Recently, more and more cross-border platforms and merchants have begun to play a constructive role in Sino-African trade.

China is willing to actively expand market openness, expand access to African agricultural products, deepen cooperation in e-commerce and other areas; at the same time, the two sides will work together to promote the high-quality construction of the Belt and Road, create a sea-to-land, coordinated and interconnected Sino-African network, deepen logistics and financial cooperation, and provide assistance for the construction of the African Free Trade Zone.

The new plan for the future trade development between China and Africa has also triggered a response from the investment market. In the past few days, the stock prices of several A-shares involved in cross-border e-commerce and trade with Africa have continued to rise. Among them, Guangdong SACA Precision Manufacturing has risen by more than 20% in recent days, and Global Top E-commerce has risen by more than 15%, while Zhejiang Netsun has risen by more than 10%. In addition, special treat shares and China Tourism and Culture Investment Group, as well as other cross-border e-commerce concept stocks, have followed the trend.

From the enthusiastic attitude of the investment market, it is not difficult to see that under the national strategic policies, many businesses have actively explored and cultivated the consumption potential of the African market.

Advancement in China-Africa trade: new growth, new demand

According to data from the General Administration of Customs, China's imports and exports to Africa in the first seven months of this year reached 1.19 trillion yuan, a year-on-year increase of 5.5%. China has been Africa's largest trading partner for 15 consecutive years, especially in the traditional agricultural fields of seafood, fruits, and coffee, the trade cooperation between the two sides is already very mature.

However, in recent years, with the continuous improvement of China-Africa cooperation in infrastructure construction and the sustained stability and prosperity of the local economy, trade cooperation between China and Africa has gradually entered a new stage. China is increasingly in need of high-quality agricultural products and industrial raw materials from Africa, while African countries' demand for Chinese goods is also shifting from daily necessities, clothing to lithium batteries, photovoltaic products, digital home appliances, and even new energy vehicles.

Shenzhen Honest Cigna founder Li Xia's early focus on foreign trade operations was on the European and American markets. After seeing the potential demand for safe, low-cost lighting in Africa, she customized a more lightweight, energy-efficient, and cost-effective "solar lighting lamp" for the African market.

Using previous experience in European and American foreign trade, Li Xia simultaneously promotes online and offline operations in Africa. While contacting offline distributors, she also handles order demands through online cross-border e-commerce. With her team's accumulation of operational experience in the African market and a deeper understanding of local demand, she expanded the solar product line to refrigerators, televisions, and other rural consumer upgrade demands.

"This also witnesses their 'consumption upgrade'." Li Xia stated that besides basic lighting, rural Africans have more demand for different home appliances. Targeting a large number of children's education needs in Africa, the 'solar media player' can play various educational videos, high-quality children's movies and TV shows, bringing new choices to local impoverished families in the countryside.

Although most energy products and construction services serve daily life and livelihood needs, data shows that in 2023, China's exports of new energy vehicles and lithium batteries to Africa increased by 291% and 109% respectively. Many Chinese car companies have begun to accelerate investment in factories in Africa and cooperate with local companies on batteries and automotive manufacturing.

Yadi Group executives have expressed that they will leverage their own technological and manufacturing advantages to accurately meet the needs of the African market, tailor new products and supporting solutions, and promote green and sustainable development in the African region. Xiaomi founder Lei Jun also stated at a Sino-African business forum that Xiaomi has already operated in 16 African countries including Egypt, South Africa, Nigeria, Morocco, Algeria, and Kenya, and will increase its investment in the African continent in the next step.

In a more macro-oriented green energy cooperation, China is actively establishing cooperation with multiple African countries. Data shows that from 2021 to 2024, China has participated in the construction of over 120 climate projects in Africa. After operation, the new energy installed capacity supported by China will account for a significant proportion of the total installed capacity in Africa.

Under the 'China-Africa Cooperation on Climate Change' declaration, the China-Africa Special Action Plan on Climate Change has been launched for the next three years. Its focus includes developing and implementing the 'African Light Belt' project to assist the region in transitioning to green energy consumption.

Ongoing development of e-commerce in Africa

Not only have the two sides' commodity demand entered a new stage, but the form of trade cooperation has also undergone new changes. Different from the traditional foreign trade procurement and sales model, cross-border e-commerce has become an important emerging force driving bilateral trade in recent years, with its more flexible business strategy and timely feedback from African consumers.

