Here we go again. In this end-year shopping season, Made-in-China toys have invaded various markets across Africa. They have landed in places that have been waiting for them feverishly. In everyday conversations, some of the narratives that have defined 2016 – the jobs wiped out by the oil crisis, the prices gone up due to the plunging currencies – are KO’ed by the eagerness to spend, the irresistible taste for trying new things. Streets are lavishly covered with adverts, radio and TV play commercials with the highest rotation, malls and stores promote their extended opening hours and oversupplied shelves. Consumers are salivating, hypnotized, under heavy influence. Stakes are high.
So Chinese merchants don’t bother with establishing stores, decorating windows, promoting products. They just find an empty, warehouse-like space in a popular market, unload the trucks, expose the merchandise straight from the box and open the doors. In a matter of minutes, shopper masses rush to the items. In these hard discount bazaars and fast shopping kingdoms, space is scarce, the heat is unbearable, the noise is deafening, the darkness is omnipresent. Brawls, stampedes, even fights erupt. Sales people are trampled, security staffs are overwhelmed. In comparison to the chaotic Black Friday sales in the USA, the scenes here have an equal degree of violence (albeit sans guns).
Convinced that everything is in limited stock, everything is new, everything is wanted by the next shopper, shoppers are obsessed, ecstatic about the “treasure hunt”. Perceiving that the prices are still high and can go further down – even though they are already amazingly low – shoppers bargain hard with the sales staff. Add the yelling and fingering, the language barrier, the contagious nervosity, the people changing their minds repeatedly, the last-minute let-me-take-that-too; and you get extremely long waiting lines at cashiers. On average, shoppers spend four-to-five hours in these toy stores…which actually sell much more than toys. There you also find condoms, DIY tools, clothes, shoes, ustensils, school stuffs, umbrellas, snacks, sunglasses, cellphones, chairs, luggages, pillows, radios, plastic buckets, trash bags, lamps, napkins, cosmetics, fake flowers, and the list goes on and on. It looks like China manufactures, exports and sells everything you need.
Yet, the families I meet after their shopping spree are happy to have their hands firmly tightened on bundles of cheap, flashy toys and many other things they hadn’t planned to purchase. They are deeply seduced by the choice and the prices. Some are perplex when they found out the total money they spent or how they will bring all the stuffs back home.
But families also expect that there will be not much left of these toys in the hands of children in a matter of weeks. The balls will burst, the dolls will be dismembered, the guitars will lose their strings, and finally all the toys will end up in the trash without the slightest hesitation.
Africans massively buy Chinese toys for what they are – frequent purchase, rapid consumption, low involvement – and adhere to what Chinese merchants wrote in poor french or english at the door – “no refund, no exchange, no repair”. As much as African consumers want quality and durability when deciding on a purchase, when it comes to toys and certain product categories, they go for the cheap, unbranded, extremely fast moving.
One reason is that durability is less of a concern than it used to be. In today’s Africa, consumers are more open to new brands, new tastes, new trends, particularly the young, urban and educated crowds. This leads us to a set of questions:
- For which products and brands consumers choose quality/durability over price?
- For which products and brands would they pay a premium?
- What’s the future of Western brands in African consumers’ wallets?
- What does it take for consumers to show greater affinity for Made-in-Africa?
I will be answering these questions in Amsterdam The Netherlands on January 20, 2017. At the famous Heineken Experience venue, I will be presenting “The African Consumer Trends 2017″. It’s an exclusive delivery, a product of months-long cross-country field research, and a wealth of actionable insights. More information on www.sanec.nl.
Until recently, as the relationship between Africa and China kept on growing both in depth and scope, air travel and hospitality remained relatively immune to the transformations seen, say, in agriculture, infrastructure, retail, and other sectors that are priority destinations of China’s investment. There were only a limited number of Chinese routes operated by African carriers and virtually no African route serviced by Chinese carriers. Almost everywhere across Africa, China built lots of dams, bridges, roads, a few airports, but no hotels.
