Analysis of effects of Chinese penetration of the distribution sector in sub-Saharan Africa: changing roles and new competitive challenges for local distribution players

Abstract

China's international expansion in SSA has resulted in the establishment of a large number of small distributors. These retailers are significantly changing the architecture of the retail sector in SSA, with a significant impact on the activity of local distributors, and on competitive landscape. Theories on the internationalisation of sales formats emphasise on retailer strategies, ranging from replication of a sales format to adaptation to adapting to new market conditions. They also emphasise the attributes of and changing consumer expectations, by taking into account the psychological and experiential dimensions of consumption. The spread of new sales formats based either on the development of cross-disciplinary consumer or category management, are helping to create synergies between small Chinese distributors and traditional African sales formats to the detriment of modern retail chains. By adopting atypical distribution practices, Chinese traders are triggering new commercial dynamics in three areas: structuring the traditional distribution sector by broadening the range of products on offer, strengthening informal distribution and challenging the leadership of modern distribution brands.

Keywords: distribution, sales form, China, Africa, informal distribution.

JEL classification:  M31

Paper type: theorical research