Posts Tagged ‘trade’

It’s way past the time to consider the Informal Economy as a distinct commercial environment

Brand stickers on avocados displayed for sale on a highway, Kenya. April 2013

Regardless of continent, it is now high time we accepted the informal economy (unformal or unrecognised or unorganized sectors) as a commercial operating environment in its own right.

The continued oversight is rapidly coalescing into a gaping void of hiccups and failures, by large companies, non profit institutions, and startups, alike. This issue goes far beyond “understanding the informal” or recognizing the fulltime professional status of the service providers that I’ve written about before.

It’s about the problems created by continuing to assume every individual is poverty stricken and struggling to make a livelihood simply because a significant portion of their commercial activity operates outside what is rarely defined but is assumed to be the formal, structured economy held up as the pinnacle of economic development.

It’s why academics can barely conceal their flabbergasted surprise that a person has a better quality of life, and a reasonably viable revenue stream in [gasp] informal market trading, or even agricultural work.

It’s why @pesa_africa questions the continued transplantation of e-commerce business models directly from Seattle to subSahara given that they’ve tended to wither on the vines.

It’s why market women and traders pay the price of daily harassment and abuse by those given authority over their peace of mind.

And, it’s also why the freshest produce gets to you first thing in the morning in Nairobi or Cotonou or Kinshasa.

This is not meant to be a paean to the hardworking women and men who keep the engines of commerce and trade humming in the harshest of environments with scarce resources and inadequate infrastructure.

It’s the first step in acknowledging yet another holdover from a colonial past that decades later still hampers and hinders the social and economic development that should have happened by now, by all rights.

It’s also the necessary counterpart to the recognition of agency required for design interventions to succeed once donor funding ends.

This theme is consistently covered in this blog in the category Biashara Economics and hashtag #biasharaeconomics

Launching Our Digital Documentation Project: Ibadan’s Tailors, Traders, and Textiles by Nigerian/British artist Folake Shoga

finalcopyAfter months of hard work, I am very honoured and proud to announced our new digital documentation project by my friend Folake Shoga, a Nigerian/British multidisciplinary artist with more than three decades of experience.

She went on a journey of discovery through the twists and turns of the informal value web that holds together West Africa’s famed textiles and fashionably styled culture.

Her window to this world is centered around Ibadan, Nigeria, and she takes us through an illustrated, personally narrated documentary that spans the experience of getting a new dress, from choosing the right fabric, all the way through building a fashion brand.

Come and join us for this fascinating peek behind the scenes! You can also find this unique photo-documentary again on my portfolio page.

Le commerce direct des produits fabriqués en Chine est-il susceptible de perturber le marché des consommateurs africains?

This article has been translated into the French by Yacine Bio-Tchané

La première plateforme d’e-commerce spécialisée dans la vente directe des produits fabriqués en Chine vient d’être lancée au Togo, un pays de l’Afrique de l’Ouest. Coincé tout comme la République du Bénin entre deux grands pays davantage connus, le Nigeria et le Ghana,le Togo est un petit pays francophone d’environ 7 millions d’habitants.

frenchComme l’énonce l’article :
« Nous voulons être les pionniers du commerce électronique au Togo et tirer parti de la forte coopération multiforme entre la Chine et le Togo, le premier pays carrefour commercial en Afrique de l’Ouest “, a déclaré Yuan Li, fondateur de JMSA-MALL, à Xinhua vendredi dernier à Lomé.
«Nous faisons la promotion d’échanges commerciaux directs, entre les clients africains et les commerçants chinois, de produits authentiques chinois à des prix intéressants “, a-t-il expliqué.

Des appareils électroniques jusqu’aux machines agricoles, la plate-forme offre une large gamme de produits chinois, qui sont vendus au Togo, ainsi que dans plusieurs autres pays de la sous-région tels que le Bénin, le Niger, le Ghana et le Burkina Faso.

Toutes les principales cartes de crédit sont acceptées comme mode de paiement ainsi que le système de paiement local via mobile money – Flooz (Moov). Il y a une politique de garantie avantageuse, et les articles sont entreposés à leur arrivée dans un bâtiment local pour les livraisons, au cas où l’article commandé n’est pas déjà disponible en stock dans leur entrepôt local. En outre, JMSA-MALL offre aux PME locales l’occasion de vendre leurs marchandises à travers leur plateforme. En apparence, cela semble bien – en supprimant les intermédiaires, ils peuvent offrir des meilleurs prix.