Enter Ethiopian Airlines, Africa’s most profitable airline according to the global aviation industry association IATA. Data from OAG, an air travel intelligence company, show that of all the few African carriers catering to the Chinese market, it is Ethiopian who captures the lion’s share in the continued growth of the number of Chinese travellers to Africa. In terms of annual capacity, it went from 100,000 in 2007 to more than 350,000 in 2015.
A key enabler of Ethiopian’s leadership is the ideal geography of its hub, Addis Ababa International airport (ADD). In just a decade, ADD has seen an acceleration of the growth of the passenger- and cargo traffic and has become the epicentre for Chinese travellers in Africa.
It is anticipated that ADD will further grow as the leading gateway to Africa for at least two other reasons. One, Air China, a leading carrier in China, is finalizing its entry or redeployment in Africa. For this development to be commercially sound in a market deemed as fragmented, it has showed an inclination for using ADD as a hub.
Two, as part of China becoming the world’s fourth largest source of outbound travel by 2020 (with 100 million outbound travellers, according to the World Tourism Organization’s projection), the number of Africa-bound Chinese tourists will increase. Again, it is anticipated that they will see ADD as a platform leading to a wide array of African destinations.
Mr Feng, who originates from Jinhua, in the Zhejiang province, eastern China, and runs a small company in the agri-business in Yaoundé Cameroon, travels to China a dozen of times per year, going through ADD on each trip: “There are definitely more and more Chinese people coming. Years ago, they used to come from just a few places [in China], now all China meets here. Then from here Chinese people spread across Africa (…) It used to be only seasonal construction workers. Now I see all type of people, families, women alone, well-to-do people. Sometimes we talk, I get ideas about destinations in Africa. So my fiancée came to visit”. Him and his fiancée – who still resides in China – have visited various places across Africa over the last eight years. He says the fact that Ethiopian Airlines hired a full Chinese cabin crew was a game changer. “My fiancée was overwhelmed! More and more Chinese newcomers in Africa means more Chinese needs, more Chinese changes“.
But Chinese travellers landing in Addis Ababa International come face to face with a huge problem in the form of extremely lengthy layovers, numerous delays, cancellations and mismanagement in a string of areas. As a result many passengers find themselves stuck, stranded with very few options to kill time. The scenes of Chinese fliers sleeping on the floor, in corridors and concourses, and virtually anywhere they possibly can has become familiar.
This situation clearly points to the lack of hotels at ADD. Of the four major airports receiving Chinese passengers (Johannesburg, Cairo, Nairobi, Addis Ababa), ADD comes out as the least equipped in hotels, both in terms of number and calibre. Currently stranded passengers must resort to a handful of international four/five star hotel chains and a sizeable offering of motel-like, average quality hotels. In absence of a commuter train, guests must still rely on taxis and buses to get to a hotel.
Re-enter Ethiopian Airlines: the company is building a 40,000 sqm, 4-four star hotel on the site of ADD. The contractor is AVIC, a Chinese company, the financial backer is Eximbank of China. Both are stated-owned companies acting as vehicles for investment and foreign trade in Ethiopia, Algeria, Tanzania and other parts of the continent. The Ethiopian Airlines hotel will be the closest hotel to ADD, reachable within minutes via a connector.
Mrs Bao, says her time at ADD became lengthier over the years as her business trips became more frequent between Dar-Es-Salam, Tanzania – where she runs a prosperous furniture business – and various cities in China. “Sometimes I have layovers of five, seven hours, other times it’s ten, twelve, even fifteen hours. I stay at the airport. I am always very wary of leaving because visas, transfers, luggage and other issues cause such a waste of time (…) I cannot wait for new things to do at the airport and new hotels where I could just walk in and out”.
