You Can Shop In the United States Even If You Live in Africa
WHY YOU SHOULD CARE
Because whoever gets around the roadblocks of corruption and inefficiency in African markets is going to be raking it in.
By Anna Nordberg
Chris Folayan had never been on the Internet when he arrived at San Jose State as an undergrad in 1994, straight from boarding school in Nigeria’s Kwara State. But almost instantly, he began soaking up the Bay Area startup culture, which admittedly was one generation before today’s startup-landia. “You could say anything and add a ‘.com’ after it, and almost hear the sound of funding,” Folayan says.
Two decades later, after teaching himself how to program by looking up source code on the Web, Folayan, 37, is the founder and CEO of Mall for Africa, an online platform that allows consumers in Nigeria — and soon Ghana, Kenya and Tanzania — to buy goods from U.S. and U.K. sites that don’t do business with the continent.
Mall for Africa’s 140,000 members buy a lot of stuff — often $25,000 worth of goods from a single site in one day.
It’s a big, open market when you step back and think about it. Many retailers exclude Africa from their e-commerce business for a number of reasons: shipping logistics, for one. As Folayan explains, many people in Africa don’t want to give out their address, as they consider where they live to be private.
But the main hurdle? The poor understanding that Western companies have of the continent’s growing economies and middle class, which make up a huge, untapped market full of customers who want to buy Ralph Lauren T-shirts and Nordstrom watches, but just can’t get them delivered.
When Folayan first started pitching his company, he got the sense that more than a few of his listeners were thinking about the myriad scams African businesses have been associated with, instead of the opportunity. “You say Nigeria and everybody cringes,” Folayan admits. “It’s a hard, hard sell.”
But it shouldn’t be so hard when you smell the numbers.
Mall for Africa’s 140,000 members buy a lot of stuff — often $25,000 worth of goods from a single site in one day. “People talk about slumping retail sales,” says Folayan. “Well, Africa is open for business.”
So now, when he speaks to retailers about Mall for Africa (often having to ask them not to flag it as a fraudulent site), he shows up armed with a PowerPoint presentation that contains enough hard-nosed statistics for an economics Ph.D. It’s made him part sales pitchman, part policy wonk.
“I talk about the growth of technology, the middle class, the Internet, GDP — the list goes on in my slides,” he says. For added ammunition, he references the book The Fastest Billion, which talks about how Africa has the most rapidly growing number of billionaires and millionaires in the world. While all that sounds a tad educational for a luxury-brand pitch, Folayan argues it’s necessary if retailers are going to see Nigeria as a nation that can actually afford goods.
Whatever he’s doing, it’s working. After founding Mall for Africa three years ago with his own money, and doing much of the initial programming on his own, he now has a company with 40 employees, 140,000 members — and it’s profitable. (He says the still-private company is a “multimillion-dollar” company, although he won’t specify further on revenues.)
Folayan’s always had the startup bug. The entrepreneur who influences him most is his father, who got a Ph.D. in civil engineering at Stanford and founded an engineering firm back home in Lagos, Nigeria, that still operates today. (The family has deep Golden State roots: His mother is from Southern California, and both of his older brothers went to Stanford.)
At age 7, Folayan started his first business, collecting tires from the side of the road in Kwara State and dropping them at the closest vulcanizer location. Since he couldn’t actually drive, he presented a business plan to his parents, and then recruited his friends, doling out different geographic routes for them to collect tires with their parents for a cut of the profits.
With Mall for Africa, the model is straightforward: Members sign up, fund online accounts, and then shop on sites directly. After they make their purchases, Folayan’s company takes over, handling payments, inventory checks and shipping. To address the logistical issue of most people not wanting goods shipped directly to their home, the company is opening distribution centers in almost every Nigerian state.
“People want their stuff,” he says. “They’ll come hours after we send an email and bring their whole families.” He shares stories that, even in their Hallmark moment-ness, are pretty irresistible. There’s the one about the wife who bought a watch for her husband that he had always wanted for his birthday — he’d kept a magazine picture of the watch in his closet, but had never been able to own it because the retailer didn’t ship to Africa. And then there’s the story of the woman who was finally able to get a certain kind of sewing machine and start her own business.
Companies that hop onboard could have a big advantage: Many of their peers won’t even allow Web users in Africa to view their sites, let alone buy anything.
When he relates these anecdotes, Folayan, now a father of two, speaks with an unbridled, almost boyish idealism. It says something about him, that he’s hung onto it, given that he often has to play defense when talking about what he does. “I get asked if I’m the son of the prince that sent that email,” Folayan says, referring to the infamous Nigerian Prince email scam.
Next up for Mall of Africa? Forging partnerships with retailers — big names like Ralph Lauren, Macy’s and, inevitably, Amazon. The numbers are nothing to sniff at. Companies that hop onboard with him could have a big advantage: Many of their peers won’t even allow Web users in Africa to view the content on their sites, let alone buy anything. Folayan calls it “blacklist[ing] an entire continent.”
He says the companies that show only an error message when users try to access their sites on the continent include Target, Kohl’s, J.C. Penney, Express and Forever 21. And why? Folayan hasn’t been able to get an official answer, but he chalks it up to scam artist paranoia on a small scale, or fear about government corruption on a large scale.
But if Folayan’s idealism won’t break down the silicon barriers, something else might: cold, hard cash.
- Anna Nordberg, OZY Author Contact Anna Nordberg