Nairobi-based seed stage investment firm, Savannah Fund will on November 20 host Afrikoin, an event on Africa’s emerging ecimmerce, digital currency and payments to help innovators, entreprenuers in the ecommerce and the payments space and laymen to understand the future of cash in Africa.
Speaking to TechMoran Savannah Fund’s Mwana Alliy said AfriKoin was inspired by a need to help their second batch of startups, who were majorly in the payments and ecormmerce space, to understand the ecosystem by listening from the industry players themselves than just having another cliche launch.
Demo is not a pitching contest
“It happens that this batch is in the ecormmerce and payments space. Demo Day to me is not just about a pitching contest but a value add, so we decided to put up an event they can ask questions on credit cards, debits and we didn’t just want to have a launch like any other but wanted to equip them for the trade, hence Afrikoin. ”
Though the eCommerce and payments sector is huge in Africa, Afrikoin aims to help the average person to understand payments and know what they need to do with their eCommerce businesses. It also addresses emerging trends such a bitcoins among others.
“We also wanted to help odrinary mwananchi to learn about the future of digital payments, know the emerging trends in the payments space like Bitcoins and also help them understand that to be in the ecormmerce space they have to understand payments,” said Alliy.
He added that the average techy can also know the advantages of the various payments methods, know how to integrate them and learn about regulations from the legal team that will speak at the event. The launching startups will have the opportunity to ask questions on mobile payments, credit cards payments and other real challenges surrounding digital currency and payments in Africa.
Fix payments in Africa
Afrikoin doesn’t try to fix payments in Africa but as investors Savannah Fund only aims at accelerating emerging innovations in the tech sector.
“We don’t want to wait for things to happen but accelerate and help people learn regulations, frameworks among others. Afrikoin is not trying to fix payments in Africa, Demo Day will just be a space to learn about them, a value add to everyone. We willl do what is needed not just be there, we want to meet a need, and needs change everytime. One day is not enough to fix Africa’s payments sector. We want entreprenuers to come in the event and get help.”
“The world thinks Africa is not buying online but has much needs like food and water and people think delivery does not work in Africa. They think Konga is not real, they Jumia is not in Africa. They are basically ignoring Africa’s middle class. As a VC it’s my job not just to look at things happening but to accelerate them.”
Africa’s middle class
eCommerce in Africa is still in its early stages due to payment challenges but Africa has plenty of average cunsumers buying online, from tickets to shoes. By addressing issues like secutiry and trust, Afrikoin stands as the continents holy grail for eCommerce.
There is a massive eCommerce opportunity in Africa with a population of over 1 billion. Though grwoth might take time adddresing barries like payments, delivery and transport helps.
To those doubting Africa, McKinsey Global Institute reported that the continent’s imminent boom in consumer spending was expected to rise from $860 billion in 2008 to $1.4 trillion in 2020, while the International Civil Aviation Organization reported that Africans flew 8.3% more miles in 2012. Over ten new five-star hotels were constructed in Lagos last year and prices for apartments in some upmarket districts of Lagos match those of major Western capitals.
The report also adds that return on foreign investment in Africa is higher than in any other developing region and that for the last ten years, six of the world’s 10 fastest-growing economies were African even beating Asian tigers. At 13%, Ghana was the continent’s fastest-growing economy in the world in 2011.
And where are the consumers, you might ask.
According to the African Development Bank, Africa now has the fastest-growing middle class globally with over 34 percent , around 313 million people spending over $2.20 a day, a 100% rise in less than 2 decades. The bank says by 2060, Africans living below the poverty line will be as little as 33 percent.
Groupe Speciale Mobile Association (GSMA ) projects Africa to have nearly 800 million mobile phones by end 2013. In 2011 it carried out a survey that found that 71% of adults in Nigeria; 62% in Botswana and more than half the populations of Ghana and Kenya own mobile phones, making Africa the world’s fastest-growing mobile phone market and the second biggest comnsumer of mobile phones behind Asia.
From mobile phones to eCormmerce
Away from mobile phones. eCommerce is steadily picking up in Africa. Nigeria’s Konga and Jumia have led the way. The online malls sell to anyone in Nigeria and deliver across the country. The firm’s have huge warehouses and offline pickup points. Jumia also runs a Kenyan branch. Konga is funded by MIH Naspers while Jumia backed by Berlin’s Rocket Internet.
Ahonya has set up shop in Ghana and is slowly picking up. Ahonya is backed by Savannah Fund. South Africa has had its fair shares of eCormmerce sites some of them also backed by Rocket Internet or Naspers and individual firms. Rocket Internet recently got a backing from Millicon and JP Morgan and Summit Partners. Believers and early acellerators in Africa’s eCommerce.
eCormmerce is really not a strange term in Africa since the launch of undersea cables early 2010 and the increasing affordability of internet, being mobile-internet in most countries on the continent led by Nigeria over 150 milliom mobile subscribers and Kenya’s encouraging 30 plus million mobile phone users using their mobil einternet not only for ecommerce but for education, farming and healthcare and even buying shares and saving.
Forbes has a list of African billionares and millionaries and it not just Aliko Dangote or Uhuru Kenyatta, there are retailers who have build their business from scratch and still making more money by the hour. Retailes in Kenya like Nakumatt,Tuskys, Naivas have the most visitors in a day than banks and bars combined, a sign of the country’s growing consumers. Porsche is launching in Africa, Wal-mart already did, so did KFC. Safaricom makes as much money as if it’s not in Africa, and so are other firms like Coca Cola, Samsung, Google and thousands of NGO’s running campaigns here.
eCommerce opportunity is big
Afrikoin will bring together practitioners in the industry to encourage innovation in the payments and eCormmerce sector. Alliy says the whole-day event at ihub will be livestreamed for the global audience and already firms like Equity Bank and PayPal, Visa, Kipochi among others have confiremed their attendence.
Come, let;s fix payments for the continents disparate markets and accelerate eCormmerce together.