from growing vegetables to selling mobile phones, listen to chinese companies talk about their experiences in going global to africa
2024-09-08
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image caption: a community in nairobi, kenya's capital, where nolink provides broadband services. (photo provided by the interviewee)
image caption: african women use their mobile phones to take photos. (photo courtesy of transsion)
image caption: african employees of farmworks are selling vegetables. (photo provided by the interviewee)
image caption: african workers of nolink are installing wifi equipment. (photo provided by the interviewee)
our reporter bai yunyi and zhao jueyun
editor's note: "china is willing to work with africa to implement the 'ten partnership actions for china-africa cooperation to promote modernization' in the next three years, covering the ten areas of mutual learning of civilizations, trade prosperity, industrial chain cooperation, connectivity, development cooperation, health and wellness, agriculture and people's livelihood, cultural exchanges, green development, and security." in the "forum on china-africa cooperation-beijing action plan (2025-2027)" just adopted at the beijing summit of the forum on china-africa cooperation, china announced key measures to unilaterally support africa in the next three years. a reporter from the global times recently talked to several entrepreneurs who have "achieved some success" in africa. through their stories, we learned how to go to africa to find business opportunities and how to make good investments in the field of modernization in africa.
mr. wifi's kenyan adventure: reducing internet prices to $0.07
in nairobi, kenya, zhou tao, the founder of ahadi corporation, has a well-known nickname among locals - "mr. wifi". since 2020, he has been committed to providing affordable internet services to the local community.
like many developing countries, kenya's internet service is expensive: it is understood that a family of three in nairobi spends about $25 a month on internet, which is undoubtedly a considerable burden for ordinary working-class families with a monthly income of only $100 to $400. compared with other african countries, kenya's fiber optic access is very advanced, but only the high-income earners at the top of the pyramid benefit from it. for the majority of people living in the suburbs and urban-rural junctions, how to obtain affordable internet services is still a problem.
after seeing the huge market potential of this digital divide, zhou tao and his team launched a project called "konnect internet". through cooperation with china telecom kenya, they combined wifi technology and metropolitan fiber networks to provide cost-effective wireless broadband network services to local communities. he also set a goal for this purpose: "50g of data for $5."
in zhou tao's words, this goal seemed like a fantasy at the time, but a few years later, it was really achieved. now, konnect users consume an average of 50g of data traffic per month, which is more than 60 times the average level in africa, and each g costs only $0.07, compared with the average price of more than $4 in the african continent, achieving a disruptive change and effectively improving the lifestyle of vulnerable groups. more importantly, more low- and middle-income people have been connected to the wonderful and vast world of the internet.
why is konnect so cheap? in zhou tao's opinion, the secret lies in eliminating the middleman and rapidly iterating technology. "we do almost the entire chain ourselves. we are not only an operator, but also do design, installation, sales, software development, customer service and maintenance." he introduced that currently, nolink technology has 5,000 employees in kenya. "our own installation team is wiring and installing equipment in various buildings in kenya every day, and we install equipment in tens of thousands of households a month."
"as of august this year, we already have more than 1.2 million users!" zhou tao told the global times reporter that in the next five years, nolink hopes to cover 2 million households in kenya, affecting more than 10 million people, and expand its business to other african countries. "if we can enter 10 african countries in the next five years, we may cover 30 to 50 million users. this is a huge market."
during the expansion process, zhou tao and his team have made many localization attempts: "when i first arrived in kenya, i saw locals selling watermelons on the street. they were used to cutting a watermelon into more than 20 slices to sell. each person only bought one or two slices, and few people bought a whole watermelon. i thought at the time that maybe when we provide internet services, we don’t have to provide monthly or annual packages like in china, but we can provide more "small packages", such as weekly or daily packages, or even 8 hours, 2 hours, or 40 minutes." zhou tao recalled to reporters, "later, it was proved that this package design is in line with the local economic development level and consumption habits. the number of our "small package" users is far greater than those who subscribe to monthly packages."
