Skip to main content.

Trade Guide

HOW CAN 'TECHNOLOGY' HELP ME COMPETE

HOW TO TRADE SUCCESSFULLY IN AFRICAN BUSINESS MARKETS

A GUIDE TO SOUTH AFRICA'S KEY IMPORT AREAS

HOW TO AVOID SCAMS AND FRAUD






































































A VITAL QUESTION FOR BUSINESS TODAY IS, "HOW CAN TECHNOLOGY HELP ME COMPETE?"

From agriculture to industrial products, consumer goods and global commodities, information and communications technologies (ICTs) are hugely important. Organisations can apply them to save costs when they market themselves, conduct market research, organise export processes, and manage payments and maintain customer relations.
 

Recognising the potential of ICTs is one thing; applying them to improve the bottom line is another. Faced with a sometimes puzzling choice of e-business solutions, small business needs to know which applications will boost visibility, improve efficiency or enhance products. They cover a wide range: developing a web site; using business-to-business marketplaces; using mobile phones to manage supply and distribution chains; and more.

Information Technology also opens up new opportunities to goods, minerals, materials and commodities. But unless they’re informed and competent in using IT, firms can’t take advantage of new opportunities.

In developing countries, where Internet connections are often limited or expensive, it can be a major challenge to develop an e-culture and apply “e” productively to trade.

Putting “e” to work for trade doesn’t happen automatically: organisations need to manage the process. They need e-trade strategies that go beyond the issue of connectivity and address business realities like trust, costs and industry structures. This is an area that CapeToCairo strives on a daily basis to address and offer cost effective solutions.

With those foundations in place, CapeToCairo’s platforms can help businesses in Africa and the world, bridge the digital divide and leapfrog growth.

How CapeToCairo Can Help

* CapeToCairo helps demystify the ways IT can be applied to increase sales, exports and awareness, by working with businesses and those who support them. Through carefully selected online and offline strategies and our relationships with our partners, CapeToCairo helps bring the voice of business in Africa into the information society. CapeToCairo is always looking for the latest in technology, governance and business to guide us in promoting growth strategies for our members.

* “E” at CapeToCairo. Traders can increase efficiency and sales with tools such as Webshops for gourmet coffee, online market analysis of key export sectors, e-procurement guides for suppliers, online export readiness tools and more.

CapeToCairo provides information on e-trade opportunities with programmes such as regional e-business forums and will keep producing articles and resources on “e” in our platform, www.CapeToCairo.Biz.

* The Online Business Market for Africa, readily available to the global business community (with a focus on African business), integrates many of the tools above to help create e-competitive businesses and build capacities in the institutions that support them.


Back to top



HOW TO TRADE SUCCESSFULLY IN AFRICAN BUSINESS MARKETS

Want to do successful business with all of Africa from Cape Town to Cairo? Here are some tips to help you do just that...

Finding the right customers in African markets can be a time-consuming and lengthy process. Being such a large continent, with as many as 52 countries, marketing your products and services in African markets is indeed a challenging task. However, for a successful marketing effort, it is important to identify and associate with reliable and efficient business partners in key African countries. There are a number of ways to go about identifying potential trade partners. A good starting point is via an organisation that specialises in marketing and business promotion in the African markets. Such organisations have not only the necessary experience and expertise, but also the right contacts to help you in your marketing efforts. CapeToCairo is such an organisation and that is why can be a beneficial business tool for your business.

However, before you launch yourself into a "search-and-target" operation, here are some pointers that will help you understand the mechanisms of the African markets and help you choose the right business partner for yourself:

MANUFACTURING

Large industrial companies or specialist manufacturers will often purchase their requirements directly from producers. This is especially the case for specific machinery, equipment or for bulk users of raw materials.

Most industrial sectors in African countries are dominated by a few very large, diversified groups, although the current trend towards smaller, more focused groups of operating companies has seen the unbundling of many of these large corporations. These large companies are however very important, not only because of their size and diversity but because they are significant end-users of raw materials and capital inputs.

Each group will have their own procurement systems to deal with imports and raw materials. This could be an in-house import department or the existence of an import company for the group that operates independently to supply the parent company and other customers. In addition to the large groups, there are numerous smaller manufacturing companies who may engage in direct procurement of certain raw materials and machinery.

WHOLESALE

Where there is no specialist importer or distributor for your specific product, you may need to sell directly to a wholesaler who services your market. A wholesaler does not usually have exclusive selling rights.

