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October 2, 2019

Why the next tech superstars like Alibaba and Jack Ma could come from Africa (Alibaba eFounders Fellowship)

By Peng Sisi, first published on the China Africa Project.

One afternoon, in Nairobi, the capital of Kenya, a courier of the clothing e-commerce company, Sarai Afrique Fashion House, stopped his Boda and picked up a paper bag with a company logo. Running directly to the third floor of the apartment building, he took out dresses, jeans and bags ordered online by the customer in the morning. After the customer checked all of them, he asked the customer to sign the delivery note and then rushed to the next order.

This scene – that Chinese people cannot be more familiar with – is happening in Africa, thousands of miles away.

Sarai Afrique Fashion House, one of Kenya’s leading e-commerce fashion platforms, offers a wide range of the latest and best selections of women’s apparel from brands across the world.

Caroline Kuria with Jack Ma in Hangzhou, China.

In June 2018, Caroline Kuria, founder and CEO of Sarai Afrique Fashion House, participated in the two-week “eFounders Fellowship” program at Alibaba’s headquarters in Hangzhou, China, as a member of Class 3.

This initiative, co-sponsored by the Alibaba Group and the United Nations Conference on Trade and Development (UNCTAD), is the first step to fulfill the commitment Jack Ma, co-founder and former executive chair of Alibaba Group, made to empower 1,000 entrepreneurs in developing countries, 200 of whom will come from Africa, over the next five years.

Since its launch in November 2017, dozens of young African entrepreneurs like Kuria have visited China, with aspirations and hopes to learn from the experience of Alibaba. These young people are mostly from the fields of e-commerce, FinTech, and logistics.

“Together with UNCTAD, we want to empower Africa’s young entrepreneurs to not only succeed in their own ventures but to return home and show others how to build inclusive business models for the digital era,” said Ma.

The intensive training course in China allowed Kuria to broaden her business ideas. One year after returning to Nairobi, she shared what she learned via the eFounders Fellowship on her blog on the company’s website.

Kuria has been obsessed with fashion ever since she was a little kid. However, it is difficult to get good clothes in Africa at an affordable price. With a background in finance and marketing, she started Sarai Afrique Fashion House.

Workshop organized by Sarai Afrique Fashion House.

In December 2018, she opened the physical store, not only as a head office but also as a way to prove its credibility. “There are many concerns from customers in Kenya. They cannot easily trust e-commerce websites. But if there is a physical store, you cannot disappear the next day. Alibaba also has offline stores. That’s exactly what I learned from Alibaba. There are still people who want to come to the mall, with a desire to try on the clothes and see how they look before buying it.”

Kuria has seen a big increase in sales, both on the online platform and in the physical store. “So I think now people have more confidence in our company because they know where to find us and who we are. “

Giving back is another important lesson that she learned from the eFounders Fellowship. “Alibaba has used their platforms to improve their society, for example, they use their network to report missing children. And for me, I am also trying to incorporate this concept in my business. We are doing a few Corporate Social Responsibility (CSR) activities, such as teaching women to run online businesses. Empowering African women is our company’s mission. In Africa, women are regarded as the backbone of the family, even the backbone of the whole society. Educating women is exactly educating the whole village, the whole community. Therefore, we regularly organize workshops through which we hope to build women’s confidence in their own bodies”, said Kuria.

No longer the continent we imagined

People often look at Africa with prejudice. But today, Africa has become a land of passionate entrepreneurship.

According to a United Nations (UN) report, in 2050 Africa’s population will reach 1.3 billion. The purchasing power of the middle class will continue to increase, which would lay the foundation for the development of e-commerce.

While infrastructure is the core pillar of Africa’s development and undoubtedly one of the most important things for the government and private sector to invest in, the digital economy provides Africa with a leapfrogging possibility. As a fact, access to mobile phones is higher than access to electricity and clean water in Africa: there are about 460 million unique mobile subscribers in Sub-Saharan Africa. Over 90% of retail activities are in informal retail-like street vendors and markets, but now people are starting to shop from mobile phones, skipping formal retail.

Davy Nshuti, Head of Finance & Operations of HeHe, a Rwandan e-commerce company, also participated in the eFounders Fellowship program this year.

“I learned from Alibaba about ‘seeking cooperation rather than competition’, which was very important to me”, Nshuti said. “Alibaba’s Cainiao Network is a good example. It brings together those logistics companies. Now HeHe is also negotiating new business with potential partners, rather than competing with them.”

HeHe is currently preparing to set up offline experience stores to expand its e-commerce business to rural areas where smartphones are not widely available. They also plan to launch global purchasing and sales services that allow Rwandans to buy foreign goods and also allow Rwandan SMEs to sell their products abroad.

