Chinese consumer brands flood into Africa as old investment model fades and exports jump 28%

Chinese concern dealings successful Africa, erstwhile dominated by state-owned enterprises, are present progressively shifting toward user products from the backstage sector.

While Africa's faster-growing economies, specified arsenic Kenya, Uganda and Zambia, spot yearly maturation rates of 4.8%, 6.4% and 5.8%, respectively, the GDP of the wide continent's 50-plus countries is 4.1%. That is according to IMF's economical outlook report past month.

Chinese investments successful Africa's resource-intensive sectors person declined by astir 40% since their 2015 peak, amid weaker returns and falling operation revenues successful accepted commodity industries, according to Rhodium Group China Cross-Border Monitor released connected Nov. 18 this year.

Meanwhile, China's exports to Africa person surged by 28% year-on-year implicit the archetypal 3 quarters of 2025, pursuing a 57% summation from 2020 to 2024, the study said. Most of those products are higher-value-added manufactured goods specified arsenic electronics, plastics and textiles.

"In the aboriginal days, Chinese companies that went implicit were doing a batch much infrastructure, and they were besides doing a batch of the earthy minerals mining," said Joe Ngai, president of McKinsey Greater China.

"In the past fewer years, I deliberation radical are trying to deliberation of the African user market," helium said. But helium cautioned that marketplace fragmentation and bladed margins tin marque these ventures difficult. 

The displacement comes arsenic the archetypal G20 acme ever held connected the continent kicked disconnected implicit the play successful South Africa. While the U.S. lone sent its acting ambassador, Chinese Premier Li Qiang represented Beijing, creating much high-level opportunities for concern discussions.

In opposition to anterior years erstwhile radical successful China didn't cognize overmuch astir what was happening successful Africa, contiguous determination are "more concern trips, sending much employees overseas. It conscionable feels much involved," said Heather Li, laminitis and China-Africa advisor astatine The Dot Connector. She noted that, increasingly, larger Chinese companies are sending decision-makers to Africa to research circumstantial marketplace opportunities.

Due to powerfulness shortages successful West Africa, Li said Chinese star products are welcomed there, portion aesculapian supplies, on with babe and household products, are besides fashionable crossed the continent.

Already, Chinese smartphone institution Transsion has built its concern successful Africa implicit the years, portion telecoms elephantine Huawei and household appliance institution Midea person besides expanded successful Africa.

In July, Chinese authorities media reported that the Midea radical signed an statement with the Confederation of African Football, which volition summation investments successful the area. The institution has already built factories successful Egypt and has plans for more.

The evolving scenery is evident not lone successful concern information but besides successful experiences shared by Chinese entrepreneurs online.

On societal media platforms similar Xiaohongshu and Bilibili, posts implicit the past twelvemonth represent Africa arsenic an emerging destination for smaller, agile concern ventures spanning dropshipping and e-commerce, arsenic good arsenic manufacturing and retail tied to Chinese proviso chains.

One earphone and data-cable trader described relocating from China to Nigeria and his hunt for African partners, portion different societal media relationship documented the advancement of a concern owner's bubble beverage concern successful Kenya. The societal media posts besides amusement entrepreneurs selling slippers, tiny appliances, furniture, and press-on nails.

Joseph Keshi, a Nigerian-born existent property capitalist and concern strategist who has worked intimately with Chinese entrepreneurs, said immoderate of them earned arsenic overmuch arsenic six-figure U.S. dollars successful their archetypal year. 

While Li cautioned that immoderate mightiness beryllium exaggerating connected societal media, she noted that the vulnerability mightiness amplify Chinese consciousness of the opportunities successful Africa.

Euromonitor information affirmed the inclination is happening connected a larger standard — highlighting however galore Chinese ventures successful Africa merchantability basal user goods specified arsenic diapers, household items, packaged sauces and snacks.

"With a rapidly urbanizing, youthful, and progressively connected population, household spending crossed the continent is projected to transcend US$2 trillion by 2030," Christy Tawii, determination penetration manager astatine Euromonitor International, said successful a statement.

She besides pointed to the emergence of e-commerce platforms specified arsenic Chinese Supermarket, which grow the scope of Asian and Chinese brands to African households. 

Many of these entrepreneurs are optimistic that greater usage of the Chinese yuan successful Africa could little transaction risks and deepen commercialized ties. Currently, the Chinese yuan is utilized successful "30% of commercialized invoicing," according to Rhodium's report.

But Rhodium Group and Atlantic Council accidental there's a "structural ceiling" to accrued usage of the Chinese yuan, citing China's commercialized surplus with astir of its African partners and the planetary reliance connected the U.S. dollar. 

The emergence of Chinese user businesses' involvement successful Africa comes arsenic nett margins constrictive astatine location owed to slowing economical maturation and aggravated competition.

Selling to Africa's consumers besides becomes much charismatic to Chinese companies arsenic they look commercialized barriers with the U.S. and Europe, Rhodium Group pointed out. The analysts laid retired a "stagnation scenario" successful which Chinese exports progressively travel to regions specified arsenic Africa if China fails to resoluteness its overcapacity issues and faces further restrictions successful Europe.

While inexpensive imports payment consumers, successful Africa arsenic successful different parts of the world, a surge of low-cost exports tin undermine section manufacturing and deepen commercialized imbalances. 

"It'll beryllium indispensable to spot Africa arsenic not conscionable a user market, but arsenic a marketplace that produces the goods that the continent itself volition consume," said Ebipere Clark, visiting chap and advisor astatine the African Policy Research Institute.

Some Chinese companies are already starting to nutrient locally.

"There is much propulsion for industrialization successful Africa," The Dot Connector's Li said. "I was progressive successful immoderate consulting projects to pull Chinese airy industries to determination the manufacturing successful Africa, and they besides person precedence entree to U.S. and Europe markets."

Guangzhou-based trading institution Sunda International sells a scope of products from cultivation tools to regular user goods, and claims to person ramped up its operation of much than 20 accumulation centers successful Africa implicit the past decade.

Sunda reportedly earns up to $450 cardinal annually by supplying Africa's necessity markets specified arsenic babe diapers and sanitary pads.

Several of Sunda's listed factories are successful Zambia. That's wherever Premier Li past week signed a $1.4 cardinal agreement to modernize a railway linking the state to the Indian Ocean with the purpose of importantly expanding freight volumes.