Wholesalers play a very important role in the distribution system in African markets, particularly in supplying independent retailers and informal operators. Certain larger wholesalers in Africa are also used extensively by retailers in neighbouring countries who will visit the wholesaler on a monthly basis to procure their requirements. For certain products, particularly in the food sector, the major importers also operate as wholesalers. A further feature of the wholesale sector is that the large wholesalers are often owned by one of the major retail groups.

RETAIL

Large retail stores may also buy products directly from an overseas supplier. This is most often the case when there is exclusivity on a line such as a particular range of linen, clothing or kitchenware. Of growing importance in the African market is the existence of house brands that are manufactured specifically for a retailer under their own label. A number of house brands available in many African retail outlets are imported from Asian countries.

A salient feature of the retail sector in Africa is that it operates within a very competitive marketing environment. As a result, a few large groups dominate the retail sector. For example, in South Africa there are four major retail groups that dominate the foodstuff business, accounting for well over half of the formal retail sector.

In addition to the major chains and groups, there are a large number of independent retailers who cater to their own segments of the market. Once a list of potential partners has been identified using trade directories and other inputs, it is then necessary to contact each of the companies to assess their interest in doing business with you. It is advisable to get a specialist organisation to do this on your behalf, as the process can be very time-consuming. It is advisable to mail your company’s corporate brochure along with an indicative price list to your targeted business partners in Africa. An increasing number of companies are also using the internet to make contact with their business counterparts in many African countries. E-Mail marketing is thus emerging as a major tool in the promotion of direct trade.

However, it is worth reiterating the value of an in-market visit to establish contacts with prospective partners. As an exporter, you need to plan a visit to a market for a number of reasons. Initially this is an ideal way to meet potential importers of your product and to discuss conditions for payment and other business modalities. A visit to your targeted market also helps you to get an understanding of the way the market operates, what the market characteristics are, what your competitors are doing and whether or not their product is going to compete in terms of quality and price.

Lastly, since international travel is expensive, you need to plan your visit carefully so that you maximise your time in the market. However, before you finalise any agreement with an agent or distributor for your products in any African country you need to study a few things.

First and foremost, you need to appoint an agent who knows your market well. Most of the business sector in African countries is relatively small and companies have established methods of procurement that differ from one sector to another. One tends to find that there are relatively few agents who serve a particular sector on an exclusive basis, but, because they are well established within the sector, they deal in many other sectors. For instance, a reputed foodstuff importer in Uganda may also be a major importer of automobile spare parts like tyres, batteries and ball bearings.

You also need to consider the aspect of regional distribution. Africa is a large continent with as many as 54 countries. The smaller agents will tend to operate provincially, as they do not have the infrastructure or the wherewithal to support operations in other provinces or countries. If you decide to go this route you may need to appoint an agent in each of the larger cities in order to cover all the major provinces. The larger companies who take on agencies will often have an office in each of the major cities in the region thereby making any agency agreement easier to control.

For certain products and services, countries like Kenya, South Africa, and Ivory Coast are known as trading hubs for their respective regions. You need to consider whether your African agent should handle business in the entire region on your behalf or whether he should concentrate on his country alone.

SOME SUGGESTIONS

Educate yourself about your target country, region or market in every way possible.

Develop a sound business and marketing strategy.

Identify reliable business partners in Africa either by yourself or through CapeToCairo.Biz, networking, Chambers of Commerce or even relevant Embassies.

Visit the location if you intend to establish a company or an outlet.

Follow up on every arrangement to make sure that conditions and terms are fully understood and are being implemented.

Arm yourself with a lot of patience and keep an open mind because communication and correspondence from Africa may not flow as smoothly or as fast as you may expect.

Understand the cultural environment of the African country in which you intend to do business.

Use a consultant, especially those that have a real understanding of Africa. Be mindful of the three Ps of African businesses: Pensiveness, patience, and perseverance. Pensiveness demands the use of common sense. Success demands a lot of patience. Above all, you must persevere and be persistent but polite.

Lucrative as it may be, the African market is not without pitfalls. Keep your guard up and insist on cash transactions as much as possible.

Establish direct contacts with your business counterparts in Africa by participating in trade fairs and exhibitions.

If you have any suggestions about information that could help you trade better, contact us and we will post as much of it as we can.

Back to top


KEY SOUTH AFRICAN IMPORT AREAS

While South Africa produces many products of world-class quality for export, it is also a major importer of diverse products from most countries. From pharmaceuticals to telecommunications, SA is an advanced consumer of the latest on offer from international sources.

Agricultural products
South Africa supplements local agricultural production with imports, key among these being consumer-oriented products, forestry products and intermediate products.