“Alibaba has given HeHe a lot of inspiration. The majority of Alibaba’s achievements have been similar to what we want to achieve, perhaps not in the same way, but the process is the same,” added Nshuti.

In October 2018, in Kigali, Alibaba Group and the government of Rwanda launched the Electronic World Trade Platform (eWTP), the first in Africa so far. Alibaba and Rwanda will cooperate in multiple fields such as e-commerce and electronic payments. The eFounders Fellowship Initiative is one of the areas of cooperation between the two parties.

Alibaba Group and the Rwandan Government unveil the first eWTP hub in Africa.

“My country Rwanda is definitely the top destination for starting a business”, said Frida Umurerwa, founder of Ghee for You. Ghee for You is the first natural cosmetics brand in Rwanda, promoting commerce through e-commerce business. They work with women cooperatives to transform fruits and grains into natural cosmetics ingredients. “Our objective is to create jobs and see our continent reducing agricultural loss while using fewer chemicals in our daily consumption, and protecting the natural impact of our continent”, said Frida.

During her stay in Hangzhou, the huge growth of Alibaba Group, the high level of Artificial Intelligence (AI) development and Alibaba’s inner philosophy to work with communities impressed Umurerwa a lot. “It’s like a wakeup call for us to appreciate the importance of data to develop our continent.”

Ma once said, “When I first came to Rwanda, I was shocked by its ability to embrace change. If every country was like Rwanda, think how powerful could Africa be.”

In recent years, emerging industries have sprung up in Rwanda. Guez Show, a 3D animation and graphics company, was the first to bring Digital Cinema Packaging to Rwanda. They were famously known for making the Transform Africa 2013 advert, which left many people all over the world mesmerized by how much Rwandans are capable of.

Nkurunziza Mufuth, founder and CEO of Guez Show, experienced cashless payment during the eFounders Fellowship in Hangzhou, a few months ago. “AliPay is really impressive. The whole city turns out to be cashless.”

The visit to Taobao Village allowed Nkurunziza to learn more about how Alibaba empowers people in rural areas through technology. He then got inspiration to pay more attention to people in villages. Now Guez Show is planning to teach villagers to do animation. “I believe villagers are as talented as people in the cities. They just lack opportunities to be exposed to knowledge and technology”, said Mufuth.

Nkurunziza experiencing bike sharing in Hangzhou, China.

After returning to Kigali, this ambitious entrepreneur immediately decided to start another subsidiary company. “Before, we actually put two business in one. I was hesitating whether to create a second business, I couldn’t convince myself of why I should create a second company, maybe ultimately it would just increase operational costs. But Alibaba’s history, which has been a journey encompassing e-commerce, logistics, FinTech, and offline stores, gave me a definite answer to all my concerns. Build a core business, build a big ecosystem and then use your ecosystem to expand. That’s what I learned from the huge Alibaba empire.”

In his vision, the Guez Group will have two subsidiary businesses in the near future, Guez Show and Guez Agent, which will provide B2C and B2B services respectively.

In addition to the training course, other eFounders also impressed Mufutha, especially the Ugandan entrepreneur Emmanuel Emodek, CEO of Chap Chap Africa.

Emmanuel dropped out of university and did various jobs to make a living. Finally he decided to set foot in the technology space, because he believed with technology he would influence many people. However, this would be a very tough journey. As late as 2015 he still hadn’t learned how to use a laptop. Even his email address was registered with the help of his girlfriend. With great willpower, he learned a lot by himself, and his company clearly has a bright future ahead of it unlike most of Uganda’s startups that have collapsed.

His company, Chap Chap Africa, is an organization in Uganda that aims to empower small and medium size enterprises, helping entrepreneurs better manage their businesses at low cost, and enabling them to easily access financial services.

As a leader in a fast-growing startup, Emmanuel has always encountered countless difficulties and challenges. At the beginning of 2019 he cracked under the strain of the work. Even some friends persuaded him to get out of his work. But the eFounders Fellowship was a big relief for him. He said, “I realize that those successful businessmen, like Jack Ma, have gone through all of the difficulties we are facing, which gives me more courage to continue my journey.”

“African-style” solutions

Successful entrepreneurs are well aware of the challenges of entrepreneurship in Africa. For example, Africa’s inadequate infrastructure forces companies to establish their own supply chains; lack of public education pushes companies to develop workers’ basic operational skills and advanced thinking ability. But these challenges also provide opportunities for companies to create great value.

