Chinese firms chase Africa’s consumers as resource investments plunge 40%
In a photo taken in Abidjan on December 8, 2014, a Chinese shoe seller shows off shopping at the Adjamene market.
Sia Kambou | Afp | Getty Images
Once dominated by state-owned enterprises, Chinese business relations in Africa are now increasingly shifting towards private sector consumer products.
Africa’s faster-growing economies such as Kenya, Uganda and Zambia are achieving annual growth rates of 4.8%, 6.4% and 5.8% respectively, while the continent’s more than 50 countries have a GDP of 4.1%. Accordingly IMF’s economic outlook report last month.
Chinese investment in Africa’s resource-intensive sectors has fallen by nearly 40 percent since a peak in 2015 due to weak returns in traditional commodity industries and falling construction revenues. Rhodium Group China Cross-Border Monitor It was released on November 18 this year.
Meanwhile, the report stated that China’s exports to Africa increased by 28% on an annual basis in the first three quarters of 2025, following a 57% increase from 2020 to 2024. Most of these products are high value-added finished products such as electronics, plastics and textiles.
“In the early days, the acquiring Chinese companies were doing a lot more infrastructure, and they were also mining natural minerals,” said Joe Ngai, president of McKinsey Greater China.
“I think over the last few years people have been trying to think about the African consumer market,” he said. But he warned that market fragmentation and thin margins could make these initiatives difficult.
The change comes as the first G20 summit on the continent kicks off in South Africa over the weekend. During USA only sent its ambassadorChinese Premier Li Qiang By representing Beijing, he opened up higher-level opportunities for business negotiations.
Unlike previous years when people in China didn’t know much about what was going on in Africa, today “there are more business trips, more employees are being sent abroad. It just feels more involved,” said Heather Li, founder of The Dot Connector and a China-Africa consultant. He noted that increasingly larger Chinese companies are sending decision makers to Africa to explore specific market opportunities.
Li said that due to power outages in West Africa, China’s solar energy products are welcomed here, and that baby and household products, as well as medical supplies, are popular across the continent.
While Chinese smartphone company Transsion has established its business in Africa over the years, telecommunications giant Huawei and home appliance company Midea have also expanded in Africa.
Chinese state media reported in July It was stated that the Midea group signed an agreement with the Confederation of African Football that will increase investments in the region. The company has already established factories in Egypt and plans more.
China’s social media interest is increasing
The evolving landscape is evident not only in investment data but also in the experiences Chinese entrepreneurs share online.
Posts over the past year on social media platforms such as Xiaohongshu and Bilibili portray Africa as an emerging destination for smaller, agile business ventures spanning dropshipping and e-commerce, as well as manufacturing and retail tied to Chinese supply chains.
A headphone and data cable merchant While she chronicled her move from China to Nigeria and her search for an African partner, another social media account documented a business owner’s evolution. Bubble tea business in Kenya. Social media posts also show entrepreneurs making sales slippersmall appliances, furnitureAnd press nails.
Joseph Keshi, a Nigerian-born real estate investor and business strategist who works closely with Chinese entrepreneurs, said some earned as much as six-figure US dollars in their first year.
Li noted that the disclosure could increase China’s awareness of opportunities in Africa, although he cautioned that some may be exaggerating on social media.
Euromonitor data confirmed that the trend is happening on a larger scale; He highlighted how many Chinese startups in Africa sell basic consumer goods such as diapers, household goods, packaged sauces and snacks.
“With a rapidly urbanising, young and increasingly connected population, household spending across the continent is forecast to exceed US$2 trillion by 2030,” Christy Tawii, regional insight manager at Euromonitor International, said in a statement. he said.
He also noted the rise of e-commerce platforms. Chinese SupermarketExpanding the reach of Asian and Chinese brands to African households.
Many of these entrepreneurs are optimistic that greater use of the Chinese yuan in Africa will reduce transaction risks and deepen trade ties. According to Rhodium’s report, Chinese yuan is currently used in “30% of trade invoices.”
But Rhodium Group and the Atlantic Council say there is a “structural ceiling” on increased use of the Chinese yuan, citing China’s trade surplus with most of its African partners and global dependence on the US dollar.
Export-only pitfalls
The increasing interest of Chinese consumer businesses in Africa comes as profit margins are shrinking domestically due to slowing economic growth and intense competition.
Rhodium Group noted that selling to consumers in Africa has also become more attractive for Chinese companies that face trade barriers with the United States and Europe. Analysts have put forward a “recession scenario” in which Chinese exports will increasingly flow to regions such as Africa if China cannot solve its overcapacity problems and faces further restrictions in Europe.
While cheap imports benefit consumers, increasing low-cost exports in Africa, as elsewhere in the world, could undermine local production and deepen trade imbalances.
“It will be necessary to view Africa not just as a consumer market, but as a market that produces goods that the continent itself will consume,” said Ebipere Clark, a visiting researcher and consultant at the African Policy Research Institute.
Some Chinese companies are already starting local production.
“There is more pressure to industrialize in Africa,” said The Dot Connector’s Li. “I have been involved in some consulting projects to attract Chinese light industries to move production to Africa, and they also have priority access to the US and European markets.”
Guangzhou-based trading company Sunda International sells a variety of products from agricultural implements to daily consumer goods and Claims to accelerate construction of more than 20 production centers in Africa in the last decade.
Sunday reportedly It earns up to $450 million annually by supplying needed markets in Africa, such as baby diapers and sanitary pads.
Many of Sunda’s listed factories are in Zambia. This is where Premier Li was last week. Signed a $1.4 billion deal Modernizing the railway connecting the country to the Indian Ocean in order to significantly increase freight volumes.
