The PC market in East Africa strongly expanded in the first quarter of 2011, even as the worldwide PC market contracted and the pan-African market almost stagnated, according to a recent report by market research company IDC. While global PC shipments declined 3.2% year on year during the first three months of 2011 and the overall African PC market grew a marginal 1%, East Africa (including Kenya, Tanzania, Ethiopia, and Uganda) recorded a massive 76% growth in PC shipments. IDC expects that the East African PC market will further grow by about 35–45% in 2011 before cooling off in 2012.
According to the IDC report, the growth in Q1 2011 was fueled primarily by a healthy demand for notebooks, with Kenya showing the highest uptake. This quarter was a continuation of the dynamic development in 2010, supported by the resumption of commercial demand and strong advertising and promotion efforts by vendors, as well as their efforts to find new distribution channels and strengthen existing ones. This helped to stymie unofficial (gray market) shipments.
The report also said that consumer demand was dynamic in 2010 but relaxed in Q1 2011, due to a combination of factors that affected price levels, including unfavorable foreign exchange rates and inflationary pressures. In addition, competition between vendors caused consumer pricing to plateau, and thus prevented sellers from stimulating demand around attractive price points.
“We are continuing to see increased interest in the region from international investors, especially with Kenya’s new constitution, which is hoped to be fully implemented after the next general elections, Uganda’s oil discovery, and the formation of the East African Community (EAC) market, which has a combined population of over 130 million,” says IDC analyst Stanley Kamanguya. “Investors are looking at the region as the next frontier of growth, with Kenya as the hub. Political risk will remain a key issue for investors, however. The extent of consequences of events in North Africa and the Middle East remains unclear, which will affect the market in the short term.”