Webinar: 'Inventory planning is the biggest challenge when doing business in Africa’
April 19, 2013
The Africa region is an emerging market that gives Dutch companies chances when you manage the specific risks. What are the consequences for the supply chain when a company wants to do business in Africa? General Manager International Sales of Philips Consumer Luminaires Sjouke de Vries will talk about this subject during a webinar at TIAS School for Business and Society.
Why is Africa a booming market for companies?
“The African region is rising. The ascension of the middle class gives companies chances. I’m responsible for the international sales for the Consumer Luminaires division of Philips. The growing middle class is increasingly buying our products for their homes. For the new houses they’re building, but also for the decoration of the existing housing.”
Much difference per country
Are the products you’re selling the same in every country and region?
“Off course it’s another market than the European market. But also within Africa we are facing huge differences between countries. South Africa being a relatively mature market with a modern retail landscape, while in Nigeria modern retail in virtually non-existent. Also products preferences are different per country, for example in some countries simple things like electricity is not always is available. All the 3000 products we have in our portfolio we can sell in this region. Countries which are important to us are South Africa, Morocco, Algeria, Egypt and Nigeria.”
Relationships are important
Is it difficult to do business in the African region?
“Relationships are very important. First you build a relationship, and then you do business. And most African countries have regulations to help their local fabricants. Products from companies abroad have to settle strict regulations. And sometimes you have to deal with corruption. Products can’t cross the border, because the customs is asking for extra money.
Doing business in the Africa region means that you have to balance between risks and opportunities, with are both great!.”
And how does it affect the supply chain?
“In a very turbulent market, where established supply chain processes do not work, flexibility is key! You don’t know if products cross the border in time. Customers are inexperienced in planning, they often work ad hoc. We work with local partners who know the market very well and they make sure they have stock. Planning the inventory is the most difficult challenge when doing business in the African region. In the webinar I will share the supply chain approach we have taken to harvest the sales opportunies.”