The Market For Computers in Africa: Dubai Exporters Seek Importers in Africa

The demand for computers and computer-related products and services has registered a marked increase in Africa due to the ongoing process of computerisation that is sweeping through most African countries at the moment. The UAE computer market represents one of the largest trading sectors in the country. Its turnover is estimated to be almost at par with consumer electronics and electrical appliances. The retail network for computers in Dubai is next in size only to the network of foodstores, textiles, gold and electronics. The annual turnover of this market is estimated at about US$1 billion per year. Imports heavily outweigh both manufacturing and re-export activity. Domestic demand for computers and related products forms a major share of the total trade. A substantial portion of the domestically sold computer hardware and software is bought by tourists, shoppers and home-going expatriates, i.e technically re-exported. According to trading sources, this may be upto 30-40 per cent of the total turnover. Little wonder then that the UAE has emerged as the IT centre for the Middle East and nearby markets. -

Demand for computer hardware and software has been increasing steadily since the mid-80s, but growth has been particularly high during the 2004-2006 period. The largest demand is for computer hardware, which accounts for nearly half of the demand. More than 60 per cent of the supplies are from manufacturers based in the Far East. The re-export trade is overwhelmingly for computer hardware destined for Iran, GCC, Indian sub-continent, CIS and Africa. Re-exports to African countries has registered a two-fold increase in the last two years.

In the last 10 years, the UAE has seen the rapid development of a large computer trading and manufacturing sector. A number of computer traders in Dubai have now started assembling their own PCs for distribution in their re-export markets. Most of the locally assembled PCs are catering exclusively to exports, mainly to Iran, CIS, Africa and the Indian sub-continent. However, with stiff competition and lower profit margins, UAE computer dealers are looking to other markets. Africa has been targeted by UAE companies as the next emerging market for computer hardware, software and accessories. Large number of buyers from Kenya, Uganda, Tanzania, Eritrea, Senegal, Congo and South Africa are seen buying large quantities of computer hardware and accessories from the various computer shops in Dubai. From printer cartridges to complete computer systems, these African buyers are buying increasingly large quantities. Low prices and the availability of a wide range of products are major factors that have attracted African buyers to the UAE.

While the competition is open, in line with the government's policy of free trade, the intensity of competition has led to the UAE market becoming extremely price sensitive. The stiff competition in the UAE has had its spin-off benefits for the customers as the rates for computer hardware and software are amongst the cheapest in the world. It is estimated that the UAE's computer industry is growing at an average rate of 10 per cent every year. The continued growth of the international IT industry can be gauged by the fact that more PCs were sold worldwide than television sets for the first time in 1996. The rising demand for computers in African countries is attributed to the process of computerisation that is currently sweeping across the Dark Continent. Government departments, schools, private offices and homes - computers are gaining ground all over Africa. As the drive for computerisation gains momentum in Africa, demand has also registered a huge increase. Africa is said to be one of the fastest growing markets for IT in the world with an annual growth rate of more than 14 per cent.

To cater to this increased demand many multi-national computer manufacturers are targeting Africa in a big way. Microsoft has already opened a sales office in Nairobi to meet the rising demand in East African countries. Microsoft has over 25 offices in Africa and Bill Gates himself visited Africa recently. African customers find the UAE market particularly attractive. "In Uganda the price of a PC is almost double of what it is in Dubai, says Jenie Birungi who had come to Dubai from Kampala specially to buy computers for her office. "Even after paying import duty in Entebbe, it works out to be much cheaper to buy from Dubai," she said. Besides the price advantage, African customers are also impressed by the wide range of products available in UAE's computer stores. The latest models of of almost all major international brands of computers are readily available in the UAE market besides many new accessories and software that are not available in many African countries. All these factors have combined to make the UAE one of the best places to buy computers from - specially from an African viewpoint. The computer sellers in the UAE welcome the African buyers not only because they are bulk buyers, but also because they pay cash for their purchases.

