Sub-Saharan Africa's Consumer Electronics (CE) market is grossly underserved, partly because of low income levels among most consumers and a booming grey market of mostly fake and second-hand products. However, a large population and strong economic growth in recent years, which is forecast to continue over the medium term, is increasingly attracting global players to the market. One such firm is South Korean electronics giant Samsung , which is introducing products and solutions that could form the platform for growth and long-term dominance of the region ' s CE market.
|South Africa Consumer Electronics Sales (US$mn), 2010-2017|
One of Samsung's most ambitious projects in Africa is the Samsung Smart School solution, a multimedia alternative to traditional classrooms. The scheme is a converged digital education package that provides schools with 65-inch interactive e-Boards and Samsung Galaxy Note 10.1 devices, with software for teachers and students. The fully integrated platform allows teachers and students to interact and access data for learning in real-time. Samsung Smart School is already in operation in many other countries, including South Korea, Malaysia and the US. In Q412, the firm launched pilots in South Africa and Kenya, with plans to expand the scheme into other key markets in the region. Another notable education-themed scheme is the Samsung Engineering Academy in Nigeria. The World Bank-assisted initiative was launched in August 2012 and aims to develop 10,000 electronic engineers across Africa by 2015.
Samsung's vice president and C for its Africa division, George Ferreira, disclosed in September that the firm is on track to achieving 100% growth in its West, East and Southern Africa sub-divisions in 2012, as well as a revenue target of US$10bn from its Africa business by 2015. Samsung's Africa strategy, according to Ferreira, focuses on three key premises: 'Built for Africa' research and development, B2B and B2G partnerships supported by key CSR initiatives (such as the Samsung Smart School solution), and growing and strengthening its partner network across the region. BMI is sanguine about Samsung's Africa strategy, especially its development of dedicated products for the African market in view of the economic and social factors at play in the region, and its CSR initiatives, which are endearing it to governments and consumers across the region.
BMI notes that Samsung's ambitious growth target for Africa is fraught with downside risks, including the persistent risk of fake products and the potential for strong competition from other global CE firms targeting the region. China's Lenovo and Taiwan's MSI are among firms keen to expand their share of the budding CE market in Africa. However, these could easily be offset by the long-term opportunities and growth potential in the region. Like Google, BMI believes Samsung's aggressive push into Africa at this time will primarily achieve the goal of building a strong brand image, which will be monetised over time through increasing sales as the middle class expands. Furthermore, Samsung's wide range of products, including communication and audio-visual products, means it is well placed to serve a wider customer base than many of its rivals in the future.