South Africa is a market that is bursting with life and brimming with potential, and that vibrant energy was palpable when our RedCloud South Africa team recently participated in the Southern African International Trade Exhibition (SAITEX). SAITEX Africa is Africa’s largest and most established trade exhibition, and the team was on the ground showcasing the power of Intelligent Open Commerce to FMCG Brands and Distributors.
In this edition of RedCloud Insights, we’re bringing you an exclusive Q&A session with Sameer Jooma, General Manager for RedCloud South Africa. Sameer will share his insights on how the world’s first Intelligent Open Commerce platform creates opportunities in South Africa and the wider continent for FMCG Brands and Distributors.
What opportunities does Africa offer technology companies like RedCloud?
Africa, projected to accommodate 40% of the global youth by 2025, is home to the world’s youngest population. With its rapidly expanding internet and mobile penetration and accelerated consumer growth – expected to exceed $2 trillion by 2025 – the continent is leapfrogging the rest of the world with regard to digital payments and trade digitalisation. By 2025, Africa is also projected to host a significant share of the 1 billion micro-entrepreneurs set to emerge from developing markets.
Platform businesses that support entire ecosystems in Africa, like the FMCG ecosystem, are poised to create value for all participants and capture market share on the continent over their competitors. However, the scalability, simplicity, affordability, and accessibility of these platforms are crucial in order for this to be achieved.
Many brands on the continent have identified the need to move away from traditional commerce models and are embracing technology. I once heard from an Executive at a global FMCG company that their goal was to become known as a technology company selling FMCG products. However, the investment in technology by these FMCG companies has not yielded the desired result – adoption rates have been low due to their inability to tick the important boxes of scalability, simplicity, affordability, and accessibility.
Take South Africa, for example. With a population of 60 million and over $4.5 billion in economic activity (most of which are consumer goods), it is the second-largest economy on the African continent. However, most goods and services in South Africa, just like the rest of the African continent, are not facilitated through formal channels but rather through small and medium businesses.
However, with the rapid penetration of mobile phones and the internet, every person with a mobile phone can become a trader; and gain access to the tools they need to trade freely – i.e., buy, sell, and make payments. There are significant opportunities for those brands embracing digital commerce, as well as the technology companies building the technologies.
What was RedCloud’s goal in participating in the SAITEX event?
The primary goal was to demonstrate to brands and micro-entrepreneurs the power of our Intelligent Open Commerce Platform, as well as how easy and seamless it was to join and start trading.
Another aim was to engage with FMCG brands and distributors to understand how they were navigating the fast-evolving technology and B2B trading landscape. Unsurprisingly, they all face common challenges – inability to connect with their end customer, difficulty in finding new customers, digitisation of their business operations, a slowdown in growth, high cost of expansion into new regions and territories, among others.
Being relatively new to the market but quickly gaining traction, we also aimed to identify opportunities for collaboration and strategic partnerships for future growth.
Were you successful in identifying these strategic partnerships?
We certainly were. I was privileged to host a seminar with Alastair Tempest, CEO of EFA, and address the guests at the event, talking about supply chain digitisation and the benefits of participating on an Open Commerce platform. E-commerce Forum Africa (EFA) is a trade association representing digital commerce on the continent. Their mission is to increase awareness, confidence, and capability of the digital commerce industry in Africa.
We’re excited to be partners with EFA and become an EFA member.
We were also able to engage and identify opportunities for collaboration with local governmental entities that are focused on developing small and medium enterprises, NGOs representing thousands of local entrepreneurs, and international organisations from Dubai, India, Indonesia and Thailand that are focused on facilitating trade into Africa.
What trends were brought to your attention at SAITEX, and how do they serve as opportunities for Open Commerce?
Many companies have gone the “digital route” and signed up on e-commerce platforms but saw little to no commercial benefit. It has become more expensive and risky to digitize their businesses using the traditional e-commerce route.
We found that brands are looking for ways to connect with the small businesses that sell their products, but most of their attempts at digitization have created complexity and increased costs rather than providing simplicity and commercial returns that would warrant these investments.
While many tiers 2, tier 3, and emerging brands are able to enter new markets with some ease, growing their brands in those markets is also challenging due to the lack of a distribution footprint and on-the-ground infrastructure to support them. These brands now acknowledge that traditional e-commerce is not the appropriate model to enter a new market.
Another trend we observed is that there is a growing need for personalization and customer experience.
Can you talk more about Open Commerce and the issue with big tech companies?
Every year, over $30 trillion worth of essential goods are sold across emerging markets through local stores, but it is becoming increasingly difficult for these businesses and their customers to access the products they need or want due to rising costs – costs largely created by inefficiencies in the supply chain.
Big tech companies claim that they can help these businesses digitize and drive growth, but it has quickly become apparent that working with these big tech companies often does more harm than good. The complexity in getting started, punitive contracts which can only be described as commercial enslavement, and the unfair advantage these big tech companies have due to their outsized marketing budgets – does nothing to support the growth of these small businesses or make trading easier for them, nor does it fix an already broken supply chain.
As a result, small businesses die and essential food items become unaffordable, unreachable, scarce and expensive.
Traditional e-commerce has dominated by creating and controlling commercial dependency and, most importantly, has failed to fix the broken trading system.
We have a platform that fundamentally shifts the way B2B commerce is conducted anywhere in the world. An Intelligent Open Commerce platform that unlocks accelerated business growth and supports the establishment and growth of the next 1 billion tech-savvy micro-entrepreneurs.
The future of Commerce is…. Open.
