Virtual Supermarket Shopping Takes off in China

 

An ingenious use of technological innovation and savvy trend-spotting is radically transforming the way people do their grocery shopping in China. Busy urban dwellers with time-poor lifestyles can now do their grocery shopping as they pass through Shanghai’s subway system and have their weekly shopping delivered to their home.

The country has experienced breakneck economic growth in the past 15 years, heading towards becoming the world’s largest economy. Much of this growth and new wealth has come from the transformation of China into the world’s manufacturing and exporting hub. But this also leaves an urban population of very busy people who need time-saving solutions to improve their quality of life.

China’s premier Wen Jiabao has now pledged to aid the world economy during the current economic crisis by boosting domestic Chinese consumption. And this new focus on consumption will open up opportunities for entrepreneurs.

“I believe China’s economy can achieve longer-term, better-quality growth. This will be our new contribution to strong, sustainable global growth,” he told the Wall Street Journal.

And a big part of the boost in domestic consumption will come from modern retailers and supermarkets. Supermarkets were almost non-existent in China before the 1990s. The country sold food in a mix of small shops, open-air markets and through wholesale networks. It was a complex system overlaid with government bodies, marketing boards, brokers, wholesalers, distributors and government-licensed and government-run shops and vendors.

But this has radically changed as the country has moved to a modern retail system. Chinese cities now boast modern supermarkets, convenience stores, hypermarkets and warehouse clubs. There was just one modern supermarket in the country in 1990; by 2003, there were 60,000 (Chinese Chain Store and Franchise Association).

The supermarket model offers many benefits to anyone looking to sell products in the Chinese marketplace. Supermarkets are very competitive with each other and are always looking for new angles and new products to get the edge and win over new consumers. If they offer new tastes and variety, the chances are high they will attract more customers.

Supermarkets tend to offer a greater variety of food products than traditional markets. They are also cleaner, the quality control is better and more standardised, there is no need to haggle over prices and measurements and units for products are clearly labelled and controlled.

But supermarkets can also be criticized for monopolizing distribution networks, hurting small farmers by driving down prices and destroying independent retailers unable to compete with the economies of scale supermarkets can bring to bear.

In Shanghai - a city that has long been a retail pioneer in China- the Yihaodian online grocery company (http://www.yihaodian.com/product/index.do?merchant=1) is radically altering how people buy food by using “virtual supermarkets” in subway stations.

It is a convergence of several technological innovations to make something even better.

Shoppers download an app – or application – on to their mobile phones. This allows them to interact with large LED screens (http://en.wikipedia.org/wiki/LED_display) in subway stations which display images of products – from soap to noodle soup to nuts – just like in a catalogue. The shopper scrolls through the products and finds what they want to buy. Beside the images are barcodes. The shopper scans the product barcode with the phone and Yihaodian then delivers the products straight to their home within hours.

It is a very convenient service for busy workers trying to juggle the many demands of daily life.

The Yihaodian system is based on a similar technology pioneered in South Korea.

Yihaodian is riding a wave of growth for the company because of its innovative approach. It has seen sales rise by 28 percent each month and it hopes to make Euro 325 million (US $443 million) in 2011, four times its 2010 revenues. Proof of the value of investing in innovation.

Yihaodian is also showing how clever it is to offer a new way of doing things. It is pioneering a new business model while also recognising the reality of people’s busy lives in modern urban environments. Lily Yu, director of the company’s wireless application department, says it is about something bigger than just profits. “Changing people’s lifestyles is what we are striving for,” she told Monocle magazine.

Yu, founder of the Wireless Application Department at Yihaodian, joined the company in 2010 and leads the team to develop and introduce this technology and new way of buying products.

The only question remaining is this: how long before all retail will follow Yu’s lead?

By David South, Development Challenges, South-South Solutions

Published: November 2011

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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China Consumer Market: Asian Perspective Helps

The rise of China since 1989 has been the most remarkable development story of our times. The number of people lifted out of poverty is historically unprecedented: 65 percent of Chinese people lived below the poverty line in 1981; in 2007 it was 4 percent (World Bank).

