Entry-level consumer electronics, plant-based dairy substitutes and snack food are some of the items Asian businesspeople could consider if they want to expand to Africa, according to panellists who participated in a recent webinar organised by the Singapore Business Federation.

Charles Antwi-Boahen, CEO of Ghanaian retailer Kab-Fam, highlighted food, beauty products and affordable consumer electronics as categories with the best potential. “I know a lot of companies who make a lot of profit dealing in [these goods],” he said, adding that low-cost mobile phones and electronics “move very quickly”.

Deepak Singhal, group head for consumer business at Singapore-headquartered Tolaram, identified the local production of plant-based milk substitutes as a potentially lucrative opportunity in some countries. Currently, Nigeria – where Tolaram has a substantial business – depends on imports for at least 60% of the dairy products it consumes. According to him, the snack segment is also still nascent in many African countries and presents growth opportunities.

Products must be adapted to suit local tastes, reveals Singhal. “That’s where a lot of companies make the mistake; they don’t want to spend energy and time to localise the product.” The Indonesian instant noodles brand Indomie, which Tolaram sells in Nigeria, has a different flavour profile there than in Indonesia. While palettes differ from one African country to the next, there are also in-country variances. For instance, he explained Nigeria can be segmented into three regions based on consumer tastes and preferences.

Consumers in Africa are becoming increasingly aware of sustainable products but Singhal believes only a small percentage are willing to pay a premium for them. These goods will become mainstream only once they are sold at price points that the cost-sensitive market can afford.

Antwi-Boahen emphasised the importance of reputable, experienced and capable in-country distribution partners. Although formal retail is growing in countries like Ghana and Nigeria, some 90% of sales are through informal channels such as open-air markets, kiosks and table-top sellers. Businesses that ignore this segment miss a significant share of potential revenue. Because of the high costs associated with calling on thousands of small shop owners, FMCG companies typically work through distributors that in turn, supply a network of wholesalers, which sell to end retailers.

Apart from physical retailer channels, Antwi-Boahen advises businesspeople to consider e-commerce, which is becoming more prevalent in Ghana.

Singhal highlighted the emergence of B2B e-commerce platforms that connect informal retailers to manufacturers of consumer goods. These platforms – such as TradeDepot, Omnibiz and Wasoko – could be a good starting point for international companies wanting to test the waters in different African markets.

Singhal recommends that foreigners exporting products to the continent should not treat their relationships with African partners as purely transactional. Instead, they should strive to add value to the venture. Those who do not approach the relationship as a long-term endeavour could see their ambitions wane once the buyer finds a better or cheaper supplier.