In 2014 she had siblings and relatives move to Tanzania to help her with the business. “I see more and more Chinese people coming to Africa” she says, “they are coming with their habits, they will want many things where they will be spending time and money. Because of that, there will be great changes in Africa.”
This is the second stop in the series focusing on the experience of Chinese Africans. It started with a little lady playing on the sidewalk of one of the central arteries of Brazzaville, the capital city of the Republic of Congo. She represents what the Chinese immigration across Africa has become in recent years: a quiet steady influx of families and children.
In this episode we push Rewind and Pause on who and what started this era-defining phenomenon: male professionals in the construction sector. They too, like the little lady, are shifting from temporary work visas to long-term – even permanent – stays as there are more and bigger Made-By-China infrastructure projects across the Continent from roads, bridges, dams, malls to hospitals, schools, public buildings, private houses.
The gentleman portrayed here manages a construction project in the centre of Brazzaville. The site is situated at 5-7 minutes walk from the monumental statue of Pierre Savorgnan de Brazza, the French explorer who founded the city in 1883.
Generally speaking, the presence of an entire all-Chinese hierarchy on a site from entry-level and technical teams (electricians, operators, ironworkers) to senior level personnel (engineers, project managers, architects) is indicative of the size of the project. This one is massive.
The place used to host a giant outdoor swimming pool used by the personnel of the French colonial administration decades ago. It bore the name of Anne Marie Javouhey, an illustrious French nun.
Tomorrow there will stand what the Project Manager called with ample gestures “grand hotel“. That’s Brazzaville’s journey in 70+ years: a one-way ticket from a past conceived, built, named, visited by France (the Brazzaville Conference in 1944 is the sole grand event that the Général de Gaulle attended on the African soil) to a future that China is shaping and building today.
As far as I can see, today’s Chinese-built Brazzaville, Abidjan, Alger, Accra or Nairobi do not integrate Chinese architecture and design. There is not yet Chinese content inside these Made-By-China hotels, malls, airports, schools and hospitals.
For toys, homewares, clothing, household appliances; African consumers mostly purchase Made-In-China. But given their strong relationship with France or the UK encompassing everything from the official language, education to modern culture and products, consumers still want the European quality and excellence in many other product categories. Pharma, air transport, packaged food are a few examples.
Will Western companies see and seize these opportunities? Or will China, India, Brazil or even South Africa, Morocco – thanks to their rising industries and the growing intra-African trade – increase their share in consumers’ spend?
This is an introduction to a new, weeks-long series that chronicles across several cities the role and impact of Chinese Africans on consumers experience.
Much has been already said, written and debated about the transformative relationship between China and Africa. My modest contribution to this extraordinarily interesting examination of this era-defining phenomenon will be what GainXperience does: focusing, zooming in on the radical change at the level of the experience of African consumers.
Every day, African consumers engage in a close relationship with Chinese laborers, merchants, construction workers, artisans, engineers, restaurateurs, practitioners and trainers. Nevertheless, in their conversations, consumers confine the Chinese presence to work and short- or medium term.
That’s why “Reset” is the word that first appeared to me when encountering this little girl a few weeks ago. It was in one of the busiest shopping and administrative streets of Brazzaville, Congo.
She speaks Mandarin of course; but my guess is that she will also speak French, Lingala and/or Kikongo, the main languages in the country. She is there to stay. She is the first generation of Chinese Africans.
In the years ahead, I expect to see more of this first generation of Chinese Africans including China-born children, teens and young adults living in Africa, Africa-born children of Chinese descent, and even Chinese-African couples and families.
Consumers are already impressed by, often conversational in great lengths about the great ease, the fast pace, the true depth with which Chinese “temporary workers” understood their cultures and met their needs. The Chinese immersion deep in the trenches is astonishing: I went in remote parts of two African countries, the only non-African people I met were Chinese workers, speaking the local language!
