INDUSTRY WATCH
AT TIMES, COMPANIES
HAVE HAD TO BUY POWER
GENERATORS, BUILD
WATER TANKS OR EVEN
PAVE ROADS TO GET
PRODUCTS TO THE MARKET
T
omorrow’s technologies are
arriving quicker to the retail sector
then even some of the science
fiction movies from the eighties could
have predicted.
A world where businesses market their
products via augmented reality then
deliver them via a drone does not seem
light years away.
Maybe Back to the Future II wasn’t so far
off the mark after all (it had pencilled in
2015 for virtual reality, tablet computers
and video calls, although we are yet to
see an appearance from a hoverboard).
But for now, the retail sector in Africa is
less Blade Runner and ‘more stall by the
side of the road’.
According to the United Nations
Economic Commission for Africa
(UNECA), 90% of transactions occur
through informal channels in the African
retail market. “Although modern retail
is growing in some African countries,
it is still a fraction of the formal retail
landscape,” says KPMG’s Moshin Begg,
who is Manager of Sales and Markets.
“In terms of distribution, shopping malls
are an obvious channel. However, by far
the most prevalent form of distribution
– particularly in rural areas – remains
setting up a table on the pavement. In
these areas, road shows are an effective
way for brands to get in front of people.”
Driven by higher levels of disposable
income and greater exposure to more
brands online, formalisation of the sector
is expected to gather speed over the
coming years.
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Road blocks for retail
Blocking the path for many companies to
their customers, however, is inadequate
infrastructure. At times, companies have
had to buy power generators, build
water tanks or even pave roads to get
products to the market: “When it comes
to transporting fresh produce, travelling
long distances on roads that are in bad
condition can have obvious effects on the
freshness of the product when it arrives
at its destination,” says Begg.
This is particularly pertinent to the
groceries segment, which is expected
to be a major driver of Africa’s overall
retail growth. Choppies Enterprises is
Botswana’s leading supermarket chain
and is ranked as one of Africa’s fastest
growing retailers by Deloitte. According
to Choppies CEO, Ramachandaran
Ottapathu, IT and connectivity has
helped strengthen the distribution
of its products across Botswana and
surrounding countries.
“Technology has helped us a great deal
in improving our distribution capabilities.
Particularly in preserving the quality and
lifespan of both fresh and wholesale long-
life products,” he says.
In 2014, the company opened a
distribution centre in Zimbabwe as it
looks to grow its presence across East
Africa. From there, the company is able
to manage all its stock centrally and
electronically, enabling it greater control
of stock levels and allocation. “Across
all areas of our operations, from stock
allocation to payments, IT is becoming
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