Helping African Brands Enter the Chinese Market
Last month, we shared our interview with Hara Yukari, which promotes and sells African brands and their products in Japan. Based on Africa Reimagined’s own work supporting African brands access the Chinese market, we were keen to learn about how African brands are comparatively received in Japan.
This time, we homed in on 3 noteworthy trends emerging in the Japanese and Chinese markets which are shaping the demand for African products and compared the similarities and differences in both markets. We chose to discuss this topic because Africa Reimagined is constantly on the look-out for trends that can boost Africa to Asia value-added trade to reduce Africa’s trade imbalance with China.
The demand for goods from Africa is rising in Japan. The success of Proudly from Africa is in line with the state of the Japanese luxury brand industry. The Japanese market is the third largest in the world for high-end products and is responsible for 30-40% of the profits of some international luxury brands.
Some major collaborations have occurred in recent years, such the one between MaXhosa and TOKYO KNIT for the 2019 Rakuten Tokyo Fashion Show. To promote African fashion, the 2019 Tokyo-Africa Collection brought together prominent African and Japanese fashion designers, industry insiders, and online influencers in Japan. There is a growing demand for African fashion products in Japan’s lucrative luxury brand market, which is supported by the business sector and the government through groups like TICAD.
Tokyo Africa Collection 2019
Chinese demand for and an interest in African items is also rising. This is mainly because for several years now African governments, organizations and dignitaries in China have been actively promoting premium African products in China and forging Chinese business partnerships. In response to this and growing demands African governments to boost African value-added trade to China, the Chinese government has developed a number of trade initiatives that were announced at the previous two Forums on China Africa Cooperation (FOCAC):
– The China-Africa Economic and Trade Expo (CAETE) (FOCAC 2018).
– Nationwide online shopping festivals promoting premium African products (FOCAC 2021).
– 10bn of trade financing to support African exports (FOCAC 2021).
– Opening “green lanes” to ease African agricultural exports to China (FOCAC 2021).
This has led to an increase in African coffee exports to China – both roasted and unroasted. From 2020 to 2021 Ethiopian roasted coffee exports increased in value by almost CNY102 million. In late 2021, the Ethiopian embassy signed an agreement with China’s biggest coffee retailer, Luckin Coffee, to import over 6,000 tonnes of Ethiopian coffee throughout 2022. Although the deal focused on raw coffee beans, Luckin Coffee promoted the origin of its coffee beans, which is supporting the growing popularity of roasted Ethiopian coffee that is easily found on China’s biggest e-commerce platforms, such as Taobao, the sixth most-visited website in the world. Similarly, there has been a significant increase in South African wine exports to China.
Since Covid-19, e-commerce has become even more popular in Japan and China (particularly China, which has the world’s largest e-commerce market). According to Yukari, “These days Japanese consumers are less hesitant to purchase products online than before.” As a result, online sales are stronger than offline these days.” 70% of Japanese luxury buyers currently shop at department stores, but one-third of sales will be online by 2025, according to HumbleBunny.
2020 saw Japanese internet spending climb 44% in three months due to COVID-19 limitations and shoppers’ reluctance to leave home. Because of this, Proudly from Africa has teamed with Ethical Convenience Store and Elle Japon to enhance online sales, alongside showcasing its products through physical pop-ups in department stores and boutique shops. African brands should be able to profit on Japan’s internet sales surge post-COVID.
Between August 2019 and August 2020, China’s online retail sales also grew from 19.4% to 24.6%. The e-commerce market is expected to expand 10.4% in 2022 to CNY14.5 trillion (USD $2.3 trillion). This is partly due to Covid-19-induced lockdowns in China, but also the new techniques e-commerce platforms are developing to attract customers, including the metaverse, NFTs, VR, and live-streaming.
This expansion has also helped introduce a number of value-added African items to Chinese customers, such as roasted coffee, South African wine, roasted almonds, Rwandan chili oil, Ghanaian chocolate, and shea butter skin products.
African embassies in China have also been taking advantage of the e-commerce boom. In January 2022, the Ethiopian embassy in China organized a live-streaming event to promote Ethiopian coffee with e-commerce influencer Li Jiaqi during which almost five tons of Ethiopian coffee sold out in five seconds. Since Covid-19, e-commerce businesses selling solely luxury African products, such Kiliselect (the Chinese branch of Kilimall), have emerged as well.
Ethiopian Ambassador live-streaming with Li Jiaqi to promote Ethiopian Coffee.
Although not as widespread as, for example, American and European markets, the sustainability, and environmental impact of consumer products is quickly becoming a focal concern for a growing number of Japanese and Chinese consumers.
Despite Japan’s environmental policies aligning with Europe’s and the USA’s, only 44% of people in Japan would spend more on eco-friendly products compared to the global average of 56%. A number of cultural factors also prevent consumers from fully embracing sustainability. Japanese culture emphasizes high-quality customer service and convenience which, unfortunately, leads to extremely high levels of plastic use and waste.
