largest cities share a joint population of just over two million people but there are over twelve million people who don’t live in those cities that, for the most part, have never touched or seen one of our products. So the challenge is getting your product into those markets but, equally, it is an enormous opportunity as well.
We’re therefore concentrating on a ‘go to’ strategy which targets the 80 – 90% of the African population who live outside of urban centres. If you can tap into this market, and create the infrastructure and accessibility, then the sky is the limit.