Yacine Bio-Tchané, notre collègue béninoise a aussi ses marques à Lomé. Ensemble, nous avons discuté de l’impact potentiel de ce lancement dans le contexte local, ainsi que des implications plus larges. Voici quelques réflexions:

Est-ce que cette plate-forme de vente « directe au consommateur» a un impact sur les commerçants locaux qui se rendent en Chine pour se procurer leurs produits?

Yacine a fait observer qu’à partir du moment où la plate-forme vend tout, des appareils électroniques aux machines agricoles, si certains éléments coûteux et lourds ne sont pas facilement disponibles au Togo, mais pour lesquels il existe une demande,ils peuvent être achetés en ligne et les utilisateurs pourront profiter de cette occasion. Aller à la Chine, identifier le bon produit au bon prix et l’expédier au Togo est long et coûteux (1). La plate-forme e-commerce réduit considérablement les coûts de transaction, ce qui la rend très attractive pour les acheteurs locaux.

Les produits chinois sont connus pour être moins cher (en prix et parfois en qualité) que les autres produits de sorte qu’ils sont très compétitifs et accessibles à de nombreux Togolais, surtout compte tenu du faible pouvoir d’achat. Si, au lieu d’aller au marché et de se promener à la recherche de ces produits, tout le monde pouvait acheter en ligne, les gens préfèreraient le faire. Cependant, alors que le Togo a 67% de pénétration des téléphones mobiles, moins de 10% de la population a accès à l’internet. Cela implique que la solution de commerce électronique est accessible à peu de personnes, mais cela pourrait déclencher une utilisation accrue de l’Internet par les commerçants.

Bien que l’article ne dise pas quels sont les principaux acheteurs (nationalité), il dit qu’ils couvrent plusieurs pays. Il ne serait pas surprenant de voir que la demande soit plus orientéevers le Ghana par exemple.

Le commerce direct de la Chine crée des marchandises

D’autre part, étant donné les coûts, le temps et les tracas pour aller en Chine à la source et expédier des produits à vendre au pays, cette plate-forme pourrait être attrayante pour les commerçants locaux eux-mêmes, à la fois au Togo, et au niveau régional. Comme le fait remarquer Yacine, la demande pourrait ne pas émaner du Togo même mais plutôt des pays voisins. Selon le fondateur de la plate-forme, le Togo est une plaque tournante du commerce en Afrique de l’Ouest pour la Chine.

La Chine a accru le commerce et les relations diplomatiques avec le Togo au cours de la dernière décennie. Il est même dit que la Chine est devenue le premier partenaire financier du pays. Les entreprises chinoises opèrent dans les industries, l’agriculture, le commerce et la construction. Ils créent de l’emploi et sont en concurrence avec des entreprises locales dans la vente de certains produits tels que les tissus.

Le fait que cette plateforme d’e-commerce soit tournée vers les consommateurs et qu’elle soit soutenue par un entrepôt local rempli de marchandises produits par la Chine est symbolique. Pour Yacine, le message le plus fort que la plateforme envoie est que les Chinois sont entièrement installés au Togo. Ce genre d’investissement à long terme, associé à leurs investissements accrus dans les industries, est déterminant. La Chine n’est plus un simple partenaire qui vient pour des projets périodiques, maintenant c’est un acteur important qui influe sur le comportement des consommateurs. Elle est sa propre image de marque, avec le lancement de ce consommateur face à la boutique en ligne.

Géographiquement, le Togo est bien placé pour toucher facilement l’Afrique de l’Ouest anglophone et francophone. L’e-commerce est déjà en train de décoller de façon exponentielle sur le marché géant du Nigeria, mais il en est encore à gagner du terrain dans les autres pays voisins. La Côte-d’Ivoire a quelques acquis, mais elle est encore à ces premiers jours. Traditionnellement, les Chinois ont attendu que les marchés soient à maturité avant de les inonder avec leurs prix plus bas – le marché du téléphone mobile illustre cela.
Ce lancement de la plateforme semble précoce pour les perspectives de l’e-commerce (de même que les paiements mobiles), mais pas du point de vue des tendances du marché et du commerce mondial.

