Menstruation apps should come in more African languages
DECEMBER 6, 2020
This newsletter is a weekly in-depth analysis of tech and innovation in Africa that will serve as a post-pandemic guide. Subscribe here to get it directly in your inbox every Sunday at 3 pm WAT
Red-themed decorations are going up on buildings across Lagos. You know what that means??
But let’s be honest, it doesn’t feel like this year’s Christmas holidays will be as festive. Pockets have been diminished by the pandemic and the virus is kinda still out there, so expect outdoor shopping to fall below previous years.
A couple of fintechs anticipated this challenge about six months ago and began putting the work in to help merchants set up and sell online. How have these companies fared so far and what does their performance say about the outlook for retail in Africa?
We’ll jump right into this in a moment, but please take a minute to subscribe to this newsletter if you haven’t, and invite your friends to do so in the spirit of the coming season. Find previous editions here.
Spurring sales online
In Q2 2020, Flutterwave and Paystack officially began their dive into ecommerce. Both launched online platforms to help small businesses whose offline sales were decimated by the pandemic to transition online without building infrastructure themselves.
Flutterwave Store had a two-month headstart on Paystack Commerce, garnering over 1,000 sign-ups in the first 30 days.
That number grew to 5,000 by July and crossed 17,000 as of the end of November. “Now we have businesses making over 1,000 orders in 3 days using Flutterwave Store,” CEO Gbenga Agboola said when the startup introduced a feature to help vendors offer discounts to customers.
Paystack Commerce landed towards the end of July to great reception. Moved by the design, some observers felt a surge of inspiration to start a business and display it on the platform. The Stripe-owned company has upgraded the platform’s Product Links to Paystack Storefront – “our most powerful Commerce tool yet” – to allow sellers to display multiple products instead of having individual links per product.
What matters here is not the slickness of announcements or technical feature updates. Trust the product architects at these companies to soon be dissatisfied with what they have rolled out, triggering new updates.
Instead, two broader matters catch attention regarding the platforms’ performance so far:
customer experiences and vendor capabilities in African retail are entering a more sophisticated phase, and
these platforms won’t sit idly on the massive eCommerce knowledge they are accruing.
Paystack and Flutterwave are fintechs that are eCommerce startups that are customer service companies.
Each started with a straightforward mission of helping vendors receive payments from around the world. But because the underlying principle is the convenience of exchange, they have been able to scale their platforms beyond just payments to effect convenience in other endeavours.
They are not only convincing vendors to come online and collect payments digitally, they are teaching them better product marketing, nudging them towards smarter inventory management (notifications for low stock) and encouraging better customer relations (direct WhatsApp chat).
These features – and the ones to come – are long-term plans to influence the mindset of sellers in Africa towards greater professionalism and responsibility.
Flutterwave and Paystack are essentially priming buyers to expect a baseline standard on product presentation and engagement from sellers. In low-trust business environments like Nigeria, this initiative is welcome.
In doing this, both platforms are setting up for a seemingly inevitable future; one where they become influential enough to create showrooms for these stores and storefronts. It may not be one giant marketplace; they could be grouped by product categories. Staff and insiders are already coyly giving hints about this.
Marketplaces are more challenging to manage and grow in Africa judging by the performance of the Jumias and Kongas. But Paystack and Flutterwave have travelled through a more patient learning curve that could prove useful for achieving success on a less arduous time scale.
We’ll need more information on the volume and value of transactions being done on these platforms to get a true picture of what the near future holds vis-a-vis evolution into marketplaces. But there has been enough buzz in the past six months to suggest these companies will be throwing their weights behind this eCommerce experiment.
One thing to ponder; as much as both startups are pretty much on equal footing on technology and ambition, one is part of a company building a global payments and treasury network. We’ll be keeping tabs on how this dynamic affects the pace of each entity’s travel on Africa’s eCommerce highway going forward.
FROM THE CABAL
Menstruation apps should come in more African languages
Most South African prefer to use Afrikaans in everyday communication, with just 8% of indigenes conversing in English at home. Yet, some technology tools – like menstruation apps – that are supposed to help with integral realities of human life are only packaged in English.
Beyond grants and impact investments, there’s a growing interest in Africa. Africa has long been the continent dependent on aid for development but that is changing. As Daniel Adeyemi explains here after an interview with Victor Basta of Magister Advisors, Africa is undergoing a transition from being largely dependent on impact money.
Imagine Mary who makes a living in Kenya selling hand-knitted scarves. Mary is the breadwinner of her family so when the pandemic hits, she is unable to continue meeting her customers. Her business suffers greatly as a result, making it hard to fend for her family.
The pandemic has had telling impacts on lives and businesses across the world, and while a lot of companies are trying to remain afloat, some have gone an extra mile to support their customers as well. One industry that has made efforts in this regard is the fintech industry.
It has not only managed to remain resilient, closing major funding deals despite the pandemic, it has proceeded to help alleviate the effects of the pandemic on its numerous customers.
Earlier this year, Ugandan insurtech company Turaco, widened its micro-insurance offerings to include a hospitality and life insurance product for only $2 a month specifically for COVID-19 patients. Nigeria’s Flutterwave and Paystack also created eCommerce stores to help customers take their offline businesses online.
In April, South Africa’s Yoco launched three new payment platforms to help businesses securely accept online payments. “We knew that the best way to support our merchants was to develop products that would enable them to do business online and keep money coming in through this period,” CEO, Katlego Maphai said.
Kenyan lending platform Tala has also created a COVID-19 Rebuild fund that features interest-free, long term loans for small businesses, particularly those providing essential services in their communities.
It is uncertain what percentage of small businesses will survive post-COVID, but are fintech startups in Africa contributing to that percentage? Yes, they are.