Many commentators have focused on China’s astonishing work ethic, vast labour resources and ability to export great quantities of products. But while China has been busy meeting the needs of the world economy, domestic Chinese consumption has received less attention.

Yet, with the Chinese firmly established as keen savers and very ambitious to improve their living standards, a vast new opportunity has emerged: the Chinese consumer market. But it will be a tricky market to tap. Chinese consumers are notorious bargain hunters and prefer to save and invest rather than consume. Poor rural families earning less than US $200 per person a year still are able to save 18 percent of their income.

This makes a lot of sense: social supports have been stripped away as China’s economy embraced the market system. If you do not save and invest, then you will not have the resources to meet the costs of education and health care, for example. China has also seen a dramatic move to urban areas, with over 43 percent of the population now urban.

China, despite all the hype, is still a marketplace that is difficult to easily enter for Western brands and businesses. And this makes for an opportunity for local brands to raise their game.

In order to compete in the consumer market, businesses need to do more than compete on price: they need to also offer something more and that usually involves building a strong brand.

The Chinese urban consumer market could grow from around US $570 billion in 2005 to around US $4.7 trillion by 2025 (PWC) (http://www.pwc.co.uk). Fast growth will be seen in discretionary spending, things other than food, clothing and utilities.

While Chinese businesses have focused on export markets and meeting the needs of the global marketplace – a focus which has been very successful and led to remarkable wealth gains – the Chinese consumer has come lower down the list of priorities. 

 Growing the domestic consumer market offers a substantial wealth-creating opportunity. Since the global economic crisis erupted in 2008, it has become apparent that the old model of exporting vast quantities of products to Western consumers alone will not be enough to keep living standards rising. Western economies are highly indebted and will take many years to recover from the mistakes and debts from the boom years and the economic crisis. 

 This is an opportunity for South-South trade, which made up 20 percent of global exports by 2010. Foreign direct investment to developing economies rose by 10 percent in 2010 due to a rapid economic recovery and increasing South-South flows. 

 One company successfully targeting this market is the Singapore-based Banyan Tree Hotels and Resorts brand (www.banyantree.com), which bills itself as specializing in luxury sanctuaries to rejuvenate the body, mind and soul. It is notable for deliberately not competing on price but on its brand reputation and for tailoring its offering explicitly to Asian tastes. The company claims its resorts are “naturally-luxurious, ecologically sensitive, culture-aware experiences for the discerning, responsible traveller.” 

 The first Banyan Tree resort was built in Phuket, Thailand in 1987. It now employs 8,200 people from 50 nationalities in 26 resorts. Founder and executive chairman Ho Kwon Ping focused from the start on the business’s brand as critical to driving the growth of the company. 

 He told INSEAD Knowledge: “The difference between us and some others is that, for many other companies having a strong brand is a reward for being successful in many things that you do but it’s sort of coincidental. It comes afterward; it’s a reward for success in other areas. For us, we’ve always said from the very beginning – having a strong brand is imperative for our survival.” 

 Banyan Tree has also eschewed quick-growth models, instead trying to do as little environmental damage as possible and to include community development and environmental projects at each resort. 

 Its Banyan Tree Ringha resort in China’s Yunnan province tries to bring the atmosphere of the fictional earthly paradise of Shangri-La to China. Ringha Valley sits near the Temple of the Five Wisdom Buddhas, 3,600 meters above sea level. The resort has 15 one-bedroom suites, 11 two-bedroom lodges, and six spa suites, decorated in a Tibetan style. The area is home to the Naxi people who trace their origins to nearby Tibet (http://en.wikipedia.org/wiki/Naxi_people). 

 The accommodation is rustic and the resort is located in the middle of a village. Visitors can see farmers at work right from the resort. Overlooked by Tibetan mountains and settled in a lush, fertile valley the sight was picked for its tranquillity and isolation. The appeal of the area to tourists is clear: mountain peaks, deep canyons, rivers, valleys, streams and tranquil lakes. And in polluted urban China, it is an area free from pollution. 

