American eBay sellers will soon gain access to Africa’s biggest consumer markets. This comes via a new partnership between the U.S. e-commerce giant and online shopping startup MallforAfrica.com, set to go live July 2016.
The arrangement will launch a new “eBay Powered by MallforAfrica dedicated platform,” said eBay Business Development Director Fernando Saiz. “The platform will enable inventory from all eBay U.S. individual and business sellers with a 300+ star rating to be purchased by buyers in Nigeria and Kenya.”
Sales on the Ebay.MallforAfrica.com site will begin “first in Nigeria, then Kenya, followed by Ghana, all in 2016,” confirmed MallforAfrica CEO Chris Folayan, noting additional African countries will follow.
“We are creating a unique ‘eBay Powered by MallforAfrica’ app to run on all our platforms. When buyers in Africa shop with this app, they’ll be able to shop on eBay, buy what they want, check out, and pay through MallforAfrica,” said Folayan.
Both parties confirmed the partnership will be a financial, marketing, and logistics arrangement only–eBay has not taken any equity stake in MallforAfrica.
eBay’s collaboration with MallforAfrica solves a number of challenges global consumer goods companies face when entering many African markets. With a unique payment and delivery system, its proprietary platform serves as a digital broker and logistics manager between U.S. retailers and African consumers. MallforAfrica has backing from UK private equity firm Helios Investment Partners and partnerships with companies such as clothier Hawes and Curtis and department store Macy’s.
Chris Folayan founded the site in 2011 after studying and working in the U.S. The idea came from a common request to Africans living abroad that highlighted a gap between supply and demand for the continent’s consumer markets. “Every time I went back to Nigeria, friends and friends of friends kept giving me lists of American goods to bring back, a lot of it brand named products,” explained Chris. “The lists and payments grew beyond anything I could manage. We saw demand and definite market need and created an online portal to meet it.”
For the new eBay partnership, MallforAfrica’s platform will handle logistics. The venture maintains its own product processing center in Portland, Oregon and takes care of shipping and delivery for goods of its U.S. partners. MallforAfrica’s portal will also handle payments for eBay products, accepting both local currency and digital payments from fintech partners Paga in Nigeria and M-Pesa in Kenya, which will go back to eBay vendors in dollars.
“The experience will be seamless for a U.S. based seller and will feel as though they are selling to a US buyer,” said eBay’s Saiz.
The eBay/MallforAfrica partnership marks continued outside confidence in Africa’s retail markets and the value proposition for African e-commerce. The continent’s consumer spending is estimated to exceed$1.4 trillion annually by 2020 and online sales are expected to top $75 billion by 2025, according to McKinsey’s Global Institute.
Recent market movements include Swiss Ringier’s acquisition of Nigerian online deals site DealDey. In February a $326 million funding round (comprising Goldman Sachs and AXA Insurance) in e-commerce company Jumia Group (formerly Africa Internet Group) created the continent’s first $1 billion startup unicorn.
Despite its well-known challenges, Nigeria has become a testbed for e-commerce startups attracted to its dual distinctions as Africa’s most populous country and largest economy. Even recent tough economic times, connected to a global drop in commodities prices (Nigeria is a major oil exporter) and China’s business slump (one of Nigeria’s major trading partners) have not significantly impacted MallforAfrica’s sales, according to CEO Chris Folayan.
“It’s actually helped us in a way,” he said, noting less Nigerians traveling overseas and recent government controls on consumer dollar spending abroad have drawn more consumers to the site. Nigerians are known for purchasing a high volume of brand name goods internationally. They actually spend more at London’s Heathrow Airport than any other nationality.
eBay is optimistic about connecting this desire for global goods to a local online platform, “Working with MallforAfrica will enable more of our sellers to reach more African consumers, and for more African consumers to access the products that they want but cannot find locally,” said Business Development Director Fernando Saiz. “Our goal is to connect people around the world through commerce wherever they may be.”