To further increase their exposure in the African market, a large contingent of UAE-based companies will be travelling to Uganda to participate in the upcoming 3rd Afro Business Trade Fair in Kampala. The Afro Business Trade Fair is considered to be the biggest event of its kind and will provide UAE companies an opportunity to showcase their goods and services in the growing East African market and to appoint dealers and distributors for their products. Industry experts believe that the UAE computer industry can benefit a great deal by promoting itself in the African market rather than to wait for African customers to come to them. South Africa has managed to gain a substantial share of the total African market by launching a systematic and concerted drive to attract customers from other African countries. The prices offered by UAE companies, in many instances, are even lower than that of South African products. Yet the lack of a co-ordinated marketing and advertising campaign by UAE companies has resulted in a slower rate of growth in the African market. The UAE computer industry stands to gain a lot by promoting itself specifically in the East African countries of Kenya, Uganda, Tanzania and Congo because of their geographical proximity and the low cost of transportation to these countries.

Participants at the last Afro Business Trade Fair held in Kampala were surprised at the overwhelming response they received and some are even contemplating opening offices in Uganda to further boost their sales in the East African markets. With Dubai established as the distribution centre for the Middle East region, it is well placed to meet the growing demand for IT products and services in Africa by sourcing out of the Far East. By linking the growing economies of the Far East with their markets in Africa, Dubai is well placed to take advantage of its geographical location and its infrastructural facilities.

South Africa's computer market, valued at close to $1 billion, is changing its focus from mainframes to personal computers and PC-based networks. This transition, further stimulated by the continually increasing processing power and decreasing prices of personal computers, is also boosting demand for laptop and notebook computers, peripheral equipment including printers, storage devices

and other add-on hardware. In addition, South Africa is also a major supplier of IT products and services to its neighbouring countries like Botswana, UAE firms are known for re-exporting established computer branded products into the international market at competitive prices and are gaining increasing market share not only in South Africa but also in the East African countries of Kenya, Uganda, Tanzania, Eritrea and Rwanda. Locally assembled PCs are also gaining popularity in these markets because of their low prices. New legislation has also opened up a huge market for computer hardware in Cameroon.

Business Advise
HOW TO PROMOTE YOUR BUSINESS IN AFRICA

There are a few easy ways for computer dealers and manufacturers to make their presence felt in the markets of Africa. For traders of computer accessories and peripherals, Africa is indeed a very lucrative market. Those dealing in products manufactured in the Far East (China, Korea, Thailand, Malaysia etc) will find a ready market for their products as Africa is by and large a very price-sensitive market. It is a well known fact that African customers prefer cheaply priced goods from the Far East rather than the expensive ones from Europe and America. You can promote your products and/or services in Africa through many mediums:

The first and foremost, and by far the most effective, is to establish direct contacts with your business counterparts in these regions by participating in the forthcoming 3rd AFRO BUSINESS TRADE FAIR which is being held in Kampala, Uganda just before Christmas season. Supported by the Uganda National Chamber of Commerce and the COMESA Business Community Committee, the AFRO BUSINESS TRADE FAIR has established itself as one of East Africa s prime trade events. In the past few years, many international companies, specially from the Middle East, have used the AFRO BUSINESS TRADE FAIR to improve their presence in the East African markets. Information on participation and stall availibility can be obtained from the Organisers.

The growing use and influence of the Internet can also be harnessed to promote your business in the African markets. By posting your business proposals on the African Classified Advertisements section, you can expect direct responses from your business counterparts in African countries. Employing the growing influence of Internet technology to promote your business in international markets is one of the most simple and effective promotional tool for forward-looking enterpreuners. Simply post your message and wait for the results. Simple!

Download the Kenya Importers Directory and start sending emails to your business counterparts in Kenya and establish a business relation with them. Kenya is known as the "Gateway to Africa" and is a major importer and distributor of goods in East Africa. The Kenya Importers Directory is a perfect way to reach the business community of Kenya from the convenience of your desktop.

Last, but not least, add your company to the Advertising Section of the Africa Business Pages. The Advertising Section will carry a full page editorial about your company as well as two pictures of your company's products. In addition to this, your company will also be provided with a direct link in the Business Links section. By promoting your company on the Africa Business Pages you can reap rich dividends. An absolute essential for those targetting the African market. Space is limited, so book your advertisement on the Africa Business Pages by clicking here. Browse through some samples before taking a decision.

Useful Contacts
SOME COMPUTER COMPANIES IN DUBAI