The Rise of Entrepreneurship and E-commerce In Africa
Post date: Jan 7, 2014 11:15:24 PM
VENTURES AFRICA - Despite what they naysayers claim about widespread fraud and easier access to goods through the markets of other countries, Africa (and Kenya in particular) is ripe for entrepreneurship – e-commerce in particular.
If there’s one business model that seems to be generating the most success in Africa, it’s the “simple” model. Creating easy to crack business models that allow companies to make money early on while growing slowly and strategically gives startups a greater chance at success versus other models. Easy-to-execute ideas, especially online business/e-commerce models are allowing African entrepreneurs to dip their toes into the business world to get a feel for the water.
Those willing to put in the work and realize that success will rarely, if ever, come overnight will be best poised to grow in the African economy. They are the ones who will learn every aspect of their business and, when the time is right, will be able to hand tasks to the right team members as growth happens.
Late nights, stress and creative problem-solving come with the territory for entrepreneurs, and not everybody is up for this kind of work when the idea is not their own. Fortunately, there is a large pool of talented people in Africa who are eager to gain experience and do whatever it takes to be part of a successful, and profitable, startup. It’s this talent pool that is re-branding many African nations as open for business on a regional and global scale.
Barriers to Success?
One large, yet surmountable, barrier that stands between many African entrepreneurs and a successful business is the continents diverse payment landscape. M-Pesa, for example, is popular in Kenya, Tanzania and Uganda – three countries where there are more mobile money accounts than bank accounts. However, some merchants are wary of M-Pesa and other mobile money providers because the system is arguably new and not fully understood by all in business.
In the case of M-Pesa, entrepreneurs are fighting misinformation and misunderstanding more than they are any form of scam because direct cash transfer systems like M-Pesa is incredibly safe.
Conversely, Nigerians tend to prefer the Interswitch Verve card – offered through over a dozen major banks in the country. Ten million Interswitch Verve cards are in circulation – far outnumbering MasterCard and Visa, so anybody who wishes to sell to the Nigerian market will want to accept Verve payments and carefully weigh their other options to ensure they are selling to a wide audience while keeping an eye on the costs of processing payments from such a variety of payment options.
Destination for Africa’s Entrepreneurs
Of all the countries that offer prime landscapes for doing business, Kenya has become to gold standard for entrepreneurs both online and offline. Reasons for starting a business are Kenya are easy to see. The country boasts a large penetration of smartphones that supports a high propensity for mobile payments. The dynamic market in Kenya is full of young people with disposable income and available credit who aren’t afraid to make their purchases online as well as pay through their mobile devices. Many Kenyan entrepreneurs are finding Kenya to be incredibly open-minded and willing to try new businesses if the business offers the right product or service at the right price.
Kenya at a glance: Ripe for entrepreneurs of all shapes and sizes, Kenya offers businesses a surprisingly large potential customer base. Nearly 30 percent of Kenya’s population is between 20 and 40 years old. As more people in the country have greater access to credit and regular earnings, they will be looking to unload disposable income on goods and services that are easily accessible through mobile devices. Smart entrepreneurs will reach out to this population by accepting mobile payments and easy-to-use websites that simplify the purchase and checkout process
Africa is far too big for a one-size fits all approach to business. It is a continent, not a country. Entrepreneurs must be extremely creative and nimble to adapt to the varied business landscape and diverse groups of potential customers that every business needs to survive. Smart entrepreneurs will look to successful businesses operating in Kenya as a model for success.