- Volumes in Malawi and Zambia declined by 11% and 13%
- TV Sales and Home recoded a 10% volume growth in Q1 2025
- Increased competition from grey imports is a major concern impacting market share and pricing strategies
Harare- Axia Corporation, a diversified retail conglomerate, reported subdued performance in its regional markets of Malawi and Zambia, characterized by declining revenues and volumes.
The company's key performance indicators for Malawi revealed an 11% volume decline and a 13% revenue decline year over year . Primary drivers of this decline included grey market encroachment and supply chain disruptions.
A grey market, also known as a parallel market, refers to the trade of goods or services through unauthorized channels, often bypassing official distribution networks.
This phenomenon leads to lost sales, revenue erosion, and brand dilution for legitimate businesses. In Zimbabwe, particularly in areas such as Area 8 and Highglen, grey market operators are selling identical products at discounted prices, albeit of inferior quality.
The impact of the grey market on Axia Corporation has been significant, resulting in price sensitivity among consumers, erosion of profit margins, and compromised brand integrity.
The company also faced challenging market conditions in Zambia, where volumes declined 24% and revenue dropped 20% year on year. Currency depreciation, pricing pressures, and a tougher operating environment contributed to this decline.
Despite regional challenges, Axia Corporation reported positive segmental performance in some areas. TV Sales and Home recorded a 14% revenue growth and 10% volume growth year on year, driven by successful promotions.
Restapedic also achieved 22% revenue growth and 30% volume growth year-on-year (YoY), attributed to more competitive pricing while Transerv's revenue grew 25% YoY, despite a 4% volume decline.
However, DGA Zimbabwe experienced a significant decline, with revenue dropping 27% and volumes plummeting 57% YoY. This decline resulted from a joint venture formation with a major supplier, leading to sales no longer being consolidated. Legend Lounge reported a 1% revenue decline and static volumes.
Despite current challenges, Axia Corporation remains optimistic about improving market conditions in Zimbabwe and the region, driven by anticipated fiscal and monetary policy adjustments.
The company is confident that tightened fiscal and monetary measures will enhance the operating environment in the second quarter.
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