 The resort is built from transplanted Tibetan farm houses and offers hikes, mountain lakes, hot springs, gorges, forests. There are Asian touches like a welcome at the resort of Tibetan horns, songs and a tea ceremony. 

 Tourism is transforming the area. Towns and villages have been renovated to showcase traditional architecture. 

 The hotel and resort chain gets its name from the tradition of ancient merchants gathering under the branches of the banyan tree to conduct business in the cool shade.

“The 21st century is really going to be the age of Asia – both India and China,” said Ho Kwon Ping. “The huge consumer markets are going to be Asian … Now there’s a real opportunity for people of Asian origin, who have an instinctive cultural feel for where their consumers are moving towards, to come out and create a brand which can be primarily rooted in their own Asian context, but have a global relevance.”

By David South, Development Challenges, South-South Solutions

Published: March 2011

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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China’s Booming Wine Market Can Boost South

A great South-South opportunity has emerged with the recent boom in wine drinking in China and the pursuit of quality tastes. Matching high-quality wine producers from the global South – including South Africa, Chile, Morocco, and Lebanon – with China’s thirsty wine drinkers could deliver a major income boost.

In the past year China has become the world’s fastest-growing wine market with newly wealthy seeking sophisticated tastes and young working women seeking the health benefits of wine (http://www.healthtree.com/articles/red-wine/). Yearly wine consumption in China is expected to increase by 20 percent to 126.4 million cases by 2014, a fact that is grabbing the attention of old and new-world wine producers.

Women are driving China’s growing market for wine, which is perceived as a symbol of affluence, a benefit to health – in moderation – and good for the skin. A new report from the International Wine and Spirit Research (IWSR) group says wine consumption in China and Hong Kong jumped 100 per cent between 2005 and 2009, from 46.9 million to 95.9 million cases.

Import taxes have been reduced as China entered the World Trade Organization (WTO), and this has prompted foreign wine brands to lunge into the market.

The government is trying to get people to switch away from high-strength alcoholic drinks by increasing the tax on them.

Awareness and experience varies widely amongst the winemakers of the global South. Some countries, such as South Africa, Chile and Argentina, have long-standing international reputations for producing quality wine, and use sophisticated branding and marketing campaigns to connect with their customers. But other countries, including Lebanon, Tunisia and Zimbabwe, have lower profiles and do not pack the same brand punch. But all these countries help show the role viticulture can play in economic development. By tapping into this Chinese wine drinking boom, they could reap rich rewards.

In Lebanon, viticulture – the harvesting of grapes for wine (http://en.wikipedia.org/wiki/Viticulture) – has prospered despite the country’s wars and instability.

Lebanon has a long and illustrious history of winemaking stretching back 5,000 years. The modern Lebanese wine industry dates itself from 1857, when Jesuit monks at Ksara in the Bekaa Valley began importing vines from Algeria. After World War I, when the French took control of Lebanon, its vineyards expanded to satisfy France’s thirsty imperial troops.

Then Lebanon was hit by the brutal civil war of the 70s and 80s. And things have remained unstable and uncertain since.

But despite this, well established businesses like Ksara (http://www.ksara.com.lb/), Kefraya (http://www.chateaukefraya.com/) and Musar (http://www.chateaumusar.com.lb/english/cave.aspx), and small boutique producers, thrive.

Massaya (http://www.massaya.com/old/wine.htm) is one of Lebanon’s most dynamic and successful wineries, owned by brothers Sami and Ramzi Ghosn. Both are Christians like many of the Lebanese winemakers. They have been able to succeed in an area fraught with tension from past conflicts.

Another winery is using the business to revive a community and restore old skills. In the hills east of Beirut, the BBC found Naji Boutros – who used to be an investment banker in London – and his wife Jill. Boutros started Chateau Belle-Vue in Bhamdoun (http://www.chateaubelle-vue.com/), in the village where he grew up. As well as producing wine, the Chateau finances community projects and a library.

The two kings in the global South of wine exports are South Africa and Chile. Both countries have very strong brand awareness in export markets and both have triumphed after years of boycotts due to the political situations in the respective countries (Chile’s military dictatorship and South Africa’s Apartheid regime).