Compared to the mature European and American markets, e-commerce in Africa accounts for only about 1% of overall retail. Although the scale ratio is still small, with the accelerated urbanization process in Africa, market consumption demand, logistics infrastructure, and e-commerce consumption acceptance are rapidly increasing.

Data shows that the transaction volume of e-commerce in several African countries such as Kenya, Egypt, South Africa, Nigeria, Uganda, Ghana, and Congo (Gold) has been growing at an average annual rate of over 20%. More and more cross-border platforms and merchants are beginning to play a constructive role in Sino-African trade.

At the Guangzhou Cross-border E-commerce Fair in August this year, the top local e-commerce platform Jumia from Africa participated for the first time, actively attracting Chinese merchants to expand new markets and explore new business opportunities locally. The platform's e-commerce business has covered more than 10 countries in Africa, with a monthly user visit count of over 35 million, and has started to establish its own logistics, warehousing, and distribution network, not only promoting local e-commerce fulfillment but also preparing to attract more Chinese merchants to settle in.

Chinese e-commerce platforms with more abundant operating experience are also actively entering Africa. Kilimall, an e-commerce platform founded by Chinese people in Kenya, has actively adapted to the local business model, becoming an emerging commodity distribution center that aggregates local merchants, Chinese merchants, and local consumers. As of 2023, the platform has had over 2,000 local African sellers, over 6,000 Chinese sellers, and has been rapidly developing at a growth rate of more than 50% per year, with over 10 million registered users.

It is worth noting that the e-commerce penetration rate in some African markets is gradually increasing.

According to the latest data from Statista, as of 2023, the e-commerce penetration rate in South Africa is 49.36%, ranking second, and it is expected to increase to 59.69% by 2027. Members of the South African Express Parcel Association revealed that around 0.1 million parcels enter South Africa every day, with about 40% of them coming from SHEIN and Temu. China's cross-border e-commerce products are becoming an important branch of the local market.

New formats of China-Africa cooperation: Cross-border e-commerce driving consumption and investment

The business potential in Africa has also attracted Chinese cross-border e-commerce giants such as AliExpress, Shein, and TEMU to settle in.

As mentioned earlier, Li Xia is one of the merchants on Alibaba's international platform. She has replicated her success in Europe and the United States to the African region, actively adapting products to local needs, and has achieved impressive performance growth. It is reported that Li Xia's company has sold nearly 2 million solar lighting lamps in Africa.

Shein entered the South African market as early as 2020 and quickly became the mainstream online shopping platform for fashion consumption. This year, Shein has also opened a pop-up store in South Africa, specializing in cost-effective fashion, attracting a large number of consumers.

In January this year, TEMU successfully entered the South African market, mainly selling clothing, housewares, small electronic products, etc. The prices of the products are mostly in the tens of dollars range and have been well received by local consumers.

Although many industry insiders also believe that the large number of low-priced products will bring huge operating costs and backlash from local market merchants.

For both China and Africa, simple trade sales of goods are hindered by long distances and complex communication processes, and still cannot promote deep and mutual beneficial cooperation. Chinese merchants coming to Africa to build factories and sell local products locally may be a new development vision that can be foreseen after the further expansion of cross-border e-commerce. Currently, some local e-commerce platforms in Africa, such as Kilimall, intend to attract investment in Africa.

It is noteworthy that cross-border logistics and regional logistics distribution closely related to cross-border e-commerce are also developing rapidly. By the end of 2023, China has signed 27 bilateral air transportation agreements with African countries or regions. Multiple domestic cargo routes with direct flights to Africa achieve stable round trips every week.

Among them, according to China Southern Airlines data, from January to July this year, China Southern Airlines has transported over 1,600 tons of cargo between China and Africa, a nearly 50% increase year-on-year. Most of the cargo transported by flights are from e-commerce platforms, and return flights also carry fresh agricultural products such as flowers, avocados, and coffee beans from Africa.

The logistics and transportation infrastructure in Africa is increasingly being valued in frequent e-commerce trade and communication. Ethiopian Airlines recently announced that its e-commerce logistics center at Bole International Airport has officially been completed, covering an area of 0.015 million square meters and capable of handling 0.15 million tons of goods per year. It provides one-stop services such as cargo consolidation, splitting, sorting, repackaging, and labeling. The construction of this logistics center cost $55 million, making it the first e-commerce logistics center in Africa.

Next, as the e-commerce penetration rate and green energy infrastructure continue to improve in African countries, there will be more and deeper cooperation and exchanges between China and Africa in the field of trade and commerce.