Why Asian Stores Often Sell African Products Cheaper Than African-Owned Stores: Understanding the Role of Economies of Scale

The main reason why many Asian stores sell African products at lower prices than African-owned stores isn’t due to greed; it’s largely because of economies of scale. Many assume it’s about profit margins, but that’s not the case. Most Asian stores place large, collective orders, which lowers the cost per unit. In contrast, many African stores place smaller, independent orders, making each item more expensive. Naturally, they still need to make a profit, which can make their prices appear higher.

It could be argued that the Western capitalist focus on individualism, which seeped into African communities during the colonial period, has steered us away from a communal and collective mindset. We’re often untrusting of one another, influenced by this approach and by divisive tribal politics. Africans need to think more collectively about progress and development, whether in the diaspora or back home. Our economic strength abroad hasn’t been as solid as other communities, largely because of this. To build stronger economic foundations, we need to work on unionizing and letting go of distrust toward our neighbours.