Here’s How Africa Can Leapfrog With eCommerce And Digital Trade Like China

By Dagny Zenovia

Hands typing on computer with graph on screen
Credit: RawPixel Nappy Co

The appeal of eCommerce is not only based on convenience and flexibility, it also has the ability to level the playing field in economics and opportunities. Throughout Africa, eCommerce is gradually expanding while balancing challenges and innovative solutions. There is an opportunity to avoid reinventing the wheel by learning from China’s Alibaba and the vastly profitable businesses in Africa that are owned by Chinese and Lebanese entrepreneurs.

The eCommerce Struggle

The eCommerce industry in Africa continues to trip as it learns to sprint. For example, Nigeria’s Gloo.ng, which was an eCommerce grocery service, pivoted in 2019 to e-procurement supplying large and medium businesses office supplies. In response to this pivot, Olumide Olusanya, founder of Gloo, shared that “the need for eCommerce is not strong enough, the total addressable market is too small, and it has high service delivery frictions.” 

One main challenge for eCommerce in Africa is logistics and courier services. Even though most businesses are resourceful in using Google Maps, WhatsApp, and location knowledgeable drivers, the lack of street addresses and unstable routes still hinders efficiency.

Another challenge is trust in online payments. Even though mobile payments are widely used across Africa, cybersecurity risks and the exclusivity of internet banking suffocates its effectiveness.

What Do Chinese, Lebanese, and Indian Entrepreneurs In Africa Do DIfferently?

According to Dr. Ola Brown, founder of Flying Doctors Healthcare Investment Company, there is a difference between economic terrorists and nimble ninjas in Nigeria. The economic terrorists are Nigerians who became rich through close associations with the Nigerian military government during the 1980s. On the contrary, nimble ninjas, who are apparently the Chinese, Lebanese, and Indian entrepreneurs in Nigeria, focus on scaling their business. This is done by “being patient with a long term view, focusing on customer trends, targetting the bottom of the pyramid, developing killer supply chains and distribution, and growing talent in-house.”

Does Alibaba Have The Answer?

Jack Ma founded Alibaba in 1999. When he first visited Africa, going to Kenya and Rwanda, in 2017 as a special adviser for the United Nations Conference on Trade and Development, he noted similarities between 2017 Africa and 1999 China. This included youth unemployment and lack of infrastructure. With the success of Alibaba, Jack Ma believes Africa can leapfrog “outdated systems, power structures, and models.”

Thus, the Alibaba Business School was created to provide new empowerment models for governments, entrepreneurs, youth, and women to leverage the digital economy. The school is currently applying this model in Rwanda. After hosting a New Economy Workshop for Rwandan high-ranking government officials, the Rwandan Utility and Regulation Association made investments in fibre infrastructure. Also, the Rwandan Development Board is working with the National Post Office to improve postal services. The school established the eFounders Fellowship. So far, 40 Rwandan entrepreneurs have received training. In September 2019, 22 Rwandan students studied the new four-year undergraduate course on cross-border eCommerce at the Alibaba Business School in Hangzhou, China.

Rwanda is the first African country to join the Electronic World Trade Platform initiative with Alibaba. James Kimonyo, Rwandan Ambassador to China, recently stated that Rwanda is “enjoying the best balance of cooperation with China in” Rwanda’s history thanks to digital trade.

Davy Nshuti, head of finance at HeHe, a Rwandan online shopping platform, attended a two-week eFounders Fellowship program by Alibaba. He shared the program helped him understand “the importance of culture in building a great company, the need of having common values as a team, and how to take partners on board.”

Finally, eCommerce and digital trade in Africa is capable of being successful and profitable for all concerned. Its progress depends more on infrastructure, which is a void that can become a business opportunity in itself. With the number of endless resources and accelerator programs dedicated to African entrepreneurs, the sprint will become smoother.

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