Afpedia Products For Sellers For Buyers Trade Shows Industrial Cluster

Online Translation

Sign In

Join Now

Help

简体中文

China, Nigeria trade still on the rise despite Covid-19 restrictions

China, Nigeria trade still on the rise despite Covid-19 restrictions

Image from South China Morning Post 


Thousands of Nigerians would regularly travel to the southern Chinese city of Guangzhou to make business deals before the pandemic struck.

Nigeria, Africa’s most populous country, buys more Chinese goods, including electronics, machinery and clothes, than any other African nation, followed by South Africa and Egypt. And for more than a decade China has been Africa’s largest trading partner. That helps explain why Guangzhou, known for its trade deals and manufacturing hub, is home to a thriving community of around 16,000 Africans who work and/or study there, with most of them from Nigeria.

But despite the economic knock-on effects of Covid-19 and travel restrictions, Chinese imports to West Africa’s Nigeria have still risen and deals are still being done. In 2019, before the virus wreaked havoc around the globe, the country bought goods worth US$16.63 billion from China. Last year, according to Chinese customs data, imports grew to US$16.78 billion.

Samuel Karanja, CEO of the Importers and Small Traders Association of Kenya, said the flow of trade between Africa and China is being facilitated in Guangzhou by Africans who remained there during the pandemic. Some help to buy products for businesses in Africa whose employees cannot currently visit China.
Nigeria, with more than 200 million people and a growing middle class, is of particular interest to Chinese investors and companies, including those in e-commerce and tech.

On June 24, Cainiao – the logistics arm of e-commerce firm Alibaba, which owns the South China Morning Post – added its first air cargo route between China and Africa, targeting Nigeria. It will operate six times a week, from Hong Kong to Lagos, Nigeria’s economic hub, where Cainiao’s local partners will step in to complete deliveries. The new route will cut the number of days to ship products from 60 to 20, as previously cargo had to transit through the Middle East.

Cainiao said it has entered Africa when bilateral trade between China and Africa is booming and in response to the growing purchasing power of African consumers. For 11 consecutive years China has been Africa’s largest trading partner, reaching US$186.97 billion last year although that was a 10.5 per cent drop on 2019.
Six reasons Africa finds China attractive, and Western criticism unjust
26 Jun 2021

Cainiao said it grew its May 2021 cross-border e-commerce parcel volume between China and Africa by 163 per cent compared to the same month last year. The firm estimated the African e-commerce market would reach about US$34.6 billion by 2024, an average annual growth rate of 17.1 per cent.

The new cargo route showed Cainiao could take advantage of industry partnerships “to aggregate resources to mitigate disruption while enhancing overall logistics efficiency”, said William Xiong, the firm’s chief strategist and general manager of export logistics.

Cainiao also operates cargo flights to Eastern Europe, Latin America and the Middle East. Its parent company Alibaba already allows traders in some African countries, including Rwanda and Ethiopia, to access China through the company’s Tmall marketplace.

In Africa, internet access is improving as more countries invest in better connectivity and Chinese technology companies, like Huawei and ZTE, are involved in building Africa’s technology infrastructure. Chinese smartphone companies, including Transsion and Oppo, dominate the continent’s mobile phone market, helping increase the penetration rate.

The African continent has attracted millions of dollars from Chinese financiers for the building of data centres and fibre-optic cables, including the 15,000km (9,300 miles) Pakistan & East Africa Connecting Europe (Peace) cable, which is expected to be completed later this year.

Fred Peng, the Chinese owner and CEO of Tulia Online Shopping, an e-commerce business based in Kenya, said that with e-commerce markets in Europe and the US now developed, sellers want to try in Africa, where cross-border e-commerce is still young. “There are many opportunities in Africa. That is why Cainiao offered their services in Nigeria and they will come to Kenya in the near future,” said Peng, previously Kenya country director for the Chinese owned e-commerce firm Kilimall.

China’s e-commerce and live-streaming booms are opportunities for private equity, Carlyle Group saysChina’s e-commerce and live-streaming booms are opportunities for private equity, Carlyle Group says

China’s e-commerce and live-streaming booms are opportunities for private equity, Carlyle Group says
Other Chinese-owned e-commerce businesses operating in Africa include KiKUU and Xpark. However, Jumia is the largest e-commerce player on the continent, sometimes referred to as Alibaba in Africa or the African Amazon.

Peng said Covid-19 disruption may have driven many consumers online, but there is a growing force of cross-border e-commerce in Europe and the US that is pushing companies to seek opportunities in Africa.

Adedayo Ayeni, an analyst at investment bank Renaissance Capital, said the continent’s attraction could be in projected numbers. Some point to e-commerce in Nigeria rising to US$75 billion by 2025. However, estimating the size of the e-commerce market in Africa is still guesswork, he said, as according to consumer data firm Statista, it was worth US$18 billion in 2020 and set to hit US$34.7 billion in 2024, much less than the Nigerian estimate alone.

He thought there was no better place to be than Africa given the size of the young population and with around 60 per cent under the age of 25. “Younger consumers tend to look overseas for branded items such as clothing and gadgets,” he said. And the continent’s size and growth outlook means attractive opportunities for companies providing services like logistics, delivery and payment processing, he added.

Dobek Pater, business development director at ICT market research firm Africa Analysis, said the use of e-commerce services has accelerated across much of Africa in the last year. Such services are now feasible or accessible to a large swathe of the population.

As an example, Takealot.com – the largest e-commerce company in South Africa – had its best growth year ever, Pater said. “I would assume that a considerable portion of this trade also goes to Chinese e-commerce companies.”

Pater added that in terms of e-commerce, African markets are often still in the early phases of growth in relation to the extensive use of ICT for everyday activities. “By entering the market early, Chinese companies are positioning themselves to take advantage of future growth opportunities as the use of ICT-based services grows,” he said.

Advertising
As an authority of media industry, we can provide you integrated brand communication on your products! Reasonable advertising prices will let you enjoy great over-valued service!”
Customized Service
Customized information such as product prices, company trends, market forecasts, price curves, etc. will help you fully grasp the latest trend!
Investigation
Tailor-made, in-depth, professional research reports which will explore the business opportunities is your effective decision-making reference!
Data
Professional and accurate trade data will help you break through the export bottleneck of products, track peer dynamics, and grasp industry trends!
Others

Buyers Suppliers

Hot Search