Distribution & Sales Channels

Due to the size of Zimbabwe’s market, most producers of goods sell their products to wholesalers who, in turn, sell to supermarket chains and specialized outlets in towns and general dealer shops in rural areas.  There is a comprehensive and well-developed distribution network serving the large supermarket chains in Zimbabwe.

Using an Agent or Distributor

The use of local agents and distributors by foreign firms is common, with companies’ selection of local representation dependent on their existing distribution infrastructure and ability to provide after-sales service.  A supplier’s ability to provide a service contract and spare parts is often a key determinant of success in the Zimbabwean market.  The cost and availability of financing are important in determining if a deal closes or not.  While direct sales are possible without local representation, this tends to occur on discrete projects, usually with external financing.  For ongoing business and sustained market penetration, working with Zimbabwean partners or representatives is highly recommended. 

Establishing an Office 

It is relatively easy to locate office space in Zimbabwe.  Nearly all firms have a headquarters office in Harare.  With the growing informalization of the economy, Harare has a significant amount of unused office space in the city center, although for security reasons, companies are increasingly leasing office space in the suburbs.  Despite the government’s stated intentions to improve the ease of doing business, registering a company takes significant time due to the relatively slow bureaucratic process (see the Investment Climate Statement below).

For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.

Franchising

Franchising is still relatively uncommon, although several South African firms have franchise operations in Zimbabwe and two U.S. fast food franchises (KFC and Pizza Hut) opened in 2014 and 2018, respectively.

Direct Marketing 

Direct marketing presents significant challenges in Zimbabwe.  Postal and telephone services are highly unreliable.  Mobile phone and Internet services have improved as fiber connectivity becomes more readily available and more users adopt broadband internet connections.

Joint Ventures/Licensing

The government encourages joint ventures.  For most of Zimbabwe’s post-independence history, joint ventures were the primary means of investing in the country.  Experience has shown, however, a joint venture can easily result in the foreign partner paying for all the costs despite not owning all the business. A careful examination of the assets and track records of local partners is highly recommended. 

Zimbabwe also practices licensing, although it is not widespread.  The scarcity and cost of capital are often significant obstacles to a successful business relationship.  The government amended the Indigenization and Economic Empowerment Act in 2018 which required firms to grant majority ownership to indigenous black Zimbabweans. However, the requirement of majority ownership to indigenous black Zimbabweans remains law under the Act for many sectors (reserved for local entrepreneurs), including public transport, retail and wholesale trade, barber shops, hair dressing and beauty salons, employment agencies, valet services, grain milling, bakeries, tobacco processing, advertising agencies, and provision of local arts and crafts. 

Express Delivery

There are several express delivery companies including DHL, FedEx Services and others that operate internationally.  Generally, it takes about five days for a standard package from Washington, D.C. to reach Harare.

Due Diligence

U.S. firms interested in doing business with Zimbabwean entities should conduct proper due diligence as a starting base for any business negotiation.  They should act prudently in completing due diligence reports prior to any proposed business deals.  The Economic and Commercial Section of the U.S. Embassy can provide valuable background information on some Zimbabwean firms through various services including International Company Profile (ICP) service to U.S. companies looking for prospective partners.