Intelligent CIO Africa Issue 12 | Page 81

INDUSTRY WATCH AT TIMES, COMPANIES HAVE HAD TO BUY POWER GENERATORS, BUILD WATER TANKS OR EVEN PAVE ROADS TO GET PRODUCTS TO THE MARKET T omorrow’s technologies are arriving quicker to the retail sector then even some of the science fiction movies from the eighties could have predicted. A world where businesses market their products via augmented reality then deliver them via a drone does not seem light years away. Maybe Back to the Future II wasn’t so far off the mark after all (it had pencilled in 2015 for virtual reality, tablet computers and video calls, although we are yet to see an appearance from a hoverboard). But for now, the retail sector in Africa is less Blade Runner and ‘more stall by the side of the road’. According to the United Nations Economic Commission for Africa (UNECA), 90% of transactions occur through informal channels in the African retail market. “Although modern retail is growing in some African countries, it is still a fraction of the formal retail landscape,” says KPMG’s Moshin Begg, who is Manager of Sales and Markets. “In terms of distribution, shopping malls are an obvious channel. However, by far the most prevalent form of distribution – particularly in rural areas – remains setting up a table on the pavement. In these areas, road shows are an effective way for brands to get in front of people.” Driven by higher levels of disposable income and greater exposure to more brands online, formalisation of the sector is expected to gather speed over the coming years. www.intelligentcio.com Road blocks for retail Blocking the path for many companies to their customers, however, is inadequate infrastructure. At times, companies have had to buy power generators, build water tanks or even pave roads to get products to the market: “When it comes to transporting fresh produce, travelling long distances on roads that are in bad condition can have obvious effects on the freshness of the product when it arrives at its destination,” says Begg. This is particularly pertinent to the groceries segment, which is expected to be a major driver of Africa’s overall retail growth. Choppies Enterprises is Botswana’s leading supermarket chain and is ranked as one of Africa’s fastest growing retailers by Deloitte. According to Choppies CEO, Ramachandaran Ottapathu, IT and connectivity has helped strengthen the distribution of its products across Botswana and surrounding countries. “Technology has helped us a great deal in improving our distribution capabilities. Particularly in preserving the quality and lifespan of both fresh and wholesale long- life products,” he says. In 2014, the company opened a distribution centre in Zimbabwe as it looks to grow its presence across East Africa. From there, the company is able to manage all its stock centrally and electronically, enabling it greater control of stock levels and allocation. “Across all areas of our operations, from stock allocation to payments, IT is becoming INTELLIGENTCIO 81