in the process of providing cheap broadband services to kenyan communities, zhou tao also discovered more business opportunities and began to explore more diversified businesses. "first, based on konnect, we launched an e-commerce platform called konnect food+, focusing on community e-commerce and logistics distribution. this platform not only facilitates shopping for users, but also reduces the cost of goods through collective purchasing to reduce the living burden of community residents." the chinese businessman said that for this purpose, they also set up a special storage center, each of which is equipped with a van for delivery.
the second diversified service is "shared drinking water". in african communities, the vast majority of residents do not have tap water and rely on groundwater, but the groundwater is seriously polluted and not suitable for direct drinking. zhou tao and his companions designed a shared drinking fountain that combines a high-throughput water purifier and a scan code payment method to provide residents with clean drinking water at a low price.
the third new business opportunity is "digital wallet". according to zhou tao, kenya already has a mobile payment method mpesa similar to alipay and wechat, but the transfer fee is relatively high. currently, they are developing a free mobile payment wallet to cultivate the mobile payment habits and scenarios of local people so as to develop more value-added services in the future.
in the eyes of "mr. wifi", chinese companies have many advantages in investing in the digital industry in africa that other countries' companies do not have. "thanks to china's rich experience in digital infrastructure and internet services, as well as the advantages of domestic large-scale production, chinese companies have very strong technical strength and cost control capabilities." zhou tao told the global times reporter that compared with european and american companies, chinese companies are very good at doing refined operations in emerging markets, especially good at long-term cultivation in the community. "in addition, chinese companies also have strong advantages in financing and other aspects, and some private enterprises can also get policy support from the 'belt and road', which makes us have great potential overseas."
chinese female boss: africa is not a place where you can make a lot of money right away
before coming to kenya to "farm" and "sell vegetables", li yi had an enviable job - a consultant at mckinsey. at that time, she was working on ppts and serving clients from all walks of life in the los angeles office of the united states. she would never have thought that just a few years later, she would have a 1,000-acre farm at the foot of mount kenya and would follow a truck to the market at 3 a.m. to sell tomatoes.
at the end of 2020, li yi and his kenyan partner peter mushi co-founded an agricultural company, farmworks. its main business is to rely on advanced planting technology to engage in contract planting with local small farmers, provide small farmers with raw materials such as seeds and fertilizers, and standardized services such as spraying pesticides, and are responsible for the back-end crop procurement and sales.
"kenyan agriculture has a relatively low starting point, but has great potential and a high ceiling." li yi described his considerations when starting a business to the global times reporter. kenyan agriculture has a low per-acre yield, lacks talent, and has weak local operation capabilities. on the other hand, africa's rapidly growing population, farmland degradation caused by climate change, and a large amount of basic food dependence on imports have all led to a strong demand for agricultural development, especially for high-yield, cost-effective agriculture that uses better seeds, fertilizers, and technologies.
before li yi, there was no shortage of chinese farmers in africa, but most of them targeted local chinese-funded enterprises and restaurants, and grew vegetables that chinese people loved to eat. but what li yi wanted was to enter the local market and create a scalable and sustainable business model. in response, li yi's approach was to create a "full industry chain" covering upstream and downstream, not only building farms to "grow vegetables", but also "buying vegetables" from local small farmers through contract planting, and establishing sales channels to "sell vegetables".
"now, our self-operated farm is more like a 'demonstration field', mainly doing training, research, technology verification, setting up drip irrigation and other equipment, recruiting and training planting personnel, etc. if it operates well, we will promote the corresponding crops or technologies to the cooperating small farmers." li yi told the global times reporter that the "buying vegetables" and "selling vegetables" links are mainly to solve the problems of "what to plant, how to plant, and who to sell to" for local small farmers, provide them with seeds and fertilizers, encourage them to plant high-value crops, provide them with training, and provide market channels for small farmers.
