With the proliferation of mobile phones and increased access to the internet, e-business and technological entrepreneurship is revolutionising and changing many lives in Africa.
The internet has made online transactions from the comfort of mobile phones, tablets and computers much easier.
This widening tech landscape has brought with it a new and exciting breed of tech and e-commerce firms while other existing ones have further innovated to tap into the boom.
E-commerce is increasingly popular with many busy middle and upper class Africans, who want to do a huge chunk of their shopping online.
In countries such as South Africa where e-commerce has been robust for years, a recent survey by Effective Media found that the most popular items purchased online were airline and event tickets, and books.
Some of the leading firms that have achieved relative success with tech-based and e-commerce ventures include:
• JUMIA online: The online retailer has shown impressive growth since it was started in 2012 in Nigeria, to become Africa’s leading online shopping store. The region’s answer to eBay was begun by co-founders TundeKehinde and his Ghanaian partner Raphael Afaedor who saw a gap in organised retail especially among the middle class in the country.
The firm is now Nigeria’s most popular online retailer and has now fanned out to other parts of Africa including Cote d’Ivoire, Morocco and Egypt. It also opened its doors in Kenya and Uganda.
The store has a wide range of products including fashion, electronics, cosmetics and home appliances. Customers have the increasingly popular option to pay on delivery.
Kehinde and Afaedor have since sold their stake in the widely recognised (it won the best Online Retail Brand of the Year award in 2014) firm to Africa Internet Holdings.
• Kalahari.com: South Africa’s biggest online retailer is owned by multinational Naspers. It is also one of the country’s oldest e-commerce businesses, having set up in 1998. It provides a large array of products for its customers, from DVD’s, video games, cameras and eBooks to school books, pets, garden tools and music.
A 2014 research study, the “South African e-Commerce Report”, indicated that the site had a unique audience of 992,420 as at December 2013, the highest number of online South African visitors. Only US-based retail giant Amazon came a close second with a unique audience of 935,858.
The survey also found that Kalahari.com was the online retail store most South Africans were aware of, as well as being the top site that most of those surveyed have purchased from.
Naspers is aggressively channelling more resources to the company, though attempts to crack the Kenyan and Nigerian market have so far been less than successful.
• iROKO partners: Co-founded in 2010 by Nigerian CEO Jason Njoku and Bastian Gotter, the entertainment company focuses on distributing Nigerian content online. It’s most successful platform, iRokotv, is a premium web-platform for streaming Nigerian films (at a fee) to users around the world, a lot like America’s Netflix. The company is currently the world’s premier distributor for Nollywood films online, with half of its one million monthly visitors coming from the diaspora.
According to iRoko, their business model is simple: they purchase the online licences of movies and music directly from producers and recording artists and stream them online to a global diaspora audience.
Other online brands under iRoko include iRoking, a free African music streaming service, NollywoodLove and YorubaLove, both of which are YouTube-based services.
The company continues to grow its online subscriber base, but Njoku cites suspicion by banks as a problem with many suspicious of regular payments, fearing fraud.
iRoko plans to start marketing its products across the continent, with a view to including non-Nigerians among its subscriber base as the popularity of Nigerian films and music continues to grow. It has offices in Lagos, Johannesburg and London.
• Konga: Inspired by the success of e-commerce in other parts of world as well as that of his other start up DealDey, Simdul Shagaya founded Konga.com in July 2012, a Nigerian e-commerce retail company. It operates much like Sahara.com and Jumia online. The young company’s viability attracted financing from Naspers (which owns SA’s Kalahari) and Investment AB Kinnevik.
According to Shagayua, Konga has created over 500 jobs so far. He believes e-commerce will contribute 5 to 10 per cent of Nigerian GDP in the future.
So how does Konga’s commercial model work? Once a customer places an order on the site, Konga in turn places an order with the person selling the good who then delivers it to their shipping partners like DHL or FedEx for shipping to the customer.
The success of Konga relies on Nigeria’s internet penetration which currently stands at 20 per cent. Unlike Jumia which is spreading it’s reach into Africa, Shagayua feels that the way forward for Konga to conquer the Nigerian market first.
• Woothemes: Founded by South African Adii Pienaar, Woothemes designs and develops customisable premium themes and plugins for international blogging platform Wordpress. It now consists of an international team of designers and developers offering a large catalogue of themes that enrich the experience of hundreds of thousands of Wordpress users, at a price. The collection includes themes suited for personal, business, portfolio and commercial blogs and go for $399. The company currently makes over $3 million in revenues annually.
• Fatboy Animations: Founded by Kenyan Mike Muthiga in 2010, the Nairobi-based company offers a variety of services including web animations, TV commercials, infomercials, motion graphics, web design, social media activation, app development and more. It specialises in making adverts and is probably best known for its 3D animation adverts made for local Kenyan telecoms giants Jamii Telkom and Safaricom.
• Interswitch Limited: The Nigerian company, established by Mitchell Elegbe in 2002, is an integrated payment and transaction processing company. Its products include technology integration, advisory services, processing transactions and payment infrastructure to the Nigerian government, banks and corporate organisations. It provides online transaction switching that allows its clients to access their funds in banks in Nigeria via payment channels such as bank ATMs, Point of Sale terminals, Mobile Phones, Web and Bank Branches.
Interswitch has made its foray into other parts of Africa such as Uganda and Gambia and plans to keep growing within the region. It entered Uganda by acquiring a 60 per cent stake in Bankom Ltd, the only company in Uganda at the time that carried out a similar business as Interswitch.
Elegbe’s company was inspired by the difficulty surrounding online payments in Nigeria at the time as most preferred to make cash payments due to lack of trust in online transactions.
Interswitch currently has 20 million customers across Africa, with a majority of them coming from Nigeria. Elegbe says the company is valued at around $163 million, up from $1.2 million with which it was originally financed with in bank loans from several banks (some of the Nigerian banks that financed the venture still hold a stake in the company).
In 2010, UK-based private equity and venture capital firm Helios Investment Partners, International Finance Corporation and Adlevo Capital acquired over 60% of the company’s shares. Elegbe was retained as CEO.
• RLabs: A non-profit, Reconstructed Living Labs was founded by South African social entrepreneur Marlon Parker. It describes itself as a global movement and registered social enterprise that provides innovative solutions to various complex problems.
It began in South Africa and is currently operating in 21 countries in Africa, Europe, Asia and South America where it builds local communities and empowering the youth by using the country’s IT sector for social development.
RLabs says it offers a creative environment for communities (labs) to access training and development programmes and social innovation incubation. It also offers an international internship where students can gain first-hand experience by working with a Social Enterprise in an emerging market.
What impact has RLabs had?
It has reached over 27,000 people with its skills training in tech, leadership and other programmes and says its start up UUSI has connected thousands of South Africans with work opportunities.
• Webtribe: A Nairobi-based software development and consultancy company, it specialises in payment, management and card-based systems and integrations. Its best known and flagship product, JamboPay, an online payment gateway that allows users to securely make and receive payments through mobile phones on the internet. It can also be used by online shoppers to make payments and by other users using credit cards, MasterCard Debit, bank payments and mobile money payment methods (Airtel Money, YUCash and Mpesa).
It was established by Kenyan tech entrepreneur Danson Muchemi in 2009. In June, through the JamboPay platform, Webtribe won a lucrative bid to provide an online payments system for fees, rates, permits and other bills for the city authorities who are looking to curb fraud and minimise revenue leaks
Muchemi plans to extend Webtribe’s reach to other parts of Africa, and is already operating in Senegal and Tanzania. The Dakar office would be its West Africa expansion base.