DON’T SELL ONLINE IN AFRICA

UNLESS…

PEOPLE NEED YOU

PEOPLE LOVE YOU

YOU WANT TO LOSE YOUR MONEY

US (You & me)

Good News & Cross Border eCommerce

What Country

Risks & Tips

Case Study: Cool Stuff

Our Vision

TEST:1. Offline before online

2. Find Price Point > Target market

1. Rival the French Revolution

Be Excellent at Execution

2. Think Prius

Be Hybrid

THE EXPERTS SAY:

MY TWO CENTS:

GDP growth: Global vs sub-Saharan Africa

PWC RETAIL AFRICA REPORT

(Annual average prices, 2007=100)

PWC RETAIL AFRICA REPORT

COMMODITIES AT USD-INDEXED PRICES

REALLY SMART PEOPLE SAY:

African e-commerce market:US$ 8 billion in 2013

US$ 50 billion in 2018*

Population: will surpass the 1.5 billion by 2026

2 billion 15 years later**

Mature internet users

Improving payment solutions

Affordability of data

Improved Platforms

Economies of Scale

GEARING

Cross border B2C ecommerce market Global consumer goods trade

Source: Ali Research

Cross-border E-commerce History (China)

MY THOUGHTS: DEVELOPMENT OF SECTOR DRIVES GROWTHINFORMATION TO TRANSACTION

CROSS-BORDER ECOMMERCE: SOUTH AFRICA

INTERESTING:

30% of Nigerian consumers purchase from SA.

Top locations for goods export for South Africa are;

China (8.3%), US (8.1%), India (7.8%) and the UK (7.2%)

27.1% US (3RD most visited: Amazon.com)

14.6% Europe

84.3% SA200 Billion USD Imports into China by 2020

86 Billion in 2016**

International CrossBorder Trade 1 Trillion USD by 2020

43% YoY growth rate

Source: Accenture Cross-border e-Commerce 2015

2014 – 2020 Growth Expectancy

In 2015 B2C was only 15.7% of this.

Cross-border E-commerce Turnover (2015-2020)

Source: Ali Research

What Products: There’s a place for (almost) everyone.

Source: Tmall Global / AliResearch

What Metrics?ADVANTAGES

Scalable product rangeLong-term profitabilityCompetitors Barrier to Entry

Team Resilience

Robust DemandLow price/Better quality

Unique/Exclusive Product

Marketing Spend

Inquires/ReferralsWell-known Brand

SEO or Userbase

NicheDigital ProductHigh Profit Margin

PRODUCT

MARKETING© 2017 Jonathan David Novotny

EFFICIENCIES

INTANGIBLE

What Metrics?RISKS

Legal ChallengesDelaysOpportunity Cost

Local CompetitionDirect Foreign Competition

Informal Markets

Model IncompatibilitiesExpat Costs

Theft & Corruption

Warranty ChallengesLanguage & CultureDistrust

COMPETITION

OPERATIONS

© 2017 Jonathan David Novotny

INTANGIBLE

TRADITIONAL

Market Readiness?FILTERS

GDP per CapitaEducation Level

ITU Broadband Dispersion

Market Saturation Market Size

ARDI (African Retail Development Index)

ONLINE TRAVEL BOOKINGSTIP: Amadeus CC vs. Bank Transfer

PARCELS PER COUNTRY Crossborder Trade Study

Mature Internet Users% Market > 1000 USDBanking Sophistication

RETAIL

ADDITIONAL

© 2017 Jonathan David Novotny

AWESOME

TRADITIONAL

Market Size & Saturation

How Big is eCommerce in Emerging African Nations?

oDigital: Domains, Digital, Apps,

oInternational Imports: eBay, Amazon, Alibaba

oOrdering Sites: Larger orders made via websites

oPeripheral Movements: Classified & Realestate Listing Sites

oBill Payment: Mozambican’s pay for products & services in SA

oFlight Tickets:

oDomestic Facebook: Selling Groups, Pages, Page Services/Whatsapp

oInternational Facebook: Cross-border Orders via FB Pages & Ads

oDomestic E-Commerce Players: Compra.co.mz , Jumia

CASE STUDY: BEFORWARD MOZAMBIQUE

Perceptions:Don’t trust online retail

You can’t sell expensive things online.

Want to touch and

Will never send their money

Add-on Services

BEFORWARD: ZAMBIA

UPSELL OPTIONS

GEO EXPANSION : SAME MODEL

CASE STUDY: BEFORWARD.JP

CASE STUDY: REVIEW

Website & Personalization

Simple Communications - Whatsapp

Simple Payment – Bank Transfer

Offline Marketing – Massive Billboard Campaigns + Tire Covers

• 20 Different Massive Companies could have done this from Japan –Kept on developing, personalizing & investing.

• Zambia: Partnerships & Rollup Banners in Telco Offices – Order in-store

• Why cheaper? 100% upfront payment.

WHATS COOL:

• Didn’t need investment

• Are not a digital company

• Are not losing money

• Probably, were always profitable

• Active Worldwide

• Persistence: Solving increasingly more pieces of the problem –Complete Solution.

• Completely localized/agile

THE LESSON:

Consumers are willing to trade comfort for

lower price.

If you make them feel as comfortable. ;-)

HOW WE MITIGATE:

What Compra.co.mz Does?

Who?

Online retailer looking to simplify business in Africa.

What?

Allow Retailers and Brands to Sell Online effectively and simply• Domestic retailers

• Cross-border retailers

Why?

Love creating solutions and simplicity.

HOW WE MITIGATE RISKS:

• Use local suppliers

• Use Third-party suppliers (which are either expensive, unreliable or terrible.)• Vehicle isn’t working today

• Not answering calls

• Business shut down

• 3PLs don’t have an automated calculator – Get individual quotes.

• Market Sophistication:• SEO – Jumia & OLX (World-class competitors & previous market entrants)

• Super powerful

HUMANS ARE NOT RATIONAL BEINGS:

Complex Tech

Retail or

Mozambican Network

Marketing experience

Capital raising

Zero suppliers

Payments: No local currency payments

No Experience:

TIPS & OPPORTUNITIES:

Angola: Know a General

Malawi: Sell Nshima (pap) really cheaply

Somalia: World’s first Online AK47 marketplace

THANK YOU

JON@COMPRA.CO.MZ

WWW.COMPRA.CO.MZ

YOU ARE AMAZING!