Les industries manufacturières de la Chine ressentent les effets rétrécissement du marché mondial, et les problèmes de surcapacité. Le marché intérieur a toujours l’axe majeur de leur développement, ceci semble êtreleur première tentative sur un autre marché. Le commerce informel entre l’Afrique et la Chine n’a pas entièrement été sous le radar –les compagnies aériennes africaines et chinoises ont été les premières à répondre à la demande. En outre, il y a d’autres changements en cours de réalisation qui impacteront directementl’Afrique de l’Ouest, comme cerécentarticle de CNN le montre:

Au cours des 18 derniers mois, bien que des chiffres concrets soient difficiles à trouver, des centaines – peut-être même des milliers – d’Africains sont soupçonnés par les habitants et les chercheurs d’avoir quitté Guangzhou.

La dépréciation du dollar dans les pays d’Afrique occidentale dépendante du pétrole, associée à la politique d’immigration hostile de la Chine, le racisme généralisé, ainsi que le ralentissement et l’échéance économie, indique que Guangzhou perd son avantage concurrentiel. […] Alors que la Chine devient moins rentable, de nombreux Africains ressentent avec plus d’acuité les aspects négatifs de la vie la bas.

Si la montagne ne peut pas soutenir Mahomet, pourrait-elle au moins réduire les coûts en construisant des entrepôts appuyés par des marchés en ligne? Les centres d’entreposage de marchandises chinoises ne sont pas inédits sur le continent africain, l’Afrique australe dispose déjà d’un certain nombre, tandis qu’il a été dévoilé que la Chine finance la plate-forme logistique de la Tanzanie. Comme l’a déclaré le fondateur de JMALL, cette “plaque tournante du commerce qu’est le Togo semble être un nouveau pays partenaire. Est-ce que la plateforme d’e-commerce est un projet pilote pour tester efficacementle coût régional du marketing B2C?

Les géants du e-commerce Chinois comme Alibaba ont montré la voie avec les efforts de leur agent pour ouvrir les marchés ruraux difficiles de l’arrière-continent. C’est seulement une question de temps avant qu’un autre type d’intermédiaires n’apparaisse au Togo (et ailleurs) et offre des services similaires pour faciliter le commerce. Cette fois, cependant, ce sera depuis le confort de leur pays d’origine, car ils assistent les commerçants et les consommateurs avec les achats en ligne. Pris ensemble avec des investissements continus dans les systèmes de paiement via mobile money, les initiatives d’inclusion financière et l’utilisation du modèle d’agence – la Chine semble avoir saisi un excellent espace d’opportunité à explorer.

 

(1) Voici un documentaire qui suit un commerçant congolais pendant son shopping à Guangzhou, en Chine, cherche à remplir son conteneur avec des marchandises exportables. Il donne une assez bonne idée de l’expérience client.

Will Cross Border Mobile Money Boost intra African Trade and Regional Integration?

cross border MMTOver the past 18 months, since I started tracking the spread of cross border mobile money payments across the African continent, there has been visible progress in leaps and bounds, as documented by the GSMA. In fact, back then, I’d written:

Top down reportage on banking and interoperability seems to focus only on the customer’s individual needs, and overlooks their agency as entrepreneurs, traders and business people.

The map above has been taken from the GSMA’s Mobile Economy 2015 report, and the 2016 report reproduces it as well. Now, the role of mobile money transfers in facilitating cross border and intra African trade is finally being recognized for its potential and cost savings. Author Ashly Hope lays out clearly the high cost of remitting money in the SADC region:

cost of remittance sadcSouth Africa and Tanzania are the largest sources of remittance, yet their transaction costs are significantly higher than the Sub Saharan average of 9.7% (which in turn is the most expensive region in the world where the average cost is now ~7.4%). And this is only one regional grouping.

It is when we look at the penetration of mobile money, that we see something that hints at the digital economy emerging in East Africa (birthplace of Mpesa in case you weren’t aware).

Given teh pace of change, we can safely assume that the figures given above have only increased since 2014. Tanzania’s mobile money market has been frequently cited for its growth and opportunity – it is also outstanding for the level of interoperability within the telco ecosystem.

