Made in Africa, sold to the world

The world wants what Africa is making

AuthorAuthor

Caleb Maru & Mercy Awiti
May 08, 2024

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In today’s edition, we’re exploring the demand for African products and the challenges sellers have in reaching global markets.

We’ve partnered with ShipShap, a Kenyan shipping startup, to learn more.

Let’s dive straight in.

In a remote town in Morocco’s Atlas mountains, Fadma Buhassi sits for another day of making rugs.

She uses the Berber Knot, a technique passed down through generations of Moroccan women.

Years of practice have taught her what goes into a good rug: skill, bags of thick wool, and patience.

A large carpet can take her months to finish.

And as soon as she’s done, brokers arrive and roll it up for sale.

Some hit the local markets.

Others head to big African cities.

And some are shipped overseas, where demand is high and prices are through the roof.

Online, they can sell for several thousand dollars.

And they're just a part of Morocco’s textile industry.

In 2022, Morocco's textile exports shot up to 44 billion dirhams ($4.25 billion).

Now, it's Europe's eighth-biggest source of textiles and clothing.

Zoom out of Morocco and 37 out of 54 countries produce cotton.

While we export most of it raw, what's left gets turned into textiles - which we ship out for $15.5 billion annually.

And there’s more.

Africa is taking care of the world’s skin

Shea butter, a skincare super-ingredient, is exclusively sourced in Africa.

Shea trees produce the nuts that make Shea butter - and they only grow in West Africa, and parts of East Africa like Uganda and South Sudan.

Africa exports most of its Shea butter - with a big chunk heading to Europe and the US.

In Ghana alone, Shea butter exports hit over $92m in 2022.

Globally, the cosmetics Shea butter market is already worth $600m, and by 2027, it’s expected to reach $850m.

And the rest of the world will drive this growth.

There’s an increasing demand for “made in Africa” goods.

We’re seeing it in fashion, cosmetics, food, and even flowers - where Kenyan roses make up 40% of European flower sales.

The world wants what Africa has, and it means huge potential for growth on the continent.

But, demand for goods is the first step.

The next step is getting it across the world

E-commerce links Africa directly to the rest of the world.

But shipping from the continent is frustrating and expensive.

There’s little investment going into government mail systems, and most of them, like Nigeria’s NIPOST, remain manual and slow.

They do everything offline - from placing orders to labelling and tracking parcels.

You can’t know when your package will arrive unless you call or visit the offices physically.

Its tracking numbers go missing, and packages end up abandoned.

Where these options fail, express couriers are the next destination.

They’re online, they’re faster, and you can actually see where your goods are.

But because of low shipping quantity across Africa, there is rarely a direct route to the destination.

A Moroccan rug might need to go through Germany before it gets to the United States.

With multiple stops, the shipping bill piles up.

Which makes selling to the world a challenge

Grace Matunda sells Qasil powder - a skincare product made from the crushed leaves of a gob tree, only found in East Africa.

When she launched social media, she took off - and not just in Kenya.

Customers across the US and Canada wanted to get their hands on Qasil powder.

The global demand was there.

But what came next was an eight-step process to getting her Qasil powder across borders.

Grace had to:

  • Set up a business social media account

  • Capture order details by form or by social media message

  • Get their delivery location

  • Call up the shipping providers to get their pricing

  • Add this to the bill for a customer

  • Request funds on Paypal

  • Wait for them to settle

  • Send the parcel

Before she could even send her products abroad, she ran into a roadblock: payments.

Grace used PayPal to avoid the hassle of going through banks, but PayPal held her money for 30 days without a reason.

And when it came to sending the parcels, the bill was an off-put for her and her customers.

Sending 10kg of Qasil powder to the US usually costs $273. About 75% of the cost of the product.

Grace had someone full-time just to help her send parcels and manage orders.

But with so many roadblocks to getting her product to the world, she was forced to stop selling internationally.

Like Grace, African businesses must manage global demand while battling poor infrastructure.

But where there are challenges, there are opportunities.

This startup is shipping a solution

In 2014, Subhi Beidas joined Shippo as its first employee. Shippo, a US-based unicorn, aggregated shipping options for companies across the US.

That same year, Subhi's friend Eyoel Asfaw faced challenges sending scarves back to the US from Ethiopia.

The shipping costs were excessive and, to save money, Eyoel often had to fly suitcases full of scarves back to the US.

Subhi and Eyoel realised the shipping tools available in the US didn't exist for merchants in Africa and the Middle East.

So, they built a dashboard to give merchants in these regions a seamless way to find the best shipping options - and ShipShap was born.

Today, ShipShap puts all shipping options into one place so businesses don’t need to take eight steps to get their goods to the world.

And instead of the risk of payments getting stuck, ShipShap helps merchants capture both domestic and international payments directly.

The platform then deducts shipping costs from the collected payments - creating a ‘shipping wallet’ that streamlines the whole process.

Most importantly, it means that people selling global goods can focus on selling instead of shipping.

Grace explains she doesn’t need to leave money on the table when the world wants to buy her products.

“I used to ignore inquiries for smaller packages because the cost and hassle were not worth it. Now I can ship to our customers regardless of the volume they want.”

ShipShap does this for thousands of packages every month - and Subhi explains that governments are working with ShipShap to power their shipping and boost trade for local businesses.

“African governments want businesses to export and African merchants want to sell globally. When you give your goods to a shipping carrier, shipping from Nairobi to New York should be just as simple as shipping in Nairobi.”

Closing the distance between Africa and the world

Exporting is a growing opportunity for Africa’s economy.

But if we're having a hard time shipping worldwide, then it's just potential.

Easy shipping is the missing link for e-commerce to get outside of Africa.

Startups like ShipShap are on a mission to close the distance between Africa and the world.

What do you think of Africa’s export potential?

PS - if you’re an e-commerce business that needs help with payment collection and/or shipping domestically or internationally, check out Shipshap here or get in touch with them.

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