In China, with smartphones and QR codes, payment processes have become not only cashless but also cardless. Now in Africa, the famous M-Pesa enables people to do remittances, loans, savings etc. on a basic phone. There are 280 million mobile money accounts in Sub-Saharan Africa, more than bank accounts.

All this makes it possible to start a mobile-based business.

Jean Anthony Onyait in front of Alibaba Campus.

Another FinTech Ugandan company, Akellobanker, focuses on farmers, especially women, which is closely related to the experiences of Jean Anthony Onyait, its founder, growing up in a village.

Over 80% of the Ugandan workforce relies on agriculture to make a living, yet less than 10% of commercial bank credit is channeled towards the agricultural sector. The commercial banks see lending to farmers as risky, due to lack of collateral and financial history to facilitate credit.

Akellobanker emerged in this context. By leveraging data & mobile technologies, Akellobanker offers easy access to tractor hire, improved seed, medical services and farm labor on credit. Their objective is to empower the poor with the power to change. “The course during the eFounders Fellowship made me more aware of the mission of our company. Alibaba has so many different products and services, but almost every product or service has risen to the challenge, rather than being emotionally driven”, said Onyait.

The gap of infrastructure in Africa is now growing, and 600 million African people still have no access to electricity. This gap has spurred several adventurous companies. Many African innovators are using mobile payments, solar technology, and battery storage technologies to bridge Africa’s infrastructure gap.

As Jack Ma said, “Africa today has tremendous opportunities. Africa, like China 19 years ago, has no good infrastructure, but with the opportunity of digitalization, Africa will be the most profitable land around the world.”

Christian Kakoba in discussion with other eFounders.

“It’s really inspiring to see some of the concepts of our company being realized in China. Alibaba keeps innovating the supply chain. We thought it would happen in Africa in the next 10 or 20 years, but I saw it happen already in countries like China. This validated lots of work that we are doing, making us feel that we are doing the right thing, we are on the right track”, as Christian Kakoba recalled from the unforgettable two weeks she spent at the Alibaba Campus.

Kakoba is the co-founder of BitHub Africa, a leading Blockchain Accelerator based in Kenya, who focuses on driving financial and energy access across Africa. The company intends to train 2,000 engineers by the year 2022 to support the solar access solution “Melanin Solar” and the larger distributed solutions ecosystem in Africa.

Successful African innovators are never blindly optimistic. They know more about the obstacles to success than anyone else and integrate long-term flexibility into their business models. “Faced with Africa’s soaring poverty and poor infrastructure, they feel they have the responsibility to solve these human problems”, said Kakoba.

Michael Maina, the co-founder of Lipa Later in Kenya, shared the same feeling. “In our cohort, we have founders from Chad, Cameroon, Botswana, Uganda, Rwanda…It’s a precious chance to interact with them on a deep level. I would like to say, it’s a fantastic group, an honest group, a very hungry group and of course a very hopeful group. They all have to overcome a lot of obstacles to get to where they are right now. No matter which African country they are from, they are all working hard in their own way for the development of this continent.”

Lipa Later poster.

Lipa Later is a credit facility that allows retailers to sell goods and services in affordable monthly installments. Their mission is to make living more affordable, thereby enabling people to achieve their dreams.

Maina also mentioned, “Jack Ma is the idol of African youth. From nothing initially to the present success, his business journey always encourages African entrepreneurs to move forward.”

Aside from the Fellowship, in August 2018 Jack Ma announced the launch of the Africa Netpreneur Prize which would award US$10 million to 100 African entrepreneurs over the next 10 years, in order to support the next generation of young entrepreneurs across Africa.

In exchanges with African students, Jack Ma mentioned the word “hope” more than once. He believes that these students are the seeds of Africa’s business future.

“I hope in the next 20 years, there will be at least 100 Alibaba and 1,000 Jack Ma in Africa.”

In fact, these entrepreneurs are the epitome of another Africa: entrepreneurship, characterized by digitalization and technology, is in full swing in the land which is often labeled as “barren”, “war-torn”, “disease-ridden” and “hopeless”.

The Chinese logistics industry has made remarkable progress in the past few years, while in Africa, express delivery has begun to use commercial drones: hundreds of blood bags are transported by drones to dozens of clinics in western Rwanda every day, the first such use in the world.

The world’s technology giants have long regarded Africa as a test field: Google’s high-flying balloons, Facebook’s solar-powered drones, both of them hope to provide lower-cost and high-speed wireless Internet accessibility to rural Africa.

When the VC/PE and technology circles in China discuss their own discourse systems and ecosystems, the representative Chinese enterprises such as Huawei and Tecno Mobile can already point to over ten years of experience working in Africa, and they are playing an important role for the future of Africa.

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