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There has been plenty of excitement around Jumia, the e-commerce company which became something of a flawed Rorschach test for how one defines African startups.
The debate around Jumia came to a head in the run-up to its largely successful initial public offering on the New York Stock Exchange. It was “Africa’s Amazon” in many headlines in international press trying to get their readers to quickly understand why this retailer was worth reading about.
E-commerce is often discussed in the context of consumers and customer satisfaction but for many investors and analysts most of their focus is spent looking under the hood trying to understand how the retailer, which they really see as a logistics company, manages its supply chain.
This is important in every market but especially vital in the context of developing markets, where logistics infrastructure is often inadequate and in markets which are by and large informal without established supply chains.
For the last three years Nairobi-based startup Sokowatch has been tackling what it sees as a huge opportunity by developing business-to-business (B2B) e-commerce supply chains for retailers in Africa’s informal markets to work more efficiently with large FMCG suppliers including Unilever and Procter & Gamble. These informal retailers can order their goods by SMS, phone or mobile app.
By aggregating orders for independent retailers and negotiating better prices from suppliers, Sokowatch primarily generates revenue by taking a cut off the savings its making for its clients. It doesn’t stop there. The startup is able to collect plenty of proprietary client data and use that to offer lines of credit and other financial services.
Sokowatch, which raised $2 million in seed funding a year ago, says it has delivered 500,000 orders to over 10,000 retailers in Kenya and Tanzania since 2016 and is now expanding to Uganda and Rwanda. A source familiar with Sokowatch says its “rapid growth” means there’s a good chance it will raise for Series A before the end of the year.
Improving efficiencies in informal sectors which account for as much as between 40% to 70% of many African economies is a potentially rewarding opportunity for any business that can get it right.
Sokowatch, which estimates there are 10 million informal retailers in Sub Saharan Africa, points to the B2B operations of Alibaba in China and Udaan in India as evidence of what’s possible. If you’re not going to be the Amazon of Africa trying to be the Alibaba of Africa is no mean feat either.
— Yinka Adegoke, Quartz Africa editor
Stories from this week
A journalist returned to Somalia to tell positive stories—then terrorists killed her. Somali-Canadian journalist Hodan Nalayeh became a household name among Somalis at home and in the diaspora for the hopeful and uplifting stories she told about the country. Following her killing, Abdi Latif Dahir wrote about her life and legacy He also spoke with Al Jazeera‘s The Stream about her work.
The African states defending China’s mass detention of Muslims. A million or more ethnic Uyghur Muslims are being held in forced re-education camps in the restive Xinjiang region in north-western China. Ambassadors of 37 countries recently signed a letter praising these measures, including representatives from 16 African states some of them Muslim-majority countries.
Beyoncé’s “Lion King” soundtrack is set to cement Afrobeats in the global mainstream. The highly anticipated Disney album, executive produced by Beyoncé, is led by top Afrobeats artists alongside other leading African and American stars. Haleluya Hadero explains that while Afrobeats has become a regular feature of dance floors around the world in recent years, the new soundtrack could be a game-changer for the longterm.
Off-grid renewable energy is helping tackle two of Africa’s biggest problems. Renewable energy products have emerged across Africa as viable solutions to the continent’s low electrification rate. But as well as powering homes, the expansion of these off-grid energy firms means they’ve also had a role in tackling Africa’s unemployment challenge.
Trump’s clampdown on US visas for Nigerians is cultivating fear—and fake news. Nigerians have felt the brunt of the Trump administration’s tighter immigration policies which include scrapping a visa interview waiver program. But, as Yomi Kazeem explains, the policies are also having an unintended effect of triggering apprehension-fueled rumors among Nigerian travelers.
African soccer’s “Lions”, “Elephants” and “Eagles” could raise awareness of the continent’s conservation battles. The African Cup of Nations soccer tournament offered reminders of soccer’s potency as a cultural unifier and the passion fans on the continent have for their beloved national teams. But beyond stadiums, African national teams nicknamed after endangered wildlife can also be tools to boost conservation awareness to a mass audience.
Chart of the Week
Africa is at least five years away from faster 4G mobile networks having an impact. Faster 4G networks accounted for just 7% of mobile connections across Sub Saharan Africa at the end of 2018, much lower than the global average of 44%. Sharp progress is not on the cards either as 4G networks are projected to still account for less than a quarter of connections by 2025. The region will add over 160 million by 2025 dominated by its largest countries.
Other Things We Liked
How the US-China conflict over Huawei plays out for Africa. Rather than resentful silence, African leaders have been offering full-throated support for China’s beleaguered telecoms giant Huawei even as the US takes aim at it, notes Cobus van Staden in The Africa Report. The reason? In Africa “the choice isn’t between Huawei and another contractor, but between Huawei and no internet at all.”
Targeting gender discrimination in South Africa requires more action than manifestos. In recent months, South Africa’s Caster Semenya has drawn global attention to gender discrimination in athletics particularly by international athletics bodies. But domestically, Chantelle Gray writes for New Frame, solving the country’s gender-based problems can only be achieved outside the political structure which first created them.
A Nigerian economist’s take on Zimbabwe’s currency mishaps. On a week-long visit to Harare during Zimbabwe’s recent foreign currency ban, Nigerian economist Nonso Obikili observed the erosion of trust in authorities and how it presents challenges for the adoption of the country’s new currency. “To say it was confusing would be putting it lightly. I could spend US dollars but, as I was advised, getting change would be difficult if I didn’t have small bills.”
How African Communists agitated against imperialism and colonialism in pre-Hitler Germany. Elite Cameroonian and Togolese families sent their children in the early 20th century to study in European states like Germany. But as Robbie Aitken finds for Jacobin, their experiences of exclusion and discrimination pushed some like Cameroon-born Joseph Ekwe Bilé into anti-colonial activism in Berlin.
Empowering South African Women Entrepreneurs. Young South African women entrepreneurs with viable business ideas, or startups in the STEM, commercial or creative fields are encouraged to apply for the US embassy’s Academy of Women Entrepreneurs program. (Jul. 26)
Calling East African Organizations. East African organizations with innovative projects, particularly in Health, Innovation in ICT, Agriculture, Trade, and Tourism are encouraged to apply to IIDEA’s small-scale regional integration program for technical and financial support on their projects. (Jul. 30)
Building African changemakers. Young Nigerian social innovators with current ventures in operations can apply to LEAP Africa’s Social Innovators Programme for a year-long fellowship offering training and mentorship. (Aug. 4)
Keep an eye on
N’GOLÁ Biennial of Arts and Culture Festival (Jul. 26). African artists, designers and curators will gather in São Tomé & Príncipe for workshops and performances to launch the 8th Biennial of Arts and Culture which runs till Aug.18.
Africa’s Agri-prenuers Summit (Jul. 26-27). Agribusiness leaders will gather in Nairobi for sessions on working agribusiness plans, regional markets, and networking sessions.
*This brief was produced while listening to The Crossing by Johnny Clegg (South Africa). Rest in Peace. [Spotify]
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