In Angola 2007/2008 - (Page 20) DISTRIBUTION CHANNELS Distribution Channels – Getting Goods to Market Angola, with its immense potential, is said to have the opportunity to become the biggest economy south of the Sahara. While the country currently imports many of its basic requirements, including food and consumer, capital, and intermediate goods, the government and private sector have embarked on a reconstruction program expected to result in further transformation of the economy. For the investor, this means the evolution of both the informal and formal distribution channels. Informal Market Although reliable statistics don’t exist, it is a widely accepted fact that the informal market provides the major cities of Angola with basic consumption goods. It is also the largest source of employment in the country. One of the most widely known wholesale markets is the Roque Santeiro, more commonly known as “Roque.” Located in Luanda, the Roque is also one of the largest informal markets in all Africa, employs tens of thousands of vendors, and is frequented by up to a million people every day. More important than its retail function is its position as Angola’s main wholesale market. Most vendors from other markets, and even many shopkeepers, will say that they actually bought their merchandise that same day at the Roque. One can find everything at the market, from staples such as livestock, fish, fresh produce, and dried cassava, to luxury items like electronics, auto tires, and furniture, to services and lifestyle goods such as hair styling, music, and movies. The way the market works is simple despite the complexity of the number of goods and individuals involved. Once goods are produced or imported, they are taken from warehouses to the wholesale market where shopkeepers, vendors from other markets, and Zungueiras (mobile vendors) purchase their inventories to take to the consumers. With its vast numbers of wholesalers, vendors, and consumers, the informal market in Luanda was once considered the place where commodity prices and the informal exchange rates were set. Although this can no longer be said, it is still a vital component of Angola’s economy. And on the horizon, the transformation to a more formalized market – where more goods can reach more people more efficiently – is inevitable. Formal Market The formal market represents a rapidly-growing sector of the economy. While the formal market was once limited to larger metropolitan areas, manufacturers and importers are broadening their sales network to include a greater number of cities and towns. Distributing goods through this channel can take place in two ways. In both situations, the manufacturers and importers typically store goods in a warehouse located in the city. However, the sales channel varies depending on purchasing power and the size of the retail outlet. Larger retail businesses have the luxury of a sales representative who visits regularly to take orders. The orders are then delivered to or picked up by the retail establishment. Some smaller shopkeepers and retail business owners operate on a cash and carry basis, and travel to the warehouse daily or weekly to purchase inventory. The government and private sectors are working to enrich the formal market through activities such as the Luanda International Trade Fair (FILDA). The fair provides opportunities for Angola to showcase its potential and establish links with other countries in the region and around the world. 20
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