Yukari explained, “Initially we didn’t intend to select brands for the platform with sustainability criteria, however it turned out most of them are actually quite in line with sustainability, circular-economy and/or ethical standards naturally because that’s how brands were developed and how items are produced by our partners in Africa. In Japan, we ourselves don’t put SDGs or sustainability too much in front, therefore most of customers seem choosing our products just because they like ones’ design and quality etc. With that said, brands and companies increasingly care about sustainability and their alignment with the SDGs. The sustainability of our brands is one of the appealing points to our partners. And customers of those partners are naturally more cautious about such aspects of our brands and items.” A 2021 McKinsey report noted that across Japanese industries, there is growing investor pressure for companies to consider their ESG performance. Therefore, although sustainability alone may not be enough to sway Japanese consumers, sustainability remains an important component of corporate social responsibility that African brands should consider, especially if they want Japanese brands and companies to patronize their products.”
Consumer market research in China has also shown that consumers have become willing to pay more for environmentally friendly products and products with tangible health benefits since the emergence of Covid-19. According to Accenture, the virus has forced purchasing trade-offs, with consumers seeking better quality and healthier options. Their survey “Covid-19 consumer survey” found that more than 70% of respondents said they will continue to spend more time and money purchasing safe and eco-friendly products, while three-quarters want to eat more healthily after the crisis. They also said they are willing to pay a premium for environmentally friendly products, and the higher the income level, the more willing they are to pay for the environmental qualities of a product.
So, what would Proudly from Africa and Africa Reimagined recommend to African brands that are interested in entering the Japanese and Chinese market?
Freddy is a research intern in Africa Reimagined. He focuses on Chinese market research and wishes to assist African high-end brands to achieve success in China. He also has interest in international relations. Freddy is pursuing a bachelor’s degree in economics.
Sena Voncujovi is a research and policy analyst at Development Reimagined. Voncujovi specializes in global health issues, Japan-Africa relations, and China-Africa relations. He served as the Editor-in-chief of Peking University’s Africa Think Tank (PATT) during his master’s in International Relations & Politics as a Yenching Scholar. Voncujovi previously advised the Ghanaian government for the 2019 TICAD 7 Conference held in Yokohama. He is the co-founder of Jaspora, Tokyo’s largest community of African diasporan diplomats, changemakers, professionals, students, and business people.
Fikayo Akeredolu is a finance and research analyst at Development Reimagined. She is studying for a PhD in Politics & International Relations at Oxford. Her research focuses on how African countries can better leverage economic and political power. She has experience in financial products from Bloomberg LP and Thomson Reuters. She is also a Schwarzman Scholar.
Yixin is a Junior Research Analyst and her focus areas is on public-private partnership and entrepreneurship. She has over three years of working experience in both private and public sectors in Ethiopia. She was the China Liaison Officer for project ‘Partnership for Investment and Growth in Africa’ at International Trade Centre, where she accumulated rich experience in investment and trade promotion.
Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team through liaising with African brands, creating graphic content and other external outputs at AR. Ivory speaks English, Swahili and French
Patrick is an International Trade Policy and Trade Law Expert with over 5 years of experience. His expertise includes trade law, trade policy analysis and regional integration. He is currently engaged with Development Reimagined as a Senior Trade Analyst, and he applies his Trade Policy expertise to AR’s work. Patrick has previously consulted for the East African Community, UNECA and for the Kenya Ministry of Trade.
Jinyu is a dual-degree Master’s student at Sciences Po & Peking University. At Africa Reimagined, Jinyu produces research to foster better mutual understanding between African clients and Chinese consumers.
Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.
Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.
Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.
Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE’s International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.
We support our clients throughout the whole onboarding and sales process on Chinese e-commerce platforms including registration, international and China-mainland logistics, storage, payment transfers, and marketing & advertising strategies.
In addition to supporting our clients with onboarding onto e-commerce platforms or developing their own WeChat stores, we also have our own Africa Reimagined e-commerce stores for our clients to sell on.
Kiliselect on WeChat Stores: Africa Reimagined launched on Kiliselect, which is a foremost e-commerce store for premium African products in China and the Chinese branch of East Africa’s Kilimall. It houses brands from a range of sectors including food and beverage, skincare and homeware. Kiliselect is found on WeChat Stores, which gives the store access to 1.2 billion active WeChat users across China.
JD-Worldwide: Next year, Africa Reimagined will open the first ever flagship, pan-Africa e-commerce store for premium African brands on JD-Worldwide, the cross-border e-commerce platform of China’s largest retailer, JD.com. It will sell exclusively luxury African brands from a range of sectors including, fashion and jewellery, food and beverage, skincare. and homeware.