Wine-making is one of South Africa’s oldest industries and plays a key part in the economy (http://www.wine.co.za/), with exports growing from less than 50 million litres in 1994 to more than 400 million litres in 2008 – year-on-year growth of 17 percent.

Since the end of the racist Apartheid regime (http://en.wikipedia.org/wiki/South_Africa_under_apartheid) in the mid-1990s, various government and industry initiatives have begun to reverse the iniquities of the country’s wine-making industry. South Africa has been pioneering switching black Africans on to the pleasures and profits of wine making and drinking.

Like Argentina, Chile (http://www.winesofchile.org/) has a strategic plan for its wine industry by 2020. It hopes to be “the Number One producer of sustainable and diverse premium wines from the New World by the year 2020.”

Chile – recovering from the severe earthquake on February 27, 2010 – uses a sophisticated marketing strategy to promote its wines, including websites, social networking media and events and tastings. Since 2007, it has unified its marketing efforts under one umbrella organization, the Vinos de Chile, and it also offers wine tourism to further develop a close relationship with drinkers, The Wines of Chile Experience (http://www.chilewinetourism.com/), launched in 2010.

Chile’s neighbour Argentina (http://www.winesofargentina.org/) is the world’s fifth largest producer of wine,

The country has seen its domestic consumption of wine shrink as tastes changed, and has also experienced very extreme economic fluctuations. It has had to raise its game in order to earn income from exporting. This has been a spur to the wine industry and it has seen growth since 1996.

Wine growing has a long history in Argentina, going back to its Spanish colonial foundations in the 1500s. Argentineans drank large quantities of wine domestically in the 1970s but this tailed off in the later decades.

That had been balanced by a great export success with wines from the malbec grape. The flavour of this wine and its brand image has proven to be a weighty ambassador for Argentinean wines in general. By keeping a competitive price, Argentinean wine has flourished during the global economic crisis as people have moved to less expensive brands. The country cleverly has a wine marketing strategy based on Australia’s experience. This is an ambitious plan with the goal of capturing 10 percent of the global wine market share by 2020.

Argentina also aggressively pursues new markets by visiting them regularly and doing wine promotions and tastings with potential customers. It also brings people to the country to visit the wineries and experience Argentinean culture and food.

In North Africa, Algeria, Tunisia and Morocco have a long history cultivating wine and have been winning awards since the 1859 Fall Exposition in Paris. Over the years quality control was an issue as political and economic factors disrupted access to global markets. But in the last few years governments have been working to support the industry and regain its past reputation.

Winemaking in North Africa goes back to the Romans and the Phoenicians. Despite Islam prohibiting the consumption of alcohol, the industry has survived. The industry is currently being re-organized to make the most of a free trade agreement with the European Union.

Tunisia has a long, rich winemaking heritage known the world over. About half of Tunisia’s vineyards are dedicated to producing grapes for wine production rather than for sale as table grapes.

Over the last 20 years, Les Vignerons de Carthage, a cooperative of 10 cellars located in the Cap Bon region of Northern Tunisia, have been working under the leadership of Belgacem D’Khili, a Bordeaux trained oenologist to improve and maintain wine quality.

They have kept the old vines, persevered with hand-harvesting and traditional techniques, but have modernised the cellar equipment, the storage and overall approach to hygiene.

North African wines are being collectively marketed by resellers like Cotes d’Afrique (http://www.cotes-d-afrique.co.uk/tunisianwine/history.aspx).

Morocco, too, has become a respected wine maker and has a robust domestic wine-drinking market. Morocco’s oldest winery, Celliers de Meknes (http://www.lescelliersdemeknes.net/), told the Global Post how it handles the delicacies of wine-making in a majority Muslim country.

“We are tolerated,” said Jean-Pierre Dehut, the export manager for Celliers de Meknes. “But the tolerance requires that we stay within certain boundaries.”

Celliers de Meknes sells some 30 million bottles of wine per year — 25 million in Morocco.

