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Slide of the month (SOTM) March. Kenyan mobile money transfers

Mobile money has become the most important money transfer system in Kenya by far, in contrast to the European continent where people mostly stay suspicious to such paying systems. africon GmbH with its long-term experience in the payment sector did a research for a leading manufacturer of chip for payment cards. In this context, the Kenyan market of banking and credit cards has been analysed and an important data base including information from more than 50 expert interviews in Nigeria and Kenya with banks, personalization bureaus, distributors and other key organisations was constituted. Thanks to this extensive research, africon can resume that the Kenyan banking market is saturated. Investments into this sector can hardly be profitable besides banks and telcos who still buy payment cards. The Nigerian market currently shows a strong margin drop for payment chips and new technologies are being explored by banks and payment providers. Nevertheless, the dynamic development of mobile money is an important opportunity for the IT sector and internet security companies.

 

 

Slide of the month (SOTM) February – Segmentation of the Nigerian sanitary market


The slide of the month January showed that Western Africa is a very active region for hotel development. The rise of the construction sector also drives the need of interior design and sanitary products. Two third of the total Nigerian turnover in sanitary products come from retail business. Only one third of the products are sold in construction projects such as hotels or office buildings. Whereas, when it comes to high-end class, the ratio changes and project business dominates the selling of sanitary and interior decor. Key to success in Nigeria is the identification of key players.

The segmentation of the Nigerian market illustrated by the sanitary sector is typical for Africa. Small distributors and unofficial markets dominate. Still, africon sees an opportunity for large contracts in high-end projects. A successful market entry must cover the whole distribution chain.

 

Slide of the month (SOTM) January. Development of hotels in Africa


Some African countries are known for its dynamic tourism such as Kenya and Tanzania, Namibia, Botswana and South Africa. Idyllic pictures of Safari-tourists can be drawn out of this imagination. However, the hotel industry that is also linked to business travelling is the most prospering in Western Africa. The first slide of the month in 2017 indicates that 45% of the African new hotel rooms were built in Western Africa. Also, in Nigeria more than 10.000 hotel rooms were planned in 2016, that is more than in any other African country. Angola and Kenya also show an interesting number of 3.000 to 8.000 rooms planned in 2016.

Thus, africon sees interesting potentials in the construction and interior furnishing sector. German companies can profit from the African construction boom as much in providing services as in selling sanitary equipment, furniture and floor covering.

 

Slide of the month (SOTM) December. Tractor brands in Nigeria


The slide of the month December illustrates the market shares of different tractor brands in Nigeria which was researched in a large filter project over the past 6 months. The market leader is New Holland with about 20% of the present tractors in the country, followed by John Deere and Mahindra. Different Chinese products also take a big part of 20% on the market and are partly locally produced within a SKD production. As africon GmbH we believe that the market in Nigeria will continue to grow strongly as various initiative programs by the government will drive local production and imports.

africon conducts largest IAM automotive study on the Nigerian market

africon conducted a major Nigeria research project for a German supplier of IAM automotive engine parts. The study – one of the most in-depth africon studies in Nigeria so far – evaluated the entire value chain of the automotive industry, the diesel generator business, the market for agricultural machinery as well as construction machinery in the country.

All areas suffer from a share of around 60-70% of fake parts in the aftermarket. Nevertheless, the numbers are huge: driven by mainly 12.5m motor vehicles and 400,000 diesel generators, the engine spare parts market in Nigeria is an industry of several hundred million dollars.

Slide of the month (SOTM) September. Construction machinery imports to Nigeria

The slide of the month September, which was created during a large IAM automotive and off-highway project, shows a drastic decrease of construction machinery imports to Nigeria since 2014. Close to the last presented slide about vehicle inflow to Nigeria, statistics show an important downwards trend of the automotive sector in general. The number of imports of construction machinery decreased by 65% between 2013 and 2015. A positive change is not foreseen for the ongoing year.

