When it comes to Africa, most people’s impression is backwardness, poverty, chaos, or heat, grassland, animal migrations, etc. Africa is always associated with primitive, and it seems to have nothing to do with the Internet, new energy, artificial intelligence and other modern business. But today, in 2023, we have to re-examine the value of Africa.

Africa, whose full name is Afrikaans, is located in the western part of the Eastern Hemisphere, adjacent to the Atlantic and Indian Oceans, and has a land area of approximately 30.2 million square kilometers, which makes up 20.4% of the world’s total land area, making it the second largest state in the world.

In 1451, Portugal occupied Ceuta, and European powers began to colonize Africa. Between the end of the nineteenth century and the beginning of the twentieth century, the colonization of Africa by European countries reached its peak, with 95 per cent of the African territory divided up and resources plundered and destroyed for a long time. It was only after 1947 that African countries became independent one after another, breaking away from some 500 years of colonial rule.

After more than six decades of productive development, Africa has sprung up with new business opportunities.

The first opportunity is reflected in the demographic dividend. Africa’s population has experienced explosive growth over the past 60 years and, as of today, has a total population of over 1.4 billion, about one sixth of the world’s population, and is projected to reach a total of 2 billion in 2050, more than one fifth of the global population.

What’s more, Africa’s population is also characterized by youthfulness; according to statistics, the average age of the African population is only 19.4 years old, far below the world average of 30.6 years. This is a huge labor market and a huge consumer market.

Secondly, the Internet has also gained a degree of popularity on the African continent.

According to the World Bank, as of June 2022, there were 658 million Internet users in Africa, with an Internet penetration rate of 46.8%. As mobile internet continues to grow in popularity and cell phone prices fall, social media penetration in Africa is also increasing. Nox Spotlight data shows that there are 375 million social media users in Africa in 2022, which is 8.18% of the global social media user base.

Although the number of social media users is lower than other continents, the average length of social media use in Africa is much higher than in regions such as Asia. According to DataSparkle, African internet users spend 3 hours and 10 minutes per day on social media platforms, second only to South America. The popularity of social media has led directly to the growth of e-commerce. According to authoritative experts, by 2050, Africa’s e-commerce market will reach $75 billion, with the highest compound growth rate in the world.

In addition, Africa is also a globally recognized resource continent with very rich oil and gas resources, and huge reserves of non-ferrous metals such as iron, manganese, chromium, cobalt, nickel, vanadium, copper, lead, zinc, tin, phosphate, and so on, which have great investment potential.

In recent years, with the introduction of the Belt and Road Initiative, China’s investment in Africa has continued to grow. Chinese-funded enterprises have basically covered 53 countries and 6 regions in Africa, and the capital, technology, experience, employment platforms, partners and market channels needed for Africa’s development have come one after another. Africa has become the world’s last blue ocean yet to be developed.

So, how should entrepreneurs from all walks of life grasp the last blue ocean in the world and dig for gold in Africa? Based on this, we interviewed Xu Hui, President of Hubei African Chamber of Commerce.

Xu Hui graduated from Wuhan University, joined the national unit in 1991, and was expatriated to Kenya, Africa in 1993. He resigned in 1995 and started his own business, which is the earliest batch of entrepreneurs in China who went to sea in Africa.

At present, Xu Hui owns three companies in Kenya, namely Golden Lion International, Phoenix Paper and Golden Rock Development, with business scope covering international trade, production and processing and real estate development. He was also the director and executive vice president of the Kenya Economic and Trade Association, executive vice president and honorary president of the Federation of Kenyan Chinese Overseas Chinese, executive vice president and honorary vice president of the East Africa China General Chamber of Commerce, etc. He has represented the Kenyan diaspora groups to participate in the World Overseas Chinese Congress in Beijing for many times, and has been received by the state leaders.

In this interview, Mr. Xu Hui talks in detail about the key points and difficulties of going to Africa through his personal entrepreneurial experience, and the following are excerpts from the interview:

Reporter: What industry did you first start your business in Kenya? How is the operation?

Fai Xu: I started out in the trade of small handicrafts, such as daily necessities, toys and so on. I didn’t have much money at that time, so I chose small commodities with a low capital threshold as a starting point. In China’s small commodity markets, such as Beijing Tianyi and Hebei Baigou, I bought a batch of daily necessities, such as ties, zippers, rings and necklaces, and shipped them to Kenya.

In Kenya, there are no formal sales channels, just street stalls. 95 Kenya is equivalent to China in the 60s and 70s, commodities are extremely scarce, and those small commodities have almost twenty-three times the profit. That is to say, in the country a dollar thing, in the other side can be sold to more than 20 dollars, at that time a day nearly 2000 U.S. dollars turnover. It’s very true that my pockets were bursting with money.

Reporter: The situation changed since when?

Fai Xu: Very soon, about 1 year later. I started to do this business in 95, at that time there were only a few hundred people in the Kenyan Chinese community, including some state-run companies, and not many people did individual business. But around 96, 97, many people started to do the same business with me, the profit margin was quickly pressed down, 20 dollars of goods sold directly to 5 dollars, so I began to transform, sell computers, sell tissues, batteries, real estate and so on.

Reporter: Is there anything that happened to you that really impressed you with the change in direction of the business?