In the previous article, we noted that Tanzania had just flagged off a Chinese funded regional logistics and trade hub which would include a local footprint for the distribution and sales of China made goods in the form of a warehouse.

“The trade hub will also help Tanzanians especially women to buy products here instead of travelling all the way to China, hence cutting costs down,” said Ms Janet Mbene, Deputy Minister of Industries & Trade.

Savings on travel and shipping is bound to translate into increased inventory purchases, and thus value and/or volume of goods traded. Taking the context of the entire East African Community’s “informal” cross border trade, and the visualization of the interconnections now provided by various mobile money transfer systems in the map above, one can safely start to forecast the potential gains to both traders, and the telcos, as the landscape of the local operating environment begins to change in response to infrastructure investments.

Whether this potential opportunity is exploited by the region’s traders, or overlooked and missed due to the existing digital divide, is the question that remains to be answered. The EAC’s mobile economy (~96% prepaid) needs to start thinking of itself as more than just telco led and impact hub driven, and get down to the ground at the fringes for the future.

Will Direct Access to China-made Goods Disrupt Trade in West Africa’s Consumer Market?

jmsamallThe first e-commerce platform for direct trade of China made products has just been launched in the West African country of Togo. Squeezed together with the Benin Republic between the larger, and better known countries of Nigeria and Ghana, Togo is a small francophone country of around 7 million people. Per the article:

“We want to be the pioneer of e-commerce in Togo and to capitalize on the strong multifaceted cooperation between China and Togo, a premier trade hub country in West Africa”, Yuan Li, founder of JMSA-MALL, told Xinhua Friday in Lomé.

“We are promoting a direct trade of genuine Chinese products with fair price between the African customers and the sellers in China,” he explained.

From electronic devices to farm machines, the platform offers a wide range of Chinese products, which are sold in Togo as well as other countries like Benin, Niger, Ghana and Burkina Faso in the region.

All major credit cards are accepted for payment as well as the local mobile money payment system – Flooz. There’s a generous return policy, and shipments arrive at a local brick and mortar shopfront for pickup and returns. That is, if the item ordered isn’t already available in stock at their local warehouse. Furthermore, JMSA-MALL offers local SMEs an opportunity to sell their wares through their platform. On the surface, this looks good – by cutting out the middleman, they can offer lower prices.

Yacine Bio-Tchane, our Beninois colleague also has a footprint in Lome, Togo. She and I discussed the potential impact of this launch in the local context, as well the broader implications in general. Here are some thoughts:

Will this ‘Direct to Consumer’ (DTC) platform have impact on local traders who travel to China for goods?

Yacine made the observation that since the platform sells everything from electronic devices to farm machines, if some pricey and heavy items are not readily available in Togo but for which there is a demand can be bought online, users will take advantage of that opportunity. Going to China, identifying the right product at a good price and shipping it back to Togo is timely and costly (1). The e-commerce platform significantly reduces transaction costs, which makes it very interesting for local buyers.

Chinese products are known to be cheaper (in price and sometimes quality) than other products so they are highly competitive and accessible to many Togolese, especially given the low purchasing power. If, instead of going to the market and walking around in search of those products, anyone can buy it online, people will prefer doing so. However, while Togo has 67% penetration of mobile phones, less than 10% of the population has access to internet. This implies that few consumers have access to the ecommerce solution but it could trigger an increased use of internet from traders interested in China made goods. Although the article doesn’t say who the top buyers are (nationality), it would not be surprising to see that increase in demand is being pulled by Ghana.

Direct trade of China made goods

On the other hand, given the costs, time, and hassles of going to China to source and ship products back home for sale, this platform might be attractive to local traders themselves, both in Togo, and regionally. As Yacine observes, demand might not be from Togo itself but rather the neighbouring countries. As the founder of the platform says himself, Togo is a critical trade hub in West Africa for China.

China has increased trade and diplomatic relations with Togo in the past decade. It is even said that China has become the first financial partner to the country. Chinese companies operate in industries, agriculture, commerce and construction. They create employment and compete with local companies in selling certain products such as fabrics.