However, africon predicts a large market for spare parts in construction soon, before new sales will rise in 2018. Investors might find interesting potentials in this area while detailed analysis of the formal and informal markets as much as insights into local dynamics are recommended.

 

Slide of the month (SOTM) August. Vehicle inflows Nigeria

 

2016_09_19_slide-of-the-month_august

With the upcoming interest in Nigeria of various OEM and after market companies, africon GmbH did a comprehensive study on the Nigerian automotive market with focus on OEM production but also on the local spare parts markets.

One of the key findings has been that the vehicle inflows to Nigeria have dropped significantly due to lack of FOREX but also due to implemented taxes for vehicles. Our recommendation for aftermarket companies:

1. Evaluate the informal markets in Nigeria very closely as “official” companies are hardly present
2. Find a way of taking influence directly in the market by contacts to local players
3. Educate the market on the benefit of buying genuine parts as fakes are dominant in Nigeria

For more information please do not hesitate to contact us on info@africon.de.

 

Expo Real contracts africon GmbH to explore real estate opportunities in Nigeria

The large real estate fair by Messe Munich called “Expo Real” has contracted africon GmbH in exploring opportunities in the Nigerian real estate sector. africon was tasked with gathering contacts in the real estate market, provide market intelligence on the real estate market and organize a business trip for the fair director Ms. Boymanns meeting key personnel of large real estate companies, banks and developing companies. For the second time, Expo Real has given special focus to Sub Saharan Africa with the real estate sector showing great potential.

 

Expo Real with almost 40.000 participants will be able to bring together stakeholders in the property and real estate sector to discuss the latest trends and access first-hand information on the industry. Nigerian companies participating in the expo, stand to gain from meeting international investors and bringing in more international capital into Nigeria’s booming real estate sector.

 

Expor Real Erik Expo Real Nigeria

Slide of the month (SOTM) July. Payment cards in Nigeria

 

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The slide of the month July shows continuous growth of more than 20% in payment cards for Nigeria. At the moment the total market has got about 42 million cards according to various sources. The major share of payment cards in Nigeria are debit cards with almost 98%. Credit cards have not been popular in the market. Verve, a national payment scheme still holds the strongest position however with sincere competition from Mastercard. The bank with the most cards in the market is First Bank, followed by UBA and Ecobank.

At the moment the following trends can be observed:

  1. Strong marketing activities to push China Union Products to come by end of 2016
  2. Mobile solutions on the rise with payment cards being a commodity product
  3. Growth in agent networks resulting in the need for more solutions

Over the past 2 years africon has developed a strong understanding of the Nigerian payment cards market and would be happy to answer all questions on info@africon.de.

Spectaris tasks africon GmbH for Nigeria, West- and East Africa

The industry association Spectaris contracted africon GmbH in 2015 to analyse the Nigerian market potential for German companies in the area of laboratory and analytical equipment.

Focus of the joint Nigeria study was the analysis of market sizes for the various product areas, the identification and evaluation of promising target market segments, as well as the explanation of macroeconomic developments. Best practice examples of German companies operating in Nigeria display the present potentials, valuable insights from local industry players are a key element of the study.

With a total market size of around $80m and rapid growth in various sectors, Nigeria is the 2nd largest market in Sub Sahara Africa after South Africa for companies supplying laboratory equipment. Even though low quality standards are a common challenge in the industry, more conscious segments are emerging, driving demand for German high quality products.

The decision for the study was a result of an increasing interest of the German high tech industry on the African growth markets. Especially in the area of medical devices, but also across many other sectors, some African markets are experiencing rapid growth, opening up opportunities for German and international companies.

In continuation of the joint exploration of the African markets, Spectaris and africon furthermore conducted a joint work shop for its member’s companies on the opportunities in East- and West Africa in June 2016. Outside West Africa, East Africa boasts strong potentials, e.g. for medical devices with major public and private projects in the Kenyan health care sector, oil discoveries in the region will attract investments in laboratories. Successful regional integration initiatives as well as strong economic growth further enhance business potentials.

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