One of the mainstays of the South African economy, the agricultural sector holds many opportunities with both large commercial and emerging farmers in areas such as capital investment, training, equipment and services supply.

Airport retailing
Airports Company South Africa (ACSA) handles about 90% of the country's aviation requirements, operating three international airports (Johannesburg International, Cape Town International and Durban International), seven national airports (Port Elizabeth, East London, George, Kimberly, Upington, Bloemfontein, and Pilanesberg Airport near Sun City).

Encouraged by the potentially lucrative retail and property sectors, ACSA has identified opportunities in airport retailing, and continues to develop both airport infrastructure and peripheral property

Computer software & services
One of the main areas of growth is the demand from small and medium-sized companies for high-end computer systems. This is set to become a major target for IT companies in the near future. The South African government is also expected to be a major purchaser of software.

South Africa imports some 80% of its software from the United States, with the balance from Israel, Germany, the United Kingdom and France.

Pharmaceuticals
More than US$1-billion worth of pharmaceuticals are sold in South Africa annually, and the market is expected to grow substantially.

Dispensing occurs via private channels, dispensing doctors, retail pharmacies, retail chains, private and public institutions, industrial clinics, and private and government hospitals.

Food & beverages
South Africa has always had a well-developed food and beverage industry, partly because of the country's major agricultural activity, and partly because of its relatively sophisticated food requirements.

During the apartheid years the food industry developed mainly to satisfy the domestic market and, as growth was limited by local requirements, a consolidation of the major companies took place.

Since South Africa has become a member of the global market, a number of multinational companies have formed partnerships with local food companies, and new opportunities have opened up.

Franchises
Key sectors for development include: bBuilding, office and home services; automotive products and services; entertainment and leisure; hair, health and beauty; printing and photographic development; and restaurants.

Giftware
South Africa has an expanding consumer base and a growing disposable income, and South African consumers are prepared to pay a higher premium for international brand products.

Railways
Over the last 20 years, thousands of kilometres of South African railways have suffered losses of traffic and now need upgrading, or are out of service due to lack of capital investment and maintenance of existing infrastructure.

The South African government is aware that the railways are critical to the economic and social development of the country, and are committed to addressing the problems. Opportunities lie in state-of-the-art equipment, operations, services and investment.

Security and safety equipment
There is strong growth in private security industry technology, such as CCTV and digital surveillance equipment, sophisticated access control systems (smart card technology), and IT systems.

Many cities have introduced surveillance cameras, and businesses are increasingly updating systems with the latest technology. Home security is another key area.

  • Security Association of South Africa
    Tel: +27 11 828-5314
Telecommunications services
The South African telecoms market is expect to grow by 14% by 2004 as the sector's liberalisation continues. The South African telecommunications market will see a second fixed line national operator compete with incumbent Telkom. The provision of state-owned signal satellite distributor Sentech with an international licence is also in the pipeline. Tourism
Given its significant contribution to the economy, the development of a strong tourism industry is a high priority for the South African government, with many incentives and development schemes under way.

Opportunities exist for companies in hotel furnishing and equipping, but a much broader range of opportunities exist in this thriving sector.

Water & wastewater

The South African government is committed to ensuring that all its citizens have access to a minimum standard of potable water and sanitation. Many South African municipalities are looking to overseas companies to help them address these problems through concessions or management contracts.

There have been early successes, and it is expected that there are many more opportunities for water utilities and contractors to win future business.

Source - Southafrica.info

Back to top


AVOID SCAMS AND FRAUD

Undesirably in every community, where goods and services are being traded, there are always a few people looking to make a quick buck, with never intending to provide anything in return, these people are known as scammers. Unfortunately CapeToCairo is one of these communities. These scammers degrade the community that they prowl in and create an unpleasant environment for everyone. Although every effort is made to stop them, there may be a few that slip through the net. You may think that you are wise enough not to be caught out by these wolves in disguise and maybe you are, but just remember that most of them do this for a living and they are most probably very good at it.

So be on your guard, but also be aware that not every problem you encounter, while trading, is likely to be a scam. In fact in most cases it will just be a misunderstanding between the parties involved. There are a few guide lines that you should follow to reduce the likely hood of a scammer making you their next victim.

You can avoid most scammers by following these rules:

Do not believe the promise of large sums of money for your cooperation - follow this one rule and you will avoid 99% of the scam attempts.

If an "opportunity" appears too good to be true, it probably is - be wary of anyone who makes an offer that rationally too good.