"compared with local traditional small farmers, markets and supermarkets, our advantage is 'stable supply', which means we have goods to sell every day. this is not easy to do in kenya, and 'out of stock' has always been one of the most headache-inducing problems for many customers. of course, the quality of the vegetables we grow and purchase is also very good, and some products have been exported to europe." the chinese girl introduced that local small farmers can also obtain higher and more stable incomes because of stable buyers.
it is not easy to start a business in africa. in li yi's words, the problems she encountered were like a "whack-a-mole game". "if you knock down one here, another one will pop up there." for example, social governance and rule of law in nairobi are not perfect, and theft by acquaintances happens from time to time. after being reminded by industry seniors, she learned that when hiring security guards locally, they should be from non-local tribes to avoid collusion with local employees, and they should also be replaced frequently. "there are also police officers and urban management officers who stop people on the road to collect tips..." she seems to be always on the road to solve problems.
however, in li yi's view, starting a business in this magical land of africa is a very interesting thing, because she has the opportunity to explore more possibilities. "for example, at the end of last year, our farm cooperated with the international potato center to build the first solar-powered sweet potato storage warehouse in africa, which uses solar energy and a water circulation system to generate electricity. with this storage method, the quality of sweet potatoes can be better." li yi told reporters that this small experiment on the road to sustainable development made her feel very interesting.
"perhaps from the perspective of pure financial returns, africa is not a place where you can make money and make a lot of money right away. but for me, it is a pleasure to do something that always presents new challenges, especially when it can bring some practical changes to the local people's livelihood. i think this is very valuable." li yi told reporters, "in my opinion, the most important thing for going to africa is patience and the determination to take root in this land."
arif, co-founder of transsion:
from four sim cards and four standby to "beautification", there are ways for mobile phones to "break the circle" in africa
from nairobi, the capital of kenya in east africa, to lagos, the largest city in west africa, local residents often see a whole building painted with large blocks of color for mobile phone brand advertisements. tecno, itel and infinix are the three brands that are most enthusiastic about this. these three mobile phone brands all come from a chinese company - transsion. according to the latest data released by market research firm canalys, in the second quarter of this year, transsion's market share in africa's smartphone market exceeded 40%, continuing to rank first.
according to local media reports in africa, transsion officially started selling mobile phones in nigeria more than a decade ago. in 2017, transsion surpassed samsung in africa to become the largest mobile phone supplier in the region. when transsion holdings co-founder and director arif, a bangladeshi who speaks fluent mandarin, first began to explore this continent, he probably did not expect that a chinese company could go so far in africa. in a recent interview with a reporter from the global times, arif summarized transsion's philosophy as "glocal", which means "global thinking, local innovation".
some business analysts believe that transsion's success in the african market is largely due to this deep localization. although the products are not sold in china, some unique features of transsion phones have repeatedly "broken the circle": due to the large number of mobile operators in africa but limited coverage, local users generally have multiple sim cards. transsion has launched a four-card four-standby phone to address this situation; in order to meet african users' love of taking photos, transsion has developed a "beautification" mode for local people's face shape and skin color; in addition, transsion has also launched a series of features that truly capture the daily needs of african users, such as sweat-proof and anti-corrosion, and ultra-long standby.
arif told reporters that with the support of technologies such as artificial intelligence (ai), transsion continues to conduct in-depth customization in the field of dark skin images based on local needs. in addition, for local african languages, such as amharic (the official language of ethiopia - editor's note), swahili (the language used in tanzania, kenya, uganda and other countries - editor's note), hausa (one of the three most important languages in africa, widely used in northern mali, southern niger, northern chad, etc. - editor's note), transsion has built a localized low-cost, high-quality corpus data production system, and applied these technological achievements to multilingual voice assistants, translation and other products.
in addition to the products "appealing to african users", transsion's supply chain, sales system and after-sales system are also highly localized. arif told the global times reporter that transsion's local employees in africa account for more than 90%, and many outstanding local african employees play an important role in the company's production, procurement and sales. in 2018, phase a of transsion's large-scale production and manufacturing center in ethiopia was put into use, with local employees accounting for more than 95%, and most of the managers and chief engineers are locals.
the needs of local users shape products and services, and innovative technologies from china are also truly changing the lives of local people. arif, who has traveled to many african countries, said that from mobile payments to instant messaging, from music streaming to short video social networking, china's digital technology products and services are changing every aspect of african people's lives. for example, in some remote areas of africa, where there are no bank branches, local farmers have realized financial services such as deposits, withdrawals, transfers, and loans through their mobile phones.
in recent years, following southeast asia and south asia, the african market has become a new target for chinese mobile phone manufacturers to expand overseas. logos of mobile phone brands such as vivo, oppo, and xiaomi are becoming more and more common on the streets of some african cities. analysts believe that africa is currently in a critical period where smartphones are replacing feature phones, and mobile phone manufacturers from all countries hope to gain an advantage in this market with unlimited potential.