The fact that this e-commerce platform is a B2C marketplace backed by a local warehouse full of China made goods is a signal of this investment. For Yacine, the strongest message the launch of this platform has sent is that the Chinese are fully settled in Togo. That kind of long term investment, coupled with their increased investments in industries is a game changer. China is no more a simple partner coming in for projects but has now become an important actor with influence on consumer behaviour. This is a big pivot in its brand.

west_africa_2_storyGeographically, Togo is well positioned to easily access both anglophone and francophone West Africa. E-commerce has been taking off exponentially in the giant market of Nigeria, but has yet to gain traction in other neighbouring countries. Ivory Coast has seen some gains, but it’s in an early stage. Traditionally, the Chinese have waited for markets to mature before flooding it with their lower priced variations – the mobile phone market is one such example. The launch of this platfrom seems rather early from the e-commerce (and mobile payments) perspective but not from the point of view of global trade and market forces.

China’s manufacturing industries are feeling the pinch of shrinking global trade, and the problems of over capacity. The domestic market has been one major focus for development; this initiative seems like an attempt at creating another. Consumer goods trade between Africa and China has not entirely been under the radar – both African and Chinese airlines were the first to respond to demand. Further, there are other changes afoot that directly impact West Africa, as this recent article from CNN shows:

Over the past 18 months, although concrete numbers are hard to come by, hundreds — perhaps even thousands — of Africans are believed by locals and researchers to have exited Guangzhou.

A dollar drought in oil-dependent West African nations, coupled with China’s hostile immigration policies, widespread racism, and at-once slowing and maturing economy, means Guangzhou is losing its competitive edge. […] As China becomes less profitable, many Africans feel the downsides of living there more acutely.

If the mountain cannot support Mahomet, could it cut costs by building warehouses fronted by online marketplaces? Warehouse centres for China made goods are not new to the African continent, southern Africa has quite a few, while Tanzania’s China funded logistics hub has just been flagged off. The JMALL founder’s opening statement positions Togo as another such ‘trade hub’ in West Africa. Is this e-commerce platform a pilot to test regional B2C marketing cost effectively?

Chinese e-commerce giants like Alibaba have shown the way with their agent led efforts to open up the challenging rural markets of the mainland’s hinterlands. It’s only a matter of time before a different kind of intermediary springs up in Togo (and elsewhere) offering similar agent services to facilitate trade. This time, however, it’ll be from the comfort of their home countries, as they assist traders and consumers with online purchases. Taken together with ongoing investments in mobile money payment systems, financial inclusion initiatives, and the utilization of the agency model – China seems to have grasped an excellent opportunity space to begin exploring.

 

(1) Here’s a documentary following a Congolese trader during her shopping spree in Guangzhou, China, looking to fill her container with tradeable goods. It offers us insight on her customer experience.

This article has been translated into the French by Yacine Bio-Tchané

Emerging African women entrepreneurs #informaleconomy

ruth

Ruth, the retailer who dreams of wholesale. Western Kenya Feb 2016 Photo: Niti Bhan

At the other end of the high tech geeky startup spectrum increasingly providing a platform for African women is the informal retail and wholesale trade sector. Like their West African sisters, the women traders I met in the border market of Busia, Kenya (next door to Busia, Uganda) and its nearby environs (~ 5km radius), and at Malaba, Kenya (also next door to Malaba, Uganda) are professional businesswomen, some with ties as far away as Egypt and Kampala.

They break the stereotype of the poor African woman who sells tomatoes as a livelihood activity to feed her 4 kids and send them to school. One company has a B2C outlet in Mombasa, while they sit in between Kampala and Nairobi, trading in women’s accessories and various accoutrements that are fun to own. Another imports clothes from Egypt, while also wholesaling eggs from Uganda. And ladies who are in the wholesale of staple agricultural commodities, documented evidence of which only began in the 2000s.

UNWomen would have it that the majority fall into the conventional description that doesn’t question its implicit assumption that operating in the informal sector automagically means you’re in the lower income category. Besides, the concept of “informality” in the English language causes more misconceptions around the sector as it exists in East Africa.

I’ll be honest, I cannot actually say without a proper market research study, at scale, whether the exceptions are the majority or minority. To be honest, as I noted in the previous post, it costs almost as much money to run an informal business as it would a formal. This whole topic of what is formal and informal is an entirely different, far more academic post. Income level does not really enter into the picture as a defining characteristic.