Therefore, in the event Chinese Africans do agriculture, manufacturing, sales, marketing, engineering in the years ahead; I expect them to go far beyond today’s Chinese jobs (i.e. merely importing Made-In-China consumer goods, craftsmanship or machinery).
They are set to be powerful agents of long-term societal change as they will be in a position from the inside to design and influence the consumer experience at a level never-seen-before.
The same day I met the little girl, a gentleman waiting in a queue in a government office told me “Before it took us pain and sacrifice just to afford one decent suit. Now thanks to them [China], I have many suits. I can change suits in the same week!”
A sizeable number of medium- and large scale airports with a coastal or central geography in Africa claim to be the “gateway” to the Continent. In reality, very few can match the magnetism of Addis Ababa International Airport (ADD) or Cairo International Airport (CAI). They are truly the places where Africa, Europe, the Middle East and Asia converge in a frenetic fashion, with huge passenger numbers. To many aviation industry observers and insiders, these airports’ inexorable transformation comes out sometimes as a surprise.
In recent years, at several African airports, the passenger traffic not only grew at a faster rate but also shifted to a certain degree of sophistication. The massive Chinese contingent no longer comprises solely of male construction workers. Its ranks now also count investors, government officials, mid- and senior level professionals in consumer goods, retail, infrastructure, transport, energy and mining sectors. Couples are also coming.
Similarly African travellers are shifting to a higher calibre: they are middle-class, young entrepreneurs, millennials, women – many travelling solo; all en route to or back from a wide range of shopping-, business-, higher education destinations. Since 2004, off all the passenger segments, the intra-African has generated the healthiest growth.
New categories including cosmopolitan travellers and “modern explorers” show strong potentials with numbers coming just short of equalling those of the traditional clientele (backpackers, tourists, NGO workers).
More Customers, New Needs
With the growing influx of African travellers and other new passenger types, what are the consumer needs that ADD and CAI should meet if they are to live up to their status as leading gateways to Africa?
To find out, we met a diverse panel of travellers at ADD and asked lots of questions about how they rate this airport, the areas critical for their airport experience, among other topics.
A majority perceive that ADD perfectly reflects Ethiopia’s identity as a formidable global crossroads. They therefore want to see something that tells Ethiopia’s story or showcases Ethiopia’s uniqueness, a landmark like the Origami Museum at Tokyo Narita airport or the Faces Of Ireland exhibition at Dublin Airport.
They want to feel connected with the local culture and enjoy locally made food, drinks, events and art.
Many businesspeople shortlist quick food service, charging stations, global calling, good customer service and choice in their retail experience.
With plenty of time to kill at the airport due to lengthy layovers, the millennials we met, had a radical demand: no boredom. Their wishlists include laid-back lounges, shared spaces, free wi-fi everywhere and non-prohibitive credit card rates in shops.
Overall African airport customers want choice, quality, value, excitement and good quality service.
As I am writing this ADD does not meet these needs yet and still endures a mixed reputation. Nevertheless, it has big plans to become a continental leader as a large-scale terminal expansion project is under way. According to the development plan, in three to five years, the new terminal will offer new boarding gates and bridges, malls, lounges, recreation areas, offices and parking spaces.
With an annual capacity expected to increase from 7 to 22 million passengers, traveller spending will dramatically go up.
But users of today’s airports are no longer “travellers” or “passengers”. To most, an airport is less about sitting, waiting, travelling. Personally I have lost count of the number of new friends I made, new things I learned, unique experiences I lived and simply great shopping I did, at an airport. Or was it at an art gallery, a restaurant, a live music show, a flagship store that happened to be located in an airport.
Consumers, new “travellers”, cosmopolitan travellers in Africa, aspire to see the terminal time, not as a dead time, but rather a time for connections, discovery, excitement, memorable stories to take home, great eating and shopping.
They expect to see a sense of place and an invitation to engage in a serious relationship with all the makers of the airport experience, from the airlines, airport operator to the retailers and brands.