Coping with changes in an ongoing digital revolution across Africa

Business becoming realistic

On the recent changes in Africa, Taimei Watanabe, general manager of the Regional Market Development Department at Mitsubishi Corp., said, “With the rise of startups, future prospects previously viewed in a longer perspective have become feasible.” He has long engaged in market development in emerging countries.

When African countries achieve further economic growth after they have enough basic life infrastructure thanks to innovation brought by digital transformation, Watanabe predicts, “There would be fresh need for infrastructure construction.”

What Japanese companies have fostered in emerging markets — such as those in Asia — is a model to making inroads by establishing a similar supply chain to the one in Japan through rapidly constructing a manufacturing base at the local site.

However, successful experiences in the past would not work in an Africa that is achieving leapfrogging development led by consumer spending without going through a step-by-step industrial development process.

Seko noted, “Japanese companies have not been able to fully take business opportunities,” because they may be bound by conventional ideas. Such concerns prompted the government to call for the crafting of new market strategies.

Challenge of a pioneer

Rapid transformation has even prompted leading companies that already have an African presence to seek new strategies.

Yamaha Motor Co. is known as a pioneering firm in the African market. The company made inroads on the continent in the 1970s with its outboard engines and fishing boats, now operating businesses in 52 countries.

“We are trying to capture the African market from the new business perspective without being bound by past achievements,” said Shoji Shiraishi, fellow and senior general manager of the New Venture Business Development Section of Yamaha Motor’s Advanced Technology Center.

One idea from such a perspective is a new service utilizing mobility. In countries such as Uganda, Kenya and Tanzania, Yamaha Motor plans to start logistics and delivery services tailored to the local situation in cooperation with startups.

The company takes a hands-on approach, establishing businesses from scratch in East Africa, while in West Africa — an area regarded as “challenging” for Japanese firms — it seeks to promote its business through investment into ventures and startups.

“We’d like to develop businesses that make people wonder, ‘Yamaha Motor is engaging in such services?’ in the future,” Shiraishi said.

Digital technology would bring social transformation. Innovation, which is created through the process of overcoming social issues, has potential to be deployed globally starting from Africa, and it is not something only beneficial to a specific industry. As a result, future African business pursuits would mean much for many companies.