These are businesswomen with bank accounts and book keeping. They are invisible because their business can be conducted from indoors, by phone and mobile money transfer.

Trade in East Africa – A very short introduction to a very long history

800px-Indo-Roman_tradeWho were the pioneers who opened up the trade routes that criss cross the seas and deep into the interior from the ancient ports of Zanzibar and Mombasa? We don’t know who these intrepid sailors must have been, making their profit from rich Roman’s wives seeking Indian silks and spices, but the African continent’s eastern shores were known to traders at the very beginning of the Common Era (CE).

Azania is the name that has been applied to various parts of southeastern tropical Africa. In the Roman period and perhaps earlier, the toponym referred to a portion of the Southeast African coast extending from Kenya, to perhaps as far south as Tanzania. Azania was known to the Chinese as Zésàn (澤散) by the 3rd century. Even China’s most famous explorer, Zheng He only reached Malindi a few decades before Da Gama’s voyage in 1497.

IndianOceanMaritimeRoutesEast African coastal cities participated in a larger Afro-Asian trade network a thousand years before Vasco Da Gama peeked around the Cape of Good Hope to find the way to sail to India. Gujarati traders were already criss-crossing the ocean for biashara with the Swahili Coast of Eastern Africa. As far back as the 3rd c. CE, the banana, domesticated in India, came to Madagascar (and thence to the African continent) as part of the broad Afro-Asian/Indian Ocean trading community.(1) By the 13th Century, Africa was well integrated in the global trading pattern.

indianoceanroutesTrade flourished in the Indian Ocean as East Africa, India, Southeast Asia, China, the Spice Islands participated in a thriving commercial network that encompassed both overland and maritime routes. Asian and Arab sailors mastered the monsoon wind patterns of the Indian Ocean to capitalize on commercial opportunities.

History has finally found a name for one them, present at the dawn of the age of colonization – Kanji Malam – the merchant sailor from the ancient port of Mandvi on the coast of the Indian state of Gujarat who showed Da Gama how to cross the ocean to India from Malindi on the Kenyan coast. These hazy but deep links of trading history are captured here by the Friends of Mombasa.

00a7d3c793fbbd2e9f45e28b18dffb02East Africa was part and parcel of the trade and served as “cross cultural agents” in the global commercial networks of that era. The Swahili Coast is the best known of these multicultural trading societies.

The Coast of East Africa has had a long history of trade, involving constant exchanges of ideas, style and commodities for well over two thousand years. Marriage between women of Africa and men of the East created and cemented a rich Swahili culture, fusing urban and agricultural communities, rich in architecture, textiles, and food, as well as purchasing power.(2)

zanzibar map coast

Further inland, the Kamba, of what is now Kenya, and the Nyamwezi of erstwhile Tangayika, formed the trader’s networks that linked the ports of the Swahili Coast to the wealth of the heart of Africa.(Roberts, 1970; Cummings, 1975)  Copper from Katanga vied with ivory and gold to pay for the textiles and metals. Caravan routes laid down in centuries past are reflected in the roads and rails of today.

The pioneers of all the major routes were African traders. Nyamwezi caravans from central Tanzania, reaching the coast about 1800, developed the most important route from their homeland to Bagamoyo on the mainland directly opposite Zanzibar. Kamba ivory traders from central Kenya opened a route that ended at Mombasa. Eventually, this route crossed Kamba and Maasai country, branching east towards Uganda and north to Lake Turkana. The oldest route stretched from Yao country to Kilwa. (3)

With the Global North’s industrialization of the slave trade and colonization came the top down administration of the formal economy, as the need for manual labour spelt the beginning of the end of these ancient caravans of trade.

You may also enjoy The African Diaspora in the Indian Ocean World.

China’s revival of ancient trading ties along the historic Silk Road

The South China Morning Post has a great infographic on a favourite topic of mine – the Great Silk Road.

backpage-infographic-0725

Some related posts:

On the new Silk Route – Experiencing Africa’s informal trading network with China
The African Diaspora in the Indian Ocean World

Informal trade is big business in Africa

On my way to Nairobi  from Singapore a couple of years ago, I had the opportunity to observe first hand the phenomenon of informal trade between China and the African continent. The energy and excitement of the traders, laden with goods on their way back, was a palpable part of the inflight experience. Today, I came across this bit of news showing that the airline recognizes the sizeable opportunity available in successfully serving this rapidly growing economic activity.