A little-known wine producer, Zimbabwe has been producing wines since the early 1950s and commercially since 1965, according to Zimbabwe Tourism. Production peaked in the 1980s and later suffered from an export ban. Despite the country’s economic and political problems, the wine industry has grown. New techniques, equipment and grape varietals have been introduced and winemakers have been trained in Germany, Australia and South Africa. Regular visits from outside consultants have helped with raising standards.

Apart from economic problems the industry struggled with viruses and climate. But since the 1990s the industry has started to win international wine competitions

One of the successful wineries is Mukuyu Winery (http://www.africanbeersandwine.com/pages/wine.html), which produces an average of 1.5 million litres per year from 100 hectares under vines. Over the past 13 years, Mukuyu wines have won Silver and Bronze medals at the International Wine and Spirit Competition in London, and regional wine tasting competitions in South Africa.

By David South, Development Challenges, South-South Solutions

Published: January 2011

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Chinese Trade in Angola Helps Recovery

Two-way trade between Africa and China has been an outstanding success story of the past decade. It has led to significant new investment in the continent and brought many new job opportunities. The Chinese community in Africa comprises a mix of entrepreneurs and workers. In formerly war-torn Angola, Chinese workers and investors have led an economic boom as the country recovers from decades of conflict.

The Chinese are generally young, well-educated, English-speaking, ambitious and hard-working. Estimates put the number of Chinese people in Angola at 100,000, and about 1 million across Africa.

The reason these bright young things need to come to Africa goes back to the essential reality of modern China: despite rapid economic growth, per capita incomes classify it as a poor country. While the outside world sees the glitzy, go-go progress of China’s cities, the country’s rural poor go unseen. Around 400 million of China’s 1.3 billion people have annual per-capita income equivalent to US $8,000, while the remaining 900 million have per-capita incomes as little as one-tenth that amount.

Some 6.3 million people in China will graduate this year from university, and it is still very hard for a well-educated Chinese person to get a good job right away. More than a quarter of these graduates will be unemployed, according to the Education Ministry.

There has also been disquiet in parts of Angola over China’s role, with some calling it “neo-colonialism”. But clearly, both Africa and China have much to gain by increasing cooperation.

In the southern Chinese city of Guangzhou (http://en.wikipedia.org/wiki/Guangzhou), a trading hub nicknamed “Africa Town” has emerged since 1998. There are officially 20,000 African traders and entrepreneurs in the city of 18 million, but unofficial estimates put the number at more than 100,000. This African trading hub has emerged to the benefit of both the Chinese and Africans. It is a coming together of small traders matching Africa’s strong demand for consumer goods with China’s manufacturing powerhouse.

In Angola, the mix of entrepreneurs and workers is having a big impact on the country’s development.

Betty, a 22-year-old Chinese woman who has various projects in Angola, including the local Chinese language newspaper, is a typical go-getter.

“I am doing much better here than if I had stayed in China,” she told the BBC.

Another beneficiary of the two-way trade is Deng, a construction a worker: “I earn twice as much as I would at home and I have got a better job,” he said.

For most Chinese, foreign travel is still rare and the excitement of going to Africa to work both attracts and repels because of the continent’s reputation.

“At first I found it frightening, “said Wang. “You hear lots of stories of Chinese people being robbed by the locals.” But he found “there are great opportunities here.”

Another, Jet, who runs an air conditioning business, came to Angola five years ago.

“Everything had been destroyed,” he recalled. “There were no roads, railways, shops, nothing. Some Western companies were already here selling their products but I knew I could import things cheaper from China.”

The large infrastructure projects being undertaken by major Chinese companies are also creating new opportunities. Many Chinese labourers are working on building roads, railways, hospitals and vast housing complexes.

One of the more visible symbols of Chinese investment in Angola is the restoration of the Benguela Railway (http://en.wikipedia.org/wiki/Benguela_railway), considered one of the great routes of Africa and built by British contractors. An engineering triumph, its 1,344 kilometres (835 miles) of track stretch up the Angolan coast, right into southern Congo. The railway took almost 30 years to build in the late 19^th and early 20^th centuries, but little remained. Until very recently all but a tiny stretch of the line was closed. Now Chinese investment is rebuilding the railway and bringing economic improvement in its wake.