"africa is the last 'blue ocean market with a population of more than 1 billion' in the world, and it is also the continent with the youngest population structure." arif said that with economic development, accelerated urbanization and increased per capita consumption capacity, under the general trend of digital transformation, the demand for smart terminal products among local residents will continue to grow, with great growth potential. at the same time, as the penetration rate of mobile phones and mobile internet access rates in africa continue to increase, the african people's demand for high-quality mobile internet products and services is becoming increasingly urgent, and the mobile internet industry will also have huge room for development.
compared with china, which has developed communication and mobile internet technologies such as mobile phones, arif believes that many of the accumulated innovative technologies and mature business models can provide reference for the development of related industries in africa, but the african market itself also has its own characteristics.
he analyzed that africa skipped the pc era and entered the mobile internet era directly, and many new products and services were able to seize the market in a leapfrog manner. african users are also mostly first-time internet users, with strong plasticity and are more likely to accept new products and services. secondly, unlike china's single market of billions of users, africa can be seen as multiple fragmented markets of hundreds of millions and tens of millions of users, which places high demands on the ability to quickly replicate products and services under differentiated conditions.
in addition, africa's network environment is poor, traffic and data charges are expensive, and the infrastructure is not sound. arif believes that how to save traffic, how to make products light and provide a smooth user experience in a weak network environment, and how to create a business model tailored to local conditions in response to the current situation of lack of local payment and logistics infrastructure are all important issues that need to be considered for mobile phone companies going to africa.
africa's "sunrise industries" also have unique opportunities
"china-africa economic, trade and investment cooperation will usher in a new cycle and new areas. although the covid-19 pandemic has brought some challenges to china-africa economic, trade and investment cooperation, it has further promoted the transformation and upgrading of chinese companies' investment in africa, and brought funds and technology to the development of emerging industries in africa." the "report on chinese enterprises' investment in africa (2024)" released in august this year summarized the new trends in chinese companies' investment in africa in recent years. "previously, chinese private enterprises' investment in africa was mainly concentrated in four industries-manufacturing, infrastructure, industrial parks, and trade. now, more companies are investing in new areas-medical care, transportation and logistics, e-commerce, and agricultural product processing."
the report, compiled and released by the china-africa chamber of commerce, believes that from an industrial perspective, industries such as mineral processing, agriculture and agricultural product processing, automobile manufacturing, textiles, building materials, chemicals, pharmaceuticals, and new energy are becoming "sunrise industries" in africa with certain endowment advantages, which also provides chinese investors with unique opportunities to transfer the above-mentioned production capacity to africa.
"china-africa industrial cooperation is not about blindly transferring backward industries, but about taking an innovative path that suits the actual conditions and development models of china and africa, and about increasing the volume rather than reducing the stock." the report said that in order to meet africa's core concerns of accelerating industrialization, respond to the food crisis, narrow the trade deficit, and reduce the debt burden, as well as the common vision of building an integrated market, china-africa investment and financing cooperation in the future should focus on helping africa build high-quality infrastructure, develop clean energy, promote agricultural modernization, increase the added value of resource products, and expand african commodity exports to china.
judging from actual projects, china's investment in africa is generating increasingly significant economic and social benefits. for example, in the fields of transportation, energy, electricity, housing and people's livelihood, china has implemented a number of landmark projects and "small but beautiful" projects, which have effectively driven local economic development and improved people's livelihood. at the same time, in the fields of digital infrastructure construction, e-commerce, mobile payments, etc., the active participation of chinese companies has also promoted the digital transformation and industrial upgrading of african countries. in terms of investment methods, in addition to sole proprietorship and joint ventures, equity participation and mergers and acquisitions are also gradually increasing.