Try to obtain a physical address rather than JUST a post office box and a phone number - call the trader to see if the number is correct and working

CAPETOCAIRO IS NOT INVOLVED IN ANY TRANSACTIONS, and does not handle payments, guarantee transactions, provide escrow services, or offer "buyer protection" or "seller certification"

NEVER GIVE OUT FINANCIAL INFORMATION (bank account number, social security number, eBay/PayPal info, etc.)

AVOID DEALS INVOLVING SHIPPING OR ESCROW SERVICES and know that ONLY A SCAMMER WILL "GUARANTEE" YOUR TRANSACTION.

 

Who should I notify about fraud or scam attempts? 

  • Internet Fraud Complaint Centre ( www.ic3.gov )     
  • Non-emergency number for your local police department    
  • CapeToCairo - +44 845 8337197     
  • FTC toll free hotline: 877-FTC-HELP (+1-877-382-4357)    
  • FTC online complaint form ( www.ftc.gov )    
  • Canadian PhoneBusters hotline: +1-888-495-8501

If you suspect that a listing posted for sale on CapeToCairo may be part of a scam, please email the details to us using the contact form. Be sure to include the URL (or Member Name) in your message.

 

Recognizing scams

Most scams involve one or more of the following:  

  • large sums of money to be invested in your businesss without much knowledge of it
  • large quantities of goods to be ordered without much request for your product details    
  • an offer that sounds too good to be true    
  •     "You must act 'now' or the offer won't be good."    
  •     "You can't afford to miss this 'high-profit, no-risk' offer."    
  • Western Union, eBay's Safe Purchase Program (Does not exist) or a "guarantee"    
  • inability or refusal to meet face-to-face    
  • inability or refusal to communicate by phone 
 

Below are actual scam emails sent to CapeToCairo traders, by fraudsters

Email #1

Name:    Dr.Daniel Mayadi
Email:    dmayadi1@yahoo.com
Subject:    inquiry
Question:    Good day ,

 It is my pleasure to contact you after my satisfactory appraisal and acceptance of your proven track records.
 
 Therefore,I will be very humbled if you will be willing to invest the sum of US$16million in any viable projects that you will recommend  to me in your country either as a shareholder or partnership business,with you as the trustee.The funds are mine  and readily available.

 I will be most grateful if you will get back to me soonest,so that I will provide your person with the details.Please contact me by phone or through my private email address ( danielmayadi@hotmail.com ) for more details .

 Wishing  you and your entire family with the best of health, joy and good fortune.

 My warmest regards.

Dr. Mayadi Daniel

Email #2

Name:    Agnes
Email:    anes_sango@yahoo.com
Subject:    I need your help
Question:    Hello Dear,

FOR YOUR KIND ATTENTION,

Due to my careful search for an honest, reliable and sincere business partner, i got your contact from internet  and i ask if you can be trusted not to break an agreement? Still, it took me time to make up my mind to contact you and to offer you this proposal of mine of which my whole life depends on.

My name is Miss AGNES  SANGO, the daughter of Mr.BEHKI JONAS SANGO of blessed memory from Zimbabwe, During the current crises against the farmers in Zimbabwe from the supports of President Robert Mugabe to claim all the white-owned farms to his party members and his followers, he ordered all white farmers to  surrender all farms to his party members and his followers.My father is One of the most successful multy farmers in our country and because he did not support Mugabe`s ideas, Mugabes supporters invaded his farm and burnt everything in the farm, killing him and made away with a lot of items in my fathers farm.

Before his death, my father had deposited with FINANCE HOUSE IN ASIA the sum of (USD $6.5 MILLION).Six Million Five hundred thousand Dollars. After the death of my father, I decided to move to Republic  of GHANA where i re-located underpolitical asylum as a refugee to seek  for foriegn patner overseas that will assist me to move this money out of THE FINANCIAL HOUSE to your country as i have made up my mind to invest and live in your country.

As an asylum seeker i am not allowed to operate any Bank Account within ACCRA GHANA.I have agreed to offer you 7% of the total sum for your assistance as soon as the money get`s into your account while 5% will be mapped out for any expences that may be incurred in the course of this transaction both local and international.

I want truth and honest to be our watch word in this transaction and please treat this transaction with strictly confidential for the successful out come of it. All I want you to do is to furnish me with your personal phone and fax numbers and also your private e-mail address for easy and urgent communication.

Note that this transaction is 100% Risk free and absolutely confidential.
 
Thanks and God bless you.
Sincerely Yours,
AGNES  SANGO
 

 

If you have any more questions or concerns or would like to alert us of a potential scam please send them to us using the contact form.



Back to top