When Jack Ma first visited Africa in 2017, he was struck by the massive economic potential of the continent. Late that year, Alibaba and the UN invited 25 African entrepreneurs to participate in the eFounders Fellowship Program at Alibaba’s headquarters in China. One of those entrepreneurs was Jessica Anuna, CEO and Founder of Klasha, the first online marketplace to offer affordable fast fashion to millennials in all 54 countries in Africa.
At just 27 years old, Anuna is already a veteran of Amazon, Net-A-Porter, Shopify and the Techstars Dubai Accelerator program, and she has just been named to the Forbes Africa 30 Under 30 list. At Klasha, she leads an all-female team of millennials (the entire team is age 27 or under) selling to other millennials.
Here’s what Anuna says international retailers must know about doing business in Africa:
- “There has never been a better time to start a business in Africa,” Anuna says, because the continent’s massive, young population and economy provide long-term prospects for growth. Africa has a population of 1.2 billion people, 50% of whom are under 30 years old, and the average age on the continent is just 19. By 2025, half the world’s working population will live in Africa, making it the world’s biggest emerging market, Anuna says.
- The middle class is growing exponentially, but many African consumers still go abroad to the UK or the US to do their shopping, and then bring goods back to the continent. That means there is an enormous opportunity for retailers to grow in scale and introduce international brands to African consumers. Nigeria, with a population of more than 185 million, is Africa’s richest country, and its residents are some of the world’s biggest spenders on luxury goods: last year, Nigerians spent more at Harrods in London than either Chinese or American tourists.
- Cash is still king in Africa. Credit card penetration is only 0.33% in Africa, so online retailers that offer a cash-on-delivery payment option are more competitive. Also, given the continent’s 54 different currencies, retailers must partner with local payment gateways and then reconcile the multiple currencies into one denomination they can use to pay suppliers and staff.
- To scale, retailers need partners on the ground. There really is “no copy and paste solution when it comes to logistics in Africa,” Anuna says. Klasha is able to ship to customers in one to five days, versus 20 days from some international retailers, by working with both global shippers and local partners in different African cities. In some regions, those local partners include bike couriers who deliver packages to customers in remote towns.
- Customer care standards need to be as high as in every other country. Retailers must offer customers in Africa the same experience and quality they offer customers in Western countries, including the same SKU options, next-day and same-day delivery options, instant customer care, local-currency payments, and great quality products at great prices.
To hear the rest of Anuna’s insights on the retail opportunity in Africa, listen to the full episode.