Can an African eBay Save the Continent? – Francis Pisani

Herman Chinery-Hesse was described to me as “the African Bill Gates,” but what he’s launching is more like the continent’s eBay. He lacks the Microsoft founder’s fortune and power, but he did launch a software company serving SME’s in Ghana, where he lives, as well as other African countries, over twenty years ago.

The comparison with Gates is misleading. Open and warm, Chinery-Hesse has a true vision of what he wants to do for his country and for his continent.

It starts with ShopAfrica53, a sort of online mall that he recently launched. The goal is to “act as the intermediary to small African companies,” Chinery-Hesse told me in his veranda. It’s his second giant adventure.

SoftTribe, which he founded after returning from the United States and Great Britain, provides software to companies in several African nations, and today generates “millions of dollars.” But Chinery-Hesse hopes for better. He wants to contribute to the development of the continent, through entrepreneurship and innovation, which is the reason he decided to launch ShopAfrica53. 

The commercial platform rests on three pillars:

1. A website for each country, where merchants can offer, and clients find, products. All transactions are made via SMS.
2. A credit system called the African Liberty Card, which is a scratch card provided by ShopAfrica53. Available in various retail locations, the cards allow customers to instantly transfer money to their phone.
3. The third is an example of Chinery-Hesse’s shrewd market insight. All logistics are handled by couriers (DHL, FedEx and others). They know how to find a product in any area, no matter how rural, and deliver it to Saragossa, Toulouse or Miami. All ShopAfrica53 has to do is to pay providers at the end of the month. When asked about the cost of these operations, Chinery-Hesse responded with a smile: “The difference in salaries between Africa and Europe or the US gives us large margins to pull from.”

“We target the base of the pyramid, and our margins are significantly reduced,” he said. “SMS and email don’t have borders.” He recognizes that it will take a certain amount of time for his project to make it’s mark, perhaps up to five years. “But it will be huge. It will be more effective than anything outside aid could do in five years. I don’t know any country that developed thanks to aid. It’s a false path. We will do it better; what’s more, we’ll do it with dignity.”

Going back to my notes for this post (this is part of a long article published in Spanish this week in Madrid’s El País[Article in Spanish]), I wondered if it was really “the base of the pyramid” – a very popular term right now – that he was aiming for. I tend to think that a more intelligent strategy is to aim for the middle of the pyramid – more intelligent for entrepreneurs, at least.

I’ll add that something like this could only be created by locals because, for large multinationals, something like this would be below their level of visibility.

I’m curious to find out what you think about this.