Africa becomes a “hot spot” for Ningbo enterprises to invest

Speaking of Africa, it always feels a bit mysterious, but for Ningbo businessmen, this is a market that has long been familiar to them. Ningbo Jinsheng Haida Import and Export Co., Ltd. is a Yongcheng company that has been making gold in Africa for more than ten years. Their textile brand CheTex can be seen in every country in Africa. More importantly, the price of CheTex for similar products can be 10% to 15% higher than that of its peers. For the new products developed by this Ningbo company, the gross profit can even reach over 50%.
In fact, Africa has become a “hot spot” for Ningbo enterprises to invest. As of April this year, Ningbo has approved a total of 100 companies to invest in Africa, with a total investment of US$99.04 million. In the first four months of this year, 5 new companies were approved, and the total investment doubled compared with last year.
Forced to enter Africa but unexpectedly ushered in a blue ocean market
“I was forced to set up a company in Africa at that time.” Recalling the original intention of entering Africa, Shi Zengchao, chairman of Ningbo Jinsheng Haida Import and Export Co., Ltd., was quite emotional. This company, which specializes in African textile fabrics, was established in 1998. When it was first established, Hong Kong and then to Africa were the company’s main channels. “At that time, our goods required eight links from domestic factories to African final customers. Looking back now, it actually means that each link has to divide a part of the profit.”
In 1999, the transparency of information began to change the trade and export methods of many Ningbo companies. “Trade exports were also changing rapidly in those two years. With the transparency and borderlessness of information, many of the links began to be abandoned. A Hong Kong company doing African trade closed down at that time.” That’s exactly what happened in 1999 In March 2020, Ningbo Jinsheng Haida established its first branch in Benin, Africa. “Looking back, if I had not gone out at that time, I would have probably been abandoned by the market now.”
The market that was forced to enter became a blue ocean, and the turnover began to increase exponentially. In 1998, the company’s export turnover was US$1.8 million. Since opening its first branch in Benin, Africa, in March 1999, the export volume that year has exceeded US$10 million. In the following years, it has grown rapidly every year. , the company’s export volume in 2012 has reached 145 million US dollars.
​“To be the NIKE of Africa”
This Ningbo company now has 7 branches in 6 African countries, mainly concentrated in West Africa and East Africa. Currently, every country in Africa can buy textiles from this company’s own brand. The price of CheTex textiles More than 10% more expensive than its peers.
Shi Zengchao believes that Africa is actually not as chaotic as imagined. If you want to develop and grow locally, it is important to implement a localization strategy.
“When I first set up a company in Africa, because I didn’t trust the locals, basically everything was done by the Chinese. But in the end, I encountered a lot of problems and even caused conflicts with the locals. Later, I hired locals to manage the locals. This method has good results; most of the government’s interactions are left to the local people, which not only saves money, but also makes the local people think that the company is a local company, laying a foundation for the company to expand the market.” Shi Zengchao said with a smile. .
Ningbo Jinsheng Haida Import and Export Co., Ltd. now has 105 employees in China, 30 Chinese employees in Africa, and more than 800 African employees. It also employs 2 African designers at the company headquarters.
For the future, Shi Zengchao has a clear goal: “My current goal is to accelerate the establishment of a sales network and channels covering the entire Africa. My goal is to be Africa’s NIKE and master the brand, design and channels.”