Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.13/35263
- Formal and informal retail sectors in Africa: evolutionary or competing paradigns?
- The University of Newcastle. Faculty of Business & Law, Newcastle Graduate School of Business
- Interest in African business and its subsequent cultural, management and marketing needs has increased dramatically in the past decade. This is not a surprising development given, and as the editorial of the inaugural issue of the Journal of African Business (2000) correctly notes, "Africa with its 54 nations- 6 North African and 48 sub-Saharan, and a population of 700 million people and land mass four times the size of the United States has not reached its full potential in business. . .and despite its over abundance in resources, it has remained largely untapped." This editorial argues that Africa has the bulk of the world's diamonds and chronium, 50 percent of its gold, 90 percent of its cobalt, 40 percent of its platinum, 50 percent of its phosphates, 30 percent of its uranium and 40 percent of its potential hydroelectric power supply. In addition, Africa has 64 percent of the world's manganese, 13 percent of its copper, 50 percent of its palm oil, and 20 percent of the total petroleum traded in the world market, excluding the United States and Russia. These facts are reason enough for the growing interest in African business, which has led, among other things, to the growth in a number of relevant publications, such as a specialist joumal, the Journal of African Business, as well as the commissioning of this book, It is therefore appropriate to take stock of the literature in this field. In doing so we quickly realized that it was necessary to limit the scope of the task. Accordingly, we have limited the literature domain to that of retail and distribution marketing in Africa. Our method of review is to contrast the informal and formal retail sectors. A primary consideration is to describe and analyze the two retail sectors, with an emphasis on the dynamic evolution of the sectors over the past 30-40 years. However in the process we are confronted with two fundamental questions-to what extent is the informal sector simply an immature, early-form of the formal sector, implying that it is just a matter of time before it will evolve into something akin to the formal sector? Or, alternatively, can the informal retail sector be considered as a mature organizational form in its own right, one that actively competes with the formal sector? Our aim is to answer these questions, as shown in the subtitle of the chapter, namely is the informal sector an evolutionary or competing paradigm for retail distribution. Our review of the state-of-the-art of retail and distribution marketing is divided into the following sections. Firstly, we review the literature relating to the formal retail sector. In this section we concentrate on the private firm type formal sector as opposed to state controlled formal business enterprises. The latter are viewed as playing a less important role because, they are being "privatized" over much of Africa as part of the structural adjustment programs being enforced by the World Bank and the International Monetary Fund. Second we review the literature relating to the informal retail and distribution sector. Third we review the literature relating to the interface between the formal and the informal. The implications of our reviews are then made and finally we draw together the various conclusions.
- Dynamics of Marketing in African Nations p. 113-127
- Quorum Books
- Resource Type
- book chapter