Imported goods can enter Madagascar via air at Antananarivo’s Ivato International Airport or via sea at the ports of Toamasina (East), Mahajanga (West), Antsiranana (North), Toliara (South-West) and Fort Dauphin (South-East). Approximately 80 to 90 percent of containerized imports and exports transit through the country’s largest port at Toamasina. Products are then distributed by road, river, sea, or rail throughout the country. Distribution is often handled by the importing company or by wholesalers and retailers. Roads are poor across much of the country; some areas cannot be accessed by road during the rainy season from December to March. U.S. distribution and sales channels have no presence here, but they can tap into established marketing networks.

Seven major retail chains (grocery and home appliances) have a multi-city presence in the country. They are French (Score, Leader Price, and Super U), Chinese (Horizon Ivato/Sogecoa), Mauritian (Cosmos), and local (Kibo Cash and Carry, Shop Liantsoa), and distribute both local products as well as goods and brands sourced from several foreign countries.

Four chain stores - Sanifer, ABC Construction, Batimax, and Bricodis - dominate the import and distribution of hardware and building materials. They are owned by wealthy families that migrated to Madagascar from India and Pakistan over the last century.  

Using an Agent or Distributor

Given the complexity of the marketplace, the use of agents and distributors is recommended. Use of an agent or distributor is legally required for goods which need support services and/or strong after sale support.

Establishing an Office

Businesses may also establish a local office. The Economic Development Board of Madagascar (EDBM) provides online creation of a new company.

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

Though franchising is hardly a common marketing practice in Madagascar probably due to its initial cost, two franchising networks, KFC (fast food) and “Binastore” (cement and building materials), are striving to breakthrough.

Direct Marketing

Although there are exceptions, direct marketing still nascent, especially for U.S.-made products. Therefore, the Embassy encourages U.S. businesspersons to negotiate with local distributors and agents. Common avenues of advertising include billboards, posters, newspapers, radio, and television.

Joint Ventures/Licensing

Businesses may be established in Madagascar in various legal forms including a joint venture where the partners agree not to register the partnership with the Trade Court. A joint venture does not have legal personality. The partners agree on the duration, conditions of operation, shareholder rights and the subject of the venture. One or more managers manage the joint venture.

Express Delivery

Three international delivery companies, namely DHL, UPS and FEDEX, are present in Madagascar. These companies claim delivery times of 3 to 5 working days to deliver from large U.S. cities to the capital of Antananarivo. Domestic express companies provide extended services to many other cities within the country. The National Post Office and Colis Express SA remain the leading service providers for domestic express delivery.

Due Diligence

U.S. companies must perform appropriate due diligence on their business partners and agents. Professional accountants, taxes consultants, and law firms commonly perform due diligence in Madagascar, usually in areas of investment, joint venture/partnership, and loans.