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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, the African continent has also witnessed an explosion in technology adoption recently and is set to develop as a region.
This is according to Charles Brewer, the 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 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,” he says. “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 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 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,” he says.
Brewer adds 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 percent 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 percent of the continent’s population) by 2060.
The trend of mobile devices preferred over personal computers 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 percent of all IT hardware growth will come from tablets and smartphones this year.
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