The opportunities in Africa’s mobile hardware market are still huge.
Mobile phones are now the fastest selling device in the world, even more so in Africa! Many of the major mobile brands, especially Nokia, Samsung, Blackberry and Apple, continue to compete aggressively to gain a larger share of the action. Although the market for brand-new phones is big, the market for used (second-hand) phones is also thriving, driven by the demand from people who cannot afford to buy new.
Second-hand phones have a strong appeal on the continent because they provide the opportunity to own a new phone model at a very affordable and inexpensive price. As a result, for less than half the price of brand new phones, millions of Africans can afford high-end and multifunctional smartphones. Many of these used devices are imported from Europe and USA and sold in several informal open markets across Africa.
Because of this booming second-hand market, more people are able to quickly sell off their phones and then switch to a newer or better model. However, there is a growing presence of cheaper smartphones (especially from China) that are now flooding the African market. As the prices of brand new smartphones continue to come down, it is likely that it will lure more consumers away from second-hand phones.
Mobile phone accessories are another huge segment of Africa‘s mobile hardware market. As more Africans own mobile phones, the demand for accessories like chargers, earphones (wireless and wired), batteries, phone pouches, USB connectors and memory cards remains on the rise. Millions of these accessories (worth billions of dollars) are imported every year, especially from China. Located in Lagos, the commercial capital of Nigeria, the ever-busy Alaba International Market has become the key hub and main supplier of mobile phone accessories to the West Africa region.
The mobile accessories market continues to change in response to the needs, preferences and fads in consumer demand. Innovations such as solar-powered chargers, for example, are very likely to be taken up by the market because of notorious electric power supply challenges faced by many people. Entrepreneurs must learn to watch and follow very closely the trends in the mobile phone market in order to exploit new opportunities that emerge.
Mobile phone servicing and repairs is a sector that has emerged from the booming mobile hardware market and is much in demand. Like all machines, mobile phones may require repairs which involve software troubleshooting or a change of parts. This service and repair niche of the mobile phone market is providing business and employment opportunities for thousands of young and technically-savvy Africans. There is also a booming multi-million dollar market for mobile phone spare parts that supports this segment of the industry.
Business Concept
The immediate concept that would probably come to mind is to import the phones or the accessories, rent a small shop and start selling. And there is nothing wrong with this idea; go for it, but only if there is a clear demand in your area. Don‘t make the mistake of simply joining several such shops that already exist in your market, or you will face the risk of remaining a very small fish in a big sea.
Now, there are ways you can set yourself apart: The eCommerce technology market in the West, for example, is huge. More and more people in Africa will want to buy their mobile phones and accessories online, so if electronic payment options are available in your country this would be a great opportunity. The market is still new to most parts of Africa, and you can be among the first to get involved.
Here is another concept: what about developing your own very neat made-in-Africa brand for mobile phone accessories? It would be very easy to design a variety of phone cases, for example, made of leather for business people and other fabrics for everyday use, or with hip African designs for the youth. They should stand out and not be a copy of what is already out there.
If you have the cases produced locally, let‘s say by a group of women, poor, or otherwise disadvantaged people, you could sell that narrative of creating job opportunities for them alongside your brand. Africans would like to buy your cases knowing that they support other Africans when doing so – this would be your competitive advantage over the many Chinese products flooding the market.
If such hand-made mobile cases exist already in the many informal markets of your particular country, then it is your job to improve the quality or the look. Brand them and get them into mainstream shops. It is also a straightforward business concept that you could easily start or replicate in any other country in Africa.
You could also look into the option of manufacturing other mobile phone accessories locally: ear plugs or car holders, for example.
Top Countries & Policy Guidance
This concept would work across Africa.
Action & Tips
Almost everyone you know in Africa has a mobile phone. Ask them what they wish they had better access to or where they‘d prefer a greater choice. How could repair services be improved?
Look at the online stores of major Western retailers to get an idea for an eCommerce business, or get inspired by the many products available. Which one could you produce?
Success Story
Alex Fourie – iFix (South Africa)
Alex Fourie has started several businesses. Many of them never took off, but he struck gold with his company iFix. When Alex was told his iPhone could not be repaired he watched a YouTube video teaching himself how to fix it. He then put an advert in a local newspaper offering that service. What started in 2007 in his dorm room while he still attended university has now grown into a chain of eight stores across the country, employing about 85 people.
Alex did not only offer to fix certain phone devices, but he made a promise to customers that he would turn the average waiting time of other repair services, which could last days or even weeks, into a one-hour service. After all, who wants to be without their mobile phones for days? This gave him a huge competitive advantage.
Today, Alex also runs RiCharge, a local manufacturer of mobile phone accessories and charging devices, which his company is now selling into 12 countries across the continent, including Nigeria. He has plans to increase the production of solar power charging equipment. Alex Fourie was featured in the renowned US Forbes Magazine as one of the „30 Most Promising Young Entrepreneurs in Africa 2014‟.