A Kenya Airways ticketing office at Tea Room area near the intersection of Accra and River roads has sent a signal of the growing significance of the informal economy to big companies seeking to grow their top line.

The Tea Room area is a hotbed of informal traders, who import vehicle spare parts, stationery, mobile phones and accessories, building materials and computers, among other goods.

The traders frequent favourite import destinations such as China, Dubai and Turkey, which offer relatively cheaper goods.

“Tea Room is a prime location, accessible and a central point for a large number of small-scale entrepreneurs in town. This shop will therefore offer opportunities to traders for direct interaction with our staff and this will enable provision of tailor-made services to this market segment,” said Kenya Airways managing director Mbuvi Ngunze in a statement. ~ Business Daily, 11th Jan 2015

This recognition of the important role played by the so called informal market for consumer facing businesses is one that will become increasingly visible. And, I suspect, its an overlooked opportunity for local brands to gain market share and first mover advantage. Here’s a complementary snippet from an entirely different industry:

To win his first mobile network operator licence, Zimbabwean telecoms tycoon Strive Masiyiwa based his projections not on “World Bank numbers” but by studying the informal sector.
[…]
Masiyiwa explained Mascom came to its numbers by recognising the strength of the informal economy and understanding the local market. “I understood the informal sector was real.”

He suggested that even knowing the number of cattle in Botswana can offer insight into spending power. “Cows represent wealth in Botswana.”

Like Masiyiwa, we’ve been able to identify indicators to assess size and value of a particular industry or segment, though it may be undocumented and considered informal.  Some are common across regions, like wealth in the form of the cow, while some need to be identified and validated for the task at hand.

Regardless, the fact remains that the true size of the opportunities still remain undiscovered.

Uncle Cooks with dal from Malawi in your desi kitchen

Indian brand Uncle Cook’s Malawi Toor Dal sold in Singapore

My mother lives in Singapore and prefers to do her monthly shopping at the well known megamall Mustafa’s – frequented by South Asians from every region plus anyone looking for anything, all of which is available under one humongous roof.

This packet of toor dal, also known as arhar dal, is one of the staples of any self respecting Indian housewife’s kitchen. I would have normally walked by it without a second thought if it had not been for the “Product of Malawi” stamped across the bottom and the bright purple flag “Malawi Toor Dal”.

Wait…what?

Since Google’s search is broken, all I was able to dig up after much verbatim was this report from 2012 on commodity imports:

India, biggest producer, consumer and importer of pulses, is likely to see 20% rise in pulse imports from East African countries like Tanzania, Malawi and Kenya in 2012.
In 2011, India imported around 350,000 tons of pulses from East African countries.
Meanwhile, India’s total pulses import is likely increase by 2.75-2.80 million ton, showing an increase of 7.7%. Africa is one of the largest supplier of tur (toor) to India. During 2011, the country imported around 190,000 tons of tur.

Armed with the alternate spelling of the transliterated word from the Devanagari, I discover that:

The leading producer is India producing about 85 % of the world’s total produce…. but it is not into the exports of tur at all, as the domestic consumption demand in the country is quite high and Myanmar, the neighboring country to India leads the tur exporting countries’ list. The major importing countries that import tur or pigeon pea are

Myanmar

Republic of Tanzania

Kenya

Malawi

Uganda

Mozambique

The pigeon pea importing list is topped by India and the European Union.

And in case like me you simply want to know more:

Pigeon pea originated in Asian continent particularly it is said that to be a native to India in as long as 3000 years ago. From India, it was taken to the eastern African region approximately a thousand years ago. Then it was called ‘Gandoles’ and was cultivated in Egypt according to the remnants found in the tombs of Egypt.

When Columbus discovered the new world or America, the African or the black people were taken there as slaves. Pigeon peas traveled to the new world with the slaves. This was the time when this crop started gaining popularity and cultivation of pigeon pea, on a wider level, got started. Tur has maintained its reputation since then and even now it is being widely demanded.

Who would have known there was such a fascinating story of civilization, agriculture and now, globalization behind the simple dal we eat with our rice or chapati?