A new report by Frost & Sullivan Africa has identified increased consumer access, investment in infrastructure and improved service provisioning as the keys that will open up a significant market for consumer-focused products and services as well as more efficient last mile delivery business models and ultimately address the challenge of logistic in Africa.
The report titled ‘Urbanisation in Africa: Creating greater access to customer?’ believes that gaining access to rural consumers is challenging because of weak supply chains that service remote areas, stressing that as more people migrate to urban centres, a significant opportunity can be realised as there is a greater means of reaching more consumers.
“Inadequate and insufficient infrastructure continues to be a major hindrance to Africa’s development. Investments in infrastructure across major sectors such as energy, water and transportation have the potential to add 2.2% growth on top of Africa’s 2.3% annual GDP growth. This translates into an annual $56 billion revenue injection into the African continent. Opportunities ranging from financing to construction and services will become more accessible to the private sector in key economies,” it noted.
Further, the report argued that service provision is a major issue in most African cities due to a lack of urban density. However, the increased level of private sector involvement in providing improved access to healthcare, sanitation and education opens doors to massive opportunities that will give access to those in the hinterlands.
Thus, the report calls for a unique business models and innovative marketing approaches such as what South African start-up called Pargo is doing by taking advantage of the gap in the market in terms of consumer access.
Pargo, a smart logistics company has found that up to 75 percent of sub-Saharan Africa’s population has limited access to goods and services as a result of their place of residences such as within informal settlements or large residential estates.
But with Pargo, customers across southern Africa can now easily send and receive parcels and make use of online shopping via convenient retail stores.
Also, a Nigerian startup called Gricd is making up for efficient healthcare delivery and access, which is seen as one of Africa’s greatest challenges where one in five children do not have access to life-saving vaccines.
Gricd uses an IoT-enabled cold box as a means of bridging this gap since it can store temperature-sensitive goods as well as be remotely controlled and tracked. Their primary focus is ensuring that vaccines and medicines reach the intended market or consumer without disruption in the cold chain.