Source: Great Wave;  By Hu Mo

Exporting stationery to Africa seems like an impossible task.

In most people's perception, African children are often seen playing and frolicking in groups in villages, making stationery seem out of place in such scenes. However, the market for stationery in Africa is not only large but has also been targeted by Chinese stationery companies early on.

On one hand, Africa has a population size comparable to China, with a higher proportion of young people and children. Many countries have a fertility rate above 5, which is unmatched by most countries in the world.

On the other hand, many African countries now place great emphasis on education. Countries like Ethiopia, Nigeria, and South Africa have introduced education-related policies in recent years. Even Zimbabwe, long considered a backward example, has implemented free compulsory education in primary and secondary schools, with most schools also having medical rooms.

In 2016, China relaxed its two-child policy, which has resulted in an increase in the number of primary and secondary school students. Many primary schools are experiencing a scramble for seats. However, it is widely anticipated that in a few years, primary schools will face a significant shortage of students—an early sign of which is the wave of kindergarten closures.

Against this backdrop, the market prospects for Chinese stationery domestically are not optimistic, necessitating the search for larger markets.

By various indicators, Africa can be considered a blue ocean market with significant value.

Previously, a blogger visited stationery stores in Africa and found that the prices of many stationery items were several times higher than those in China. A key reason for this is that the wealth gap in Africa is enormous. Wealthy individuals typically attend private schools and are the main consumers of stationery. In fact, the high prices of stationery and books are not intended for the poor.

Emphasizing education means a large market, and high prices mean high profits. Chinese stationery has a great chance of success in Africa. Moreover, while Chinese stationery companies gain economic benefits, they can also help make local stationery products more reasonably priced, reducing the cost of education for poor children in Africa, which can be considered a significant good deed.

Chinese Stationery Going Global

Due to multiple factors, domestic stationery sales have become very unfavorable in recent years.

According to data from the China Pen Association, in 2020, the pen-making industry, consisting of 212 enterprises above a designated size, achieved a main business income of 14.5 billion yuan, a year-on-year decrease of 11% due to the impact of the pandemic. In 2021, with the pandemic's impact still ongoing and compounded by the "double reduction" policy, the domestic pen-making industry, consisting of 217 enterprises above a designated size, achieved a main business income of 15 billion yuan, still operating at a low level.

According to data published in the China Industrial Statistics Yearbook, in 2023, the operating income of enterprises above a designated size in China's stationery industry for pen manufacturing was approximately 18.8 billion yuan, with a growth rate of only single digits, far below industry expectations for recovery.

The subtle changes in the domestic stationery industry can also be indirectly confirmed by the performance of listed companies.

Take M&G Stationery, the leading company in the domestic stationery market, as an example. In 2019, M&G Stationery's writing tools and student stationery achieved revenues of 2.187 billion yuan and 2.645 billion yuan, respectively, with year-on-year growth rates of 12.36% and 42.35%. At that time, the entire industry was still a high-growth market.

However, in 2020, its two business segments achieved revenues of 2.28 billion yuan and 2.706 billion yuan, with growth rates falling to 4.29% and 2.29%. By 2022, during the most unusual circumstances and with the impact of the double reduction policy, its performance saw a significant decline, marking the end of the high-growth era. Last year, these two business segments achieved revenues of 2.273 billion yuan and 3.466 billion yuan, with year-on-year growth rates of 4.83% and 8.58%.

As the industry leader, M&G has indeed shown some resilience during the downturn, but other companies have not fared as well. For example, Xinhua Media's educational supplies revenue from 2019 to 2023 was 70.68 million yuan, 54.16 million yuan, 44.37 million yuan, 26.01 million yuan, and 17.2 million yuan, respectively, showing a continuous decline.

To combat the downward trend in the industry, many companies have had to start rolling out various new strategies, such as launching new products in collaboration with famous cartoon characters, and even introducing flashy stationery items like mini vacuum cleaners for eraser shavings, desktop cleaners, and electric pencil sharpeners.

These measures have limited effect and are far from enough to counter the market's concerns about the future decline in the newborn population. According to data released by the Beijing Municipal Education Commission, the number of primary school students in Beijing was around 850,000 in 2015, and this number increased to around 1.08 million in 2023. Benefiting from the earlier relaxation of the two-child policy, the number of students has shown an upward trend in recent years.

However, the sharp decline in China's birth population cannot be reversed. In 2020, China's newborn population fell to 12 million, and last year it was only 9.02 million. This means that the domestic stationery market will continue to shrink in the future.

Stationery manufacturers, relying on the price advantage of large-scale domestic production, have begun to seek opportunities overseas. Over the past year, the total export value of China's educational and office supplies reached 38.929 billion USD, the highest level in the past five years.

Among them, the top ten countries for the export value of China's educational and office supplies are the United States, Japan, Malaysia, Australia, the United Kingdom, Vietnam, Singapore, Germany, Mexico, and the Russian Federation. The total export value to these ten countries is 18.192 billion USD, accounting for approximately 46.73% of China's total export value of educational and office supplies.

The unexpected rise of Africa is the biggest surprise among them. This region is becoming a key focus for Chinese stationery distributors to accelerate their layout and is even considered to be the fastest-growing market for Chinese stationery exports in the future. Many domestic traders have established multiple distribution networks in Africa, showing a strong determination to expand.

Why Africa?

Answering why stationery distributors are eyeing the African market is actually not difficult. The essence of product expansion overseas is that the market space is large enough, the growth potential is strong enough, and there is a potential difference to achieve a dimensionality reduction strike. The African market just meets these points.