“I couldn’t do this before the railway was fixed,” a woman using the train to get to the market to sell her plump red tomatoes told the BBC. “Before, I had to travel by car which was much more expensive.”

And her income has improved along with the refurbished railway. “I am not rich, but a bit richer,” she said.

And unlike the British, who used the railway to export copper without paying for the resource, the Chinese labourers are getting paid and the Angolan government is paying back the Chinese loan for the railway repairs by selling oil overseas for a market rate.

By David South, Development Challenges, South-South Solutions

Published: October 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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African Trade Hub in China Brings Mutual Profits

South-South trade is the great economic success story of the past decade. World Trade Organization (WTO) (www.wto.org) figures show South-South trade accounted for 16.4 percent of the US $14 trillion in total world exports in 2007, up from 11.5 percent of the total in 2000. While the global economic crisis has slowed things down, the overall trend is firmly established.

Trade between China and Africa has surged over the past decade since China joined the WTO in 2001, from around US $10 billion in 2000 to US $73.3 billion in 2007, registering a year-on-year increase of 32.2 percent. In 2008, it soared by 44.1 percent to reach a record high of US $106.84 billion, registering a year-on-year increase of 45.1 percent, according to Zhang Yongpeng of the Institute for West Asian and African Studies (IWAAS).

In the southern Chinese city of Guangzhou (http://en.wikipedia.org/wiki/Guangzhou) , a trading hub nicknamed “Africa Town” has emerged since 1998. A conglomeration of buildings around the Xiaobei road in Yuexiu district of the city, it has been equated to the famous Chungking Mansions of Hong Kong (http://en.wikipedia.org/wiki/Chungking_Mansions) . There are officially 20,000 African traders and entrepreneurs in the city of 18 million, but unofficial estimates put the number at more than 100,000. This African trading hub has emerged to the benefit of both the Chinese and Africans. It is a coming together of small traders matching Africa’s strong demand for consumer goods with China’s manufacturing powerhouse.

The traders export generators, toys, mopeds, construction equipment and other products back to Africa. The traders act as go-betweens, bringing their local knowledge of African market demands to the Chinese manufacturers.

Citizens from over 19 African countries are represented, the majority from Nigeria.

“Almost 90 per cent of goods in African markets come from China, Thailand and Indonesia,” Sultane Barry, president of Guangzhou’s Guinean community, told the Globe and Mail newspaper.

Barry has an entire floor for business in a 35-storey building packed with shops, offices, freight-forwarding companies, African restaurants, hairdressers and furnished apartments for rent by the week.

“We’re not here for fun,” said Ibrahim Kader Traore, an entrepreneur from Ivory Coast. “We work hard and do well. In Abidjan, people still swear by France, where you might be able to save US $13,000 over 25 years; in China, you can have US $130,000 in just five years.”

A trading success story, the hub has run into problems over visas and the upcoming November Asian Games in Guangzhou, which is increasing identity checks.

“I sell more than 50 per cent of the output of my brother-in-law’s TV factory to Africans,” one saleswoman told the Globe and Mail. “We need them and I’m worried there are going to be fewer of them.”

Brought together by trade and mutual interest, both communities still have much to learn about each other. Relations have had their ups and downs and Africans can face discrimination.

But the trading relationship is teaching both sides important lessons. “The arrival of the Africans taught the Chinese how to look for business opportunities,” said Barry. “The secretaries we had here didn’t speak a word of English. Our presence started a craze for learning languages: English and French. The Chinese didn’t know the basic rules of international trade. They knew nothing about documentary credit. They paid for everything cash in hand.

“The Chinese people will soon realize that it’s better for business to deal directly with ordinary Africans.”

And the pressure is on to see who will keep trading relations with Africa positive. “The door to the Chinese market has only opened a crack, mostly because visa requirements are so tough,” said Zango, a trader from Mali.

By David South, Development Challenges, South-South Solutions

Published: July 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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