Today, we have an exciting development for our beautiful continent with regards to exports. It is coming from an ecommerce company. We love it and I am very excited. Everyone has been theorizing on how to empower local makers to have access to larger markets. Like an avalanche, some brilliant guys are here. The best ecommerce business in Africa today is MallforAfrica: an electronic mall that enables Africans to purchase items from international retailers, but has added a feature for Americans to also shop in Africa. It runs on the aggregation construct, unbounded by assets or market risks. It is unconstrained: a supremely top-grade asset-light business.
Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and the customers, the advertisers focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible. Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process
Through this Aggregation Construct, this company can scale without any limitation. It enjoys scalable advantages both in supply (the customers buy and ship for it) and distribution (it uses courier companies to actually ship to final destinations). In all fashions, this company is built for scale. You can put the scalable advantage at close to 0.8.
Why MallforAfrica Is Unique
Unlike other ecommerce operations in Africa, MallforAfrica does not have deep marginal cost problems. It can easily add a new user without the challenges associated with distribution costs. It is not the one distributing across the Atlantic. In a newsletter to Tekedia, we have thus:
DHL Express , the world’s leading international express services provider recently announced its partnership with MallforAfrica (www.MallForAfrica.com), the award-winning global e-commerce company, which will facilitate selling of made-in-Africa products to customers in the United States. Businesses can do so via the eBay platform powered by MallforAfrica. Through this partnership, DHL locations will serve as drop-off points for products destined for consumers in the United States. This will be the first time businesses in Africa can sell their locally manufactured products directly on eBay.
DHL Express currently handles inbound express delivery for MallforAfrica and has enabled its customers importing from the US to receive their packages seamlessly in Nigeria, Kenya, Rwanda and Ghana. This is a watershed partnership for African businesses as it allows them an avenue to trade on the global stage.
“We have been partners with DHL Express for many years and have tremendous trust in their ability to ship to our customers,” said Chris Folayan, CEO, MallforAfrica. “Both companies have a common goal of seeing African e-commerce businesses thrive on the global stage. We want to contribute to the future of e-commerce growth, African cross-border sales and most importantly, improve the lives of African artisanal arts, designs, crafts and more.”
MallforAfrica is Africa’s largest e-commerce enabler, providing Africans with a platform through which they can purchase items directly from over 200 international online retailers, such as Macy’s, eBay, Ralph Lauren, Net-a-Porter, Carters, GAP, and FarFetch – brands that, would otherwise be inaccessible to the African consumers. By managing every aspect of the order and return cycle, the MallforAfrica app offers its customers a simple, secure and convenient solution to online shopping directly from the best brands in the world.
“We are proud to be playing a crucial role in connecting African artists with American customers through MallforAfrica,” said Randy Buday, Regional Director West and Central Africa, DHL Express. “We look forward to supporting local artisans across Africa sell into America. ‘Brand Africa’ is something that has increased exponentially in popularity in recent years and this platform allows businesses to capitalize on international opportunities through seamless international trade.”
“As a business, we are focused on connecting African consumers and businesses to global opportunities. Digitalization has reduced the boundaries of doing business across borders – consumers are now able to access goods and services from pretty much anywhere in the world, and we are excited to be the ones facilitating this so African artisans can get access to the global audience they so deserve,” concluded Buday.
Simply, MallforAfrica now makes it possible for you to ship to Americans from Africa. So, it has completed the two-market phases (America to Africa, Africa to America).Yes, it is not just sending from U.S. to Africa, but also the other way. The impact of this could be extremely huge. You will see some art works, special leather works, shoes, clothes etc all finding markets in U.S. This is how you enable and empower people. MallforAfrica is doing so, at scale. By removing this distribution cost, Aba shoe can find its moments to expand into America. The Kano makers that make those special necklaces can find markets in U.S. The same applies to the brilliance of arts in Oshogbo and Ife. If the Yankees buy the products, MallforAfrica will deliver from Africa to them. The world is getting smaller, indeed.
I do not see any systemic risk in this company business model because it simply has a platform and everyone works on the pieces. It runs on the same framework as Google and Facebook: aggregation, carrying no asset risks. (It does operate warehouses by those are not inventories.) With the unbounded internet and unconstrained distribution connected with physical distributor partners like DHL, you will agree that there is nothing in front of MallforAfrica that will stop it from becoming a billion-dollar business very soon. It is the category-king right now, and it has the moments for itself. Any competitor will have to challenge it to take the top spot.
This company business model is peerless in the African ecommerce sector. All the problems I have noted in my Harvard Business Review piece on ecommerce do not apply here. Most aggregators have zero or negligible marginal costs and operate close to the optimal state of perfect Internet. There is only one ecommerce operator in Africa that has the features: that is MallforAfrica.
Of course, the complexity of the business has increased since it will start sourcing for opportunities in Africa with our infrastructure challenges. But this firm has developed and accumulated capabilities over the years. I do think it will manage the challenges of shipping from Africa to U.S. despite our logistical issues as it in-bounds items to DHL offices. Do not be surprised that they can appoint local firms to aggregate the sub-local supplies across cities. And just like that, MallforAfrica CEO Chris Folayan will focus on processing the invoices, counting the profits, with his usual smiles. People, treasure brilliance: this one is from home.