In terms of total population, Africa is similar to China, both around 1.4 billion. However, half of Africa's population is under 25 years old, indicating a very healthy population structure.

From the perspective of birth rate, Africa confirms the rule that "the poorer, the more able to give birth; the poorer, the more love to give birth." According to traditional secular views in Africa, a large population symbolizes the prosperity of the tribe, and the most direct way to increase the population is to have more children. — In the context of poor medical conditions, the mortality rate cannot be controlled. For those African farming areas, having one more child means one more labor force, so they will try to have as many children as possible.

Currently, in African countries such as Niger, Nigeria, Somalia, Congo (Brazzaville), Congo (Kinshasa), Angola, Tanzania, and Zambia, the fertility rate is above 4, a number that many other countries cannot match.

In contrast, China has a fertility rate of only 1.05, Japan 1.2, South Korea has dropped to 0.72, and Vietnam is at 1.96. The fertility rates in developed countries in Europe and America are also not ideal, with Spain's average fertility rate at only 1.16, Italy at 1.24, Poland at 1.29, while France and the United States are relatively higher at 1.68 and 1.62 respectively.

A good birth rate ensures the growth rate of the total population. The population of the African continent accounts for about one-sixth of the world's total population. Since World War II, Africa has entered an era of rapid population growth, once becoming the region with the fastest population growth in the world. Currently, Africa's annual population growth rate is as high as 2.5%, more than three times the global average growth rate.

According to research by the Global Cities Institute (GCI) at the University of Toronto in Canada, it is expected that by 2100, the three largest cities in the world by population will all be in Africa. They are Lagos in Nigeria, Kinshasa in the Democratic Republic of the Congo, and Dar es Salaam in Tanzania.

Perhaps in the eyes of many, due to poverty, the African region pays very limited attention to education. In fact, nowadays, various African countries are quite focused on educational development. For instance, Ethiopia has released the "Education and Training Policy" committed to expanding the coverage of basic education, Nigeria has proposed the goal of improving education quality in its "Education 2030 Vision" and has also strengthened support for girls' education to promote gender equality. South Africa has launched the "National Development Plan 2030" aimed at enhancing overall education levels through teacher training, curriculum improvement, and school infrastructure construction.

Zimbabwe, known for its inflation, also places great emphasis on education, with primary and secondary schools generally implementing free compulsory education.

According to data from UNESCO, the current enrollment rate in African primary schools is approaching 90%, and countries like Côte d'Ivoire are striving for a 100% transition rate from primary to secondary school.

The large birth population combined with the increase in education rates makes the African stationery market full of endless possibilities. The total revenue of the African stationery industry is expected to reach 2.235 billion USD, with an average annual growth rate of 24.76% from 2024 to 2027. By 2027, the size of the African stationery market is expected to grow to 4.287 billion USD.

However, there is no stationery industry production in Africa, and products mainly rely on imports. With a significant price advantage over Japanese and Western products, the Chinese stationery industry naturally turns its attention to Africa.

Unique Significance

A blogger on Douyin once conducted an on-site visit to a stationery store in Kinshasa, Africa, and found that the local stationery prices were extremely exaggerated: a whiteboard marker cost 6 RMB (about six times the domestic price), and this was considered cheap. The blogger also saw more expensive whiteboard markers in the store, costing over 10 RMB each. Other stationery items in the store were similarly expensive.

Introducing the background of Kinshasa would make people more empathetic to such prices. Kinshasa is the capital of Congo, where many people live below the poverty line due to the turbulent political situation. Fishermen near the Congo River earn only about 2 USD a day, and the local economic level is far behind what many Chinese people can imagine.

Such exaggerated prices indicate that there is still a lot of room in the African stationery market. Industry insiders have revealed that domestic gel pens, if purchased in bulk quantities of tens of thousands, cost about 0.2 RMB each. When sold to African distributors, the price reaches 2 RMB, a tenfold difference.

But on the other hand, if the local area is so poor, why are stationery prices so high? Aren't they afraid that locals can't afford them?

In reality, many people can afford them. Africa is not a place without any wealth accumulation but a region with a huge wealth gap. Urban areas often have better infrastructure, education, and employment opportunities. It is not uncommon to see local tycoons wearing big gold hats, driving gold-plated cars, and having fun on luxury yachts, while the number of poor people in various countries is even higher, with many still worrying about their daily expenses.

Take Kinshasa, for example. Congo itself is rich in mineral resources, and controlling these resources means wealth. Being a mid-level leader in the industry chain offers a chance to enjoy prosperity. Across the Congo River is a wealthy area where each household typically has assets worth millions of dollars, and luxury cars and goods are everywhere.

In such a poor region, the fundamental reason why stationery prices can be so high is that these products are not targeted at families earning 2 USD a day but at the wealthy locals.

This is similar to how a Santana car could sell for 200,000 RMB over twenty years ago, comparable to the housing prices in first-tier cities. These product prices are not determined by the local average purchasing power but by the more realistic supply and demand relationship in the context of Africa's inability to produce stationery.

In Africa, wealthy families generally choose private schools, and they are the main target audience for high-priced stationery and books.

As a result, the significance of Chinese stationery going overseas to Africa has become more concrete: on one hand, it is indeed profitable, but equally important is that the influx of low-cost Chinese stationery will inevitably make local stationery prices more reasonable.

By then, children who once couldn't afford to go to school will have a better chance of affording stationery and reading books.