With the rapid development of our country’s economy in the past 40 years, domestic competition has become increasingly fierce, the problem of overcapacity has become increasingly prominent, and it has become increasingly difficult to receive orders online for traditional trade, prompting more and more companies and individuals to go out. The country is heading towards Asia, Africa and Latin America. Against this backdrop, more and more people are coming to Africa to set up factories, set up trading companies, open hotels, run supermarkets, take on projects, and do mining.
From the above table, we can see that China-Africa trade has continued to grow in the past ten years; according to Chinese customs statistics, from January to October 2017, the total import and export volume between my country and Africa was US$139.16 billion, a year-on-year increase 14.5%, 2.9 percentage points higher than my country’s overall foreign trade growth rate during the same period. Among them, exports to Africa were US$77.58 billion, an increase of 1.8%, and imports from Africa were US$61.58 billion, an increase of 35.8%; the surplus was US$16.00 billion, a year-on-year decrease of 48.2%
Through this set of data, we can understand China-Africa trade The overall situation is growing, but when it comes to the big "jungle" of Africa, what preparations do we need to make in order to survive and develop well? Based on my experience in the past 10 years, let me talk about some experiences.
1. Africa is full of gold, and not everyone can pick it up.
Nowadays, more and more friends are coming to Africa. According to official estimates, there are nearly one million people in Africa. According to my personal estimate, there are mostly Chinese in countries such as Angola, South Africa, Nigeria, Ghana, Tanzania in East Africa, and Kenya. country, its population has exceeded one million, not to mention the ubiquitous Chinese in other African countries. It is estimated that there are 2 to 3 million Chinese working in Africa all year round, setting up factories, mining, undertaking construction projects by central and state-owned enterprises, and opening supermarkets, hotels, trade, telecommunications services and other businesses.
With so many Chinese coming to Africa, are they all making a lot of money? The 28/20 principle also applies here; only 20% make money, 30% maintain capital, and 50% should be in In a state of loss. Every year people leave, and every year new people come. Just like the stock market and the currency market, leeks are harvested one after another.
2. How trading enterprises can reduce the upfront tuition fees
1. Understand the products you want to operate in depth and do not be fooled by superficial illusions. In your industry, it is very important whether the products you sell are competitive and whether they have advantages in reaching the destination country. Many friends who come to Africa for the first time to inspect the market will find that wow, the price of products here is several times higher than that in China. After deducting the manufacturing cost of the product itself, shipping and other miscellaneous expenses, selling it here will not be a huge profit. ; So he jumps in hastily and often ends up losing money.
Among the many Chinese businessmen I know, due to various reasons, they all lost 2 to 3 million yuan before getting on track, and some even returned home because they couldn't hold on. Some were invited by black customers from the traditional trade to come for inspection, and were taken to see some high-ranking officials, family members, their own customers, etc. They believed it to be true and thought that this customer was a big and powerful customer who could make great efforts. In order to expand the scale of his trade, he sent a large number of shipments to the customer and extended a high amount of credit. Little did he know that this was the beginning of being deceived.
2. Do a comprehensive understanding and cost analysis of every link of the products you want to sell from home to your customers. From domestic procurement, production scheduling, inland transportation, shipowner selection, export document making; to overseas, customs clearance logistics, warehousing, sales, finance, taxation and other aspects must be understood clearly. At this stage, there are very few industries with huge profits. If they are all huge profits, it will not be your turn. Basically, the profit range is 10-15%, or up to 25-30%, but excluding shipping and shipping schedules, It takes 2-3 months from production to terminal sales, and the profit after amortization is also limited. Once any link is not grasped well, it can easily lead to losses, deterioration of business operations, or even bankruptcy.
3. What should production enterprises pay attention to?
Production enterprises in Africa are also divided into small, medium and large production enterprises.
1. Small and medium-sized enterprises need to analyze the market capacity of their industry, competitors, raw material sources and procurement, energy costs, product sales, etc., but they have not done a good job in analyzing and controlling key nodes before putting into production. In the end, you will encounter all kinds of immeasurable problems and losses.
2. For investment in large-scale manufacturing enterprises, it is necessary to have a comprehensive understanding of the macro-policy of the host country; the host country’s investment policy, land policy, labor policy, and tax policy, population size, per capita GDP, competition It is necessary to have a comprehensive understanding of the opponent situation, import data over the years, customs tariffs, and politics; especially the energy issues of large enterprises are likely to become a key factor hindering the development of enterprises.
3. Learn to control various key nodes in the operation process. Whether the products produced are marketable, whether the production capacity planning is reasonable, whether the labor costs are fully calculated and planned, and how to handle and respond to employee strikes and other situations that cause production suspension losses. How to deal with the hidden costs of rough management caused by language problems and communication barriers between domestic skilled workers and local employees. How to manage and control customer billing periods, and how to deal with customer defaults, etc. Having been in Africa for so many years, I have seen a lot of corporate investment, both rising and falling.
4. Not all fellow villagers are your relatives.
Be careful when making friends when you go out. When the Chinese first came out of Africa, some of their friends were very hospitable, especially at the airport or public places. They seemed very friendly to the Chinese when they saw them and liked to get close to them. They also liked to join various chambers of commerce and Chinese associations, and got to know everyone through the introduction of friends. Fellow folks, in Africa, which is thousands or twenty thousand miles away from home, everyone values ??these rare circles of friends.
However, because the markets in African countries are relatively small and the markets in each country are relatively concentrated, you will often find that your friends start to learn from you when they see you making money for various reasons. , start a business exactly like yours, and turn your customers into their own customers; they even use various means to find people from the Immigration Bureau and the Taxation Bureau to mess with you and make you accept huge fines; making it impossible for you to continue your business. , pack up and leave. I often feel like a fellow countryman, a fellow countryman, shot in the back. The Chinese are one of the least united ethnic groups abroad, so you should be cautious when hanging out and making friends, otherwise it will bring immeasurable losses to your business.
Working and starting a business in a foreign country is no less difficult than at home. Before coming out, please do as much homework as possible. After coming out, do more on-the-spot inspections to get into the heart of the industry to avoid losses. I hope everyone can make a fortune and earn foreign exchange for the country.