Ease of Business

Streamlined freight service helps goods flow for Zambian startups

By Derrick Silimina | VOL.11 November ·2019-11-06

There's a constant buzz about China's large population always being on the move. Martin Mweenda wants to be part of that buzz as he predicts China to become a booming market for Zambia's emerging entrepreneurs.

It is a tale of two businesspeople with different aspirations - one is a Zambian entrepreneur who needs to grow his business but lacks an efficient way of importing goods from the industrialized world. The other is a Chinese manufacturer and supplier of goods who is looking for new markets.

However, each of the two investors spends sleepless nights thinking of how best their ambitions could be achieved, yet each has the potential to provide solutions to the other's business objectives. All they need is to link up and cut a deal.

Luckily help is at hand. China Katundu Shipping Co., one of the Chinese freight companies based in the Zambian capital of Lusaka, provides its core business shipping and air transportation services to its clientele from China direct to Zambia.

Benefit to local entrepreneurs

Mweenda, 40, is a budding entrepreneur based in Lusaka's sprawling Town Center Market, specializing in mobile phone and telephone accessory retail business for the past five years.

"I started this business from scratch in 2011 by selling second-hand phones along Katondo Street and then after raising enough capital, I switched to cross border trading. Back then, I used to get phone accessories from South Africa and Tanzania," said Mweenda. But he later realized that using one of the Chinese couriers would allow him to import stock from China without having to go there.

"If I decide not to travel, the shipping company will do all the paperwork for me, thereby reducing costs I previously used to incur," he said.

From his humble beginnings at the bustling Katondo Street located in the heart of Lusaka metropolitan area, Mweenda, who is popularly known as "Huawei" among his peers due to his long time dealing in the Chinese mobile phone brands, now prefers to import his goods direct from China.

Christabel Muchindu, another upcoming entrepreneur who deals in second-hand clothing based at the COMESA market, southwest of Lusaka, told ChinAfrica that the Zambia-China bilateral trade relations are hugely positive as it is helping grow local entrepreneurs.

Asked to elaborate more on the viability and sustainability of the trade relations, Muchindu said that after three years in business, the services of the Chinese shipping and air freight company importing her goods has allowed her to realize more profit than before.

"For instance, if I use a groupage loading service from Guangzhou (in south China) to Lusaka, the cost is $260 per cubic meter, duty inclusive. Through China Katundu, I and other traders will be allowed to share container space and this is quite cost-effective. This allows more small scale businesspersons to import their goods at lower duty, which is a bonus to some of us emerging entrepreneurs," said Muchindu.

Considerate service

In a bid to provide a hassle-free trading environment for the majority of Zambian entrepreneurs like Muchindu and Mweenda, China Katundu has risen to the occasion.

With more than a decade of operational experience, the company now offers a considerate service for goods shipped on a loose cargo container from Guangzhou direct to Zambia, an incentive that attracts many small scale traders in Zambia.

"This means we sell space in our company container to individuals who have got goods to ship. The container comes under our company name and is cleared as such, thereby exempting clients whose cargo is on board from paying duty by themselves," China Katundu Marketing Spokesperson Diana Chimy told ChinAfrica.

This commercial idea not only reduces the amount of inconvenience faced by many traders when it comes to dealing with customs issues, but the services are also efficient.

Through its representative based in Guangzhou, Chimy explained, the company has also managed to invest in secure warehousing both in China and Zambia, as well as facilitate the process of Chinese visas and provide free airport pickups for any business person who intends to travel to China.

Statistics from the Global Entrepreneurship Index of 2017 show that Zambia is ranked 10th in Africa and 96th worldwide in terms of entrepreneurship.

Recently, Chinese Ambassador to Zambia Li Jie said the bilateral trade volume between China and Zambia has increased dramatically from $2.36 billion in 2017 to $5.07 billion in 2018.

Li also said China's focus in its economic cooperation with Zambia now promotes direct private sector investments that will not require any sovereign guarantees from the Zambian Government.

Li attributes the positive situation to the strength of the two country's economic partnerships.

Top investment destination

With over 1,000 Chinese enterprises investing more than $4 billion in Zambia, this is evidence that Zambia has become one of the top 10 destinations among all African countries for Chinese investors.

Chimy said her firm is known for its unique products and services that include visa arrangements to China (free if one considers loading a 40-foot container), free pickup from the airport upon arrival, warehousing of goods, group loading, sea/air/road freight, and sourcing of goods, among others.

Asked whether or not the company is violating any tax laws, Chimy said that on the contrary, the company has enough space at some shipping organizations and a wide-enough network with viable agents back in China, that helps speed up the process of cargo clearance.

Recently, the Bank of China in Zambia, in partnership with the Bank of China in the industrial city of Zhengzhou in central China's Henan Province, organized the Henan International Investment and Trade Fair, aimed at spurring cross border investment and trade projects, as well as strengthening domestic and overseas business cooperation.

The bank hosted over 400 small- and medium-sized entrepreneurs and other stakeholders from Zambia and across the globe in Zhengzhou. The region has gained momentum in economic growth and industrial restructuring over the past years in a bid to link investors to potential business destinations.

Mweenda has since implored fellow local entrepreneurs to double up their efforts because their Chinese counterparts have not grown their economy through appeasement.

"They have done so through shrewd business and sustainable deals underscored by hard work. Where others have been seeing challenges, they have been seeing opportunities, which they have gladly taken around the world. This is a strength that Zambians should collectively acquire instead of constantly wallowing in self-pity," he said.

China is indeed a global economic powerhouse, which has the muscle to influence world trade more than any other country, according to Mweenda. It is therefore not surprising that many Chinese companies seek opportunities to expand their investment ties with Africa where countries like Zambia will remain a preferred economic destination.

(Reporting from Zambia)

(Comments to niyanshuo@chinafrica.cn)