Every region has its unique business dynamics and rules. The dynamics of the textile industry and entrepreneurship in East Africa have been rapidly evolving. The extensive use of digital media and digital sales leads way to agile companies that combine traditional industry with new sales channels. International companies must understand these trends and the value chain at each industry before making a sizeable investment.
Entrepreneurship without Corporate Financing Solutions
Msafiri Raphael Paschal is a 28-year-old entrepreneur in Dar es Salaam, Tanzania. He owns a clothing workshop which manufactures fashion bags, clothes and all type of accessories with the use of Kitenge fabric (colorful pieces of fabric commonly used in Sub-Saharan Africa). He learned everything about Kitenge from his mother, a lady from the rural areas of Mount Kilimanjaro. Then, he combined their family tradition with some technology and modern production techniques.
He started his company when he was a student at the University of Dar es Salaam at the age of 23. He realized the market opportunity of Kitenge fabric in modern clothes. Firstly, he bought basic t-shirts and sew Kitenge pieces on them in a fashionable way, then sold them to the local markets serving tourists. He rented the sewing machines of another workshop and bought fabric for daily use.
The lack of affordable bank loans and microfinance solutions pushed him to use his University scholarship savings and borrow from family members for buying machinery and equipment. He bought used sewing machines and rented a workshop in Dar es Salaam. Currently, the company has 6 employees who are working at the design, cutting, and sewing of clothes.
The Distribution of Fabrics: From Global Manufacturers to Local Workshops in Tanzania
Msafiri does not keep a high amount of fabric stocks, instead, he buys fabric with new orders to minimize stock costs. The fabrics are mostly made in China or India, however, there are also some local suppliers. The foreign fabric companies sold their products in bulk to local wholesaler, then the products are distributed to workshops through their distribution channel.
These distribution channels should be analyzed very carefully by international textile companies before aiming at the Tanzanian market for fabric sales. The major fabric distributors are located in the city center, and they serve local workshops with available stocks. Although these fabrics are much more expensive compared to the price in international markets, these local workshops cannot undertake the investment of importing them on their own.
The Rise of Digital Sales Channels and Social Media
The use of technology and the internet shapes the Business environment in Sub-Saharan Africa. The penetration of GSM and smartphones is high and there are great opportunities for companies to generate more sales through mobile channels. Msafiri uses this social and technological trend to his advantage.
His company is very active on social media, such as Facebook and Instagram. He primarily shares his new designs and models on these platforms and collects feedback. Also, he mentioned that he had many sales Thanks to referrals on social media. Moreover, he uses Google Ads and Facebook Ads to promote his products.
In terms of sales, he uses three main channels. Firstly, he makes sales in a showroom at his workshop. You can choose from a variety of products and directly buy them at the workshop. If you want some customization, it is done at the workshop instantly. Secondly, he sells to local shops in the touristic areas of Dar es Salaam. Both local people and foreigners are his customers. His products can be found in more than 10 physical stores. Lastly, he cooperated with a Swiss company to sell their ethnic products in Switzerland through an online website. Msafiri ships the orders to Switzerland with air Cargo and they are sold to European customers.
The importance of understanding local consumer trends and supply chain
The consumers and SMEs in Sub-Saharan Africa have their characteristics. The use of mobile technology and an increase in purchasing power have positively shaped the consumer market. However, there are still many obstacles for SMEs. The lack of financing and complications in the supply chain are the main obstacles.
Istanbul Africa Trade Company conducts detailed research on the consumer markets and the local business environment. We have local partners in African countries to facilitate trade and investment. You can reach our other research papers and case studies on our website: www.istanbulafrica.com