zhang jian, president of the zambia chinese association, told the global times that in recent years, chinese companies' investment preferences in zambia and other african countries and african countries' demand for chinese companies' investment have changed. for example, zambia and other countries hope that chinese companies can transfer more technology to truly "teach people how to fish". currently, chinese companies are actively looking for new investment areas such as photovoltaics, agriculture, and e-commerce in the country. taking photovoltaics as an example, the country has a serious power shortage, but the sunshine time is long throughout the year, and the development prospects of the photovoltaic industry are very broad.
however, several industry insiders who have gone to africa told the global times that they should also conduct adequate preliminary research and risk assessment before going to africa. a chinese business person who often travels to west african countries such as niger told the reporter that some african countries are affected by economic conditions, social conflicts and other factors, and the domestic security, political and economic situation is unstable, and some investors have "lost all their money". chinese investors are generally unfamiliar with the complex local situation, and companies need to avoid political, ethnic, religious and other risk factors as much as possible during their operations, such as not "taking sides" with any party in elections.
in addition, when investing in africa, we must also pay attention to the different actual conditions of african countries. according to the kenya chapter of the "country (region) guide for overseas investment and cooperation" jointly issued by the ministry of commerce's department of overseas investment and economic cooperation and the economic and commercial office of the chinese embassy in kenya in the first half of this year, it is reminded that from a practical point of view, there are still many risks in direct investment by chinese companies in kenya. for example, due to the accelerated accumulation of kenya's foreign debt and the impact of the epidemic, the government's finances are becoming increasingly tight, the number of bidding projects is expected to further decrease, and there is a phenomenon of delayed payment of projects. in addition, in terms of financial settlement, the financing cost of kenya's financial industry is relatively high, and kenya has no foreign exchange controls. affected by the epidemic, the us dollar interest rate hike, and the conflict between russia and ukraine, the kenyan currency exchange rate fluctuates greatly.
therefore, when chinese companies carry out investment, trade, contracting projects and labor cooperation in kenya, they should pay special attention to prior investigation, analysis and assessment of relevant risks, and do a good job in risk avoidance and management, including credit investigation and assessment of project or trade customers and related parties, analysis and avoidance of political and commercial risks in the project location, and feasibility analysis of the project itself.
the south african chapter of the "guide to overseas investment and cooperation by country (region)" reminds that the south african trade union congress is one of the three-party ruling coalition, and chinese companies must strictly implement the legal employment system to avoid disputes with trade unions. south africa attaches great importance to domestic employment, and it is difficult for chinese labor to enter the south african market. in addition, south africa has strict environmental protection laws and regulations, and the local people are consciously environmentally friendly and have a strong awareness of wildlife protection. chinese companies should comply with environmental protection standards, understand and comply with local environmental protection laws and regulations, especially local laws and regulations. at the beginning of project planning, they should consult local governments or relevant agencies on environmental protection matters, pay attention to ecological and environmental protection in investment and operation activities, and prevent industrial pollution.
"in recent years, attracted by the huge business opportunities in africa, many companies without financial, technological and management advantages have also 'gone overseas'. this not only faces huge operating risks, but also makes local people have the wrong perception that 'chinese companies influence all walks of life'." a chinese businessman who opened a construction company in zambia told the global times that companies' investment in africa needs to combine their own characteristics with local needs, and it is not advisable to go to africa blindly.
mwangi wachira, a kenyan government adviser and former world bank economist, said in an exclusive interview with the global times that with its young population, expanding middle class, and globally demanded commodities and minerals, africa is expected to become one of the main forces driving global economic growth. "history tells us that all industrialized countries today have experienced risks such as political instability, insecurity, and opaque governance, but in the end they overcame these challenges and effectively reduced investment risks." he said, "investment risks in africa are not unique. those african countries that are facing conflicts and poor governance today will eventually stabilize over time and become more attractive to investors."▲#deep good articles project#
