Serving Southern Africa
The Southern Africa Development Community (SADC) continues to attract global technology companies. With 15 countries making up the block, what are the reasons behind the technology investment appeal?
As the African continent remains the last unchartered region in the world, technology vendors continue to target it as the potential cash cow especially in the Eastern, Western and Southern regions. In particular, the potential for the IT market continues to attract the interest of global ICT multinationals and consumer electronics vendors, and regional IT distributors.
However, with the diverse nature of doing business in SADC and Africa in general, there still remains advantages, disadvantages and challenges of working in such a diverse region.
According to research firm IDC, Africa’s digital future remains bright despite myriad challenges.
Referencing its “Assessment and Outlook of the Digital Media Ecosystem in Africa” report, IDC said increased infrastructural investments, improved connectivity and affordability, positive government interventions, and the spread of mobility, the African digital media landscape is rapidly evolving.
“The digital picture in Africa is changing rapidly,” said Leonard Kore, a research analyst for telecommunications and media at IDC East Africa. “Internet penetration is on the rise, buoyed by increased infrastructure investments, while the landing of undersea fiber-optic cables connecting Africa to the rest of the world has greatly reduced transmission time and costs while increasing bandwidth capacity.”
Uwe Brandkamp, sales director, Westcon, said there are a few things to take into account when building a successful channel in Africa. Firstly, said Brandkamp, each country is different with its unique culture and way of doing business, which means that getting to know this in detail is key to building a successful channel business.
“The international vendor approach that Africa is all the same, and is treated as one country, has failed too often in the past,” added Brandkamp.
Consequently, outlined Brandkamp, Westcon has selected the approach of not using expatriates at its regional offices across Africa. “As a business, we don’t just look to place people, instead we staff the regional offices with local people who understand the market and dynamics of doing business in-country,” he said.
“Another aspect that underpins success or not is careful planning and execution of strategy for each country you venture in, as well as selecting the right channel partners. The way you target businesses must be focused (narrow) rather than a broad based approach, which was particularly popular in the past,” he added. “The strategy must also include training, education, marketing and joint market development and local skills enhancement, stockholding and regular face to face engagements that extend to regional management and leaders responsible for handling the various markets in Africa – and not just a particular region.”
Brandkamp added that when one looks at the distribution segment, other key factors need to be considered if any success is to be achieved when doing business in Southern Africa and broader Africa. “Business basics like in-country stock holding, inventory management, credit terms are all factors, which are a key factor that requires careful attention,” he said.
That aside, channel stakeholders still face a number of hurdles when it comes to exploiting the local discrepancies in Southern Africa not least a thriving grey market and customs and revenue authorities regulations on imports.
Brandkamp agreed and said: “A particular challenge for us is the ability to sort out grey channels, this should be part of every company’s strategy, in order to protect authorised resellers and businesses in the markets and regions that have made the investment and are building their channel offerings.”
Although in the past infrastructure deficit was a key inhibitor to the wide adoption and growth of the ICT sector in Africa, a lack of exhaustive skilled IT talent and skills pool that can innovate and add their own IP to the many technologies that vendors bring to market, remains a challenge in many countries.