Xu Hui: What impresses me is that after we chose the category of batteries, we encountered the suppression of the U.S. Permanent Battery Company. Before we chose to do this product, we investigated the commodity import and export situation in Kenya, and the top few items were often textiles, communication equipment and dry batteries. Because of poor infrastructure in Africa, often blackouts, so the consumption of batteries is very large, such as flashlights, radios, etc. need to use batteries to maintain, he is an energy product, but also a fast-moving goods, we investigated the data at the time, Kenya’s imports of the total value of about hundreds of millions of dollars, dry batteries accounted for more than one-tenth of the value.

In the Kenyan dry battery market, the largest supplier is the United States Yongbei Battery Company, they and the local government in all aspects of cooperation, in an absolute monopoly position, after we entered the market, they have taken various measures to suppress us. For example, the Kenyan Quality Inspection Bureau frequently conducts random inspections on our products, I remember that in the beginning of the year, the Kenyan Quality Inspection Bureau randomly inspected us 18 times a year.

Competitors have been utilizing local quality standards to fight against us and other Chinese brands of similar products. In order to cope with this non-market competition tactic, we carefully studied the international standards for battery products, Kenyan standards and relevant regulations of Chinese standards to find out their wrong interpretations on the scope of application of the quality standard rules and the details of the relevant regulations. After many times of communication and negotiation, they finally recognized us and later invited us to participate in the formulation of some of their electronic product standards.

Reporter: Taking Kenya as an example, are there any legal provisions in Africa that are very special in economic terms?

Fai Xu: Most of the countries in Africa were colonized, and the legal systems left by the colonizers are very perfect, most of which are similar to European laws, and only a few of which have local characteristics. Starting a business abroad, especially in developing countries, is very easy to be restricted by policies and laws, so first of all, you have to know the law and read through their rules.

Reporter: How many member enterprises are there in the Hubei African Chamber of Commerce, and what industries are they mainly engaged in?

Xu Hui: At the beginning of its establishment in 2006, the Chamber of Commerce had more than 200 member enterprises, and then due to the impact of the epidemic and the global economic crisis, many member enterprises withdrew from Africa to China.2022 In September 2022, the leadership of the Chamber of Commerce took into account that the Chamber of Commerce was responsible for 55 countries in Africa, and there were challenges in membership recruitment and services in many countries, wide geographical area and scattered personnel, so it proposed to set up Hubei Chamber of Commerce and Hubei Friendship Association in each African country, and absorbed them into the local chapters of our Hubei African Folk Chamber of Commerce. So we proposed to establish Hubei Chamber of Commerce and Hubei Friendship Association in each African country, and at the same time absorb them into our Hubei African Chamber of Commerce in the local chapters. In this way, Hubei entrepreneurs will be connected to provide more direct and effective localized services for all member enterprises.

Currently, the Chamber has set up four chapters in Kenya, Tanzania, Angola and South Africa, with more than 200 member companies in Kenya, more than 200 in Tanzania, and more than 100 in Angola and South Africa respectively. The Chamber is also planning to establish new Hubei Chambers of Commerce in Zimbabwe, Cote d’Ivoire, Seychelles and Nigeria. The member enterprises of the Chamber come from all walks of life, including engineering contracting, bulk trade, agriculture, investment, manufacturing, real estate development and so on.

Reporter: What kind of services can the Hubei African Civil Chamber of Commerce mainly provide to member enterprises?

Xu Hui: We can introduce the process of going abroad and registration to entrepreneurs who want to go to Africa in Hubei Province, help them to connect with the local government, and provide information about the politics, economy and culture of African countries. In particular, we can gather local Hubei Chinese overseas Chinese, help them solve problems, coordinate and resolve disputes, and provide some humanitarian care.

Reporter: How do you feel the entrepreneurial environment in Africa has changed since the launch of the Belt and Road policy?

Xu Hui: First of all, in terms of infrastructure, after the launch of the Belt and Road policy, many large state-run organizations have come in to build bridges and roads, such as the Monnet Railway in Kenya, which is the first new railroad built in Kenya in the last 100 years. There are also some basic energy facilities started to build, such as wind power projects, solar energy projects, etc., which provide the most basic business environment for later entrepreneurs. Secondly, we also feel the enthusiasm of domestic entrepreneurs from all walks of life for the African market. With the increase of publicity, many entrepreneurs have a basic knowledge and understanding of the African market, and they are willing to do business over here.

It is of great significance that conditions have been created at the macro level, but when it comes to the micro level, I think that the relevant organizations should pay a certain degree of attention to SMEs in the next step. Of the 5 million Chinese overseas Chinese in Africa, more than 95% of them are SMEs, but at present, there is still some pressure on SMEs to go to Africa in terms of business loans and other aspects.

Reporter: What do you think is the most difficult part for Chinese enterprises to go to Africa?

Xu Hui: I think the most difficult thing is the courage to go out. It is not easy to cross half of the globe to live and do business in a completely unfamiliar place. Local human history, policies and laws, people’s logical thinking and behavior are completely different from what you have known since childhood, and it is a very painful thing to live in totally different culture, but this psychological barrier is something you have to overcome before going out. In fact, the local life in Africa is not as difficult as we think, the obstacles are not as many as we think, the vast majority of our domestic entrepreneurs go there to have earned money.