WEBVTT - Author Jake Bright on Race for E-Commerce Into Africa (Audio)

0:00:04.120 --> 0:00:07.480
<v Speaker 1>Global business news twenty four hours a day at Bloomberg

0:00:07.520 --> 0:00:10.600
<v Speaker 1>dot com, the radio, plus Globo Last and on your radio.

0:00:10.880 --> 0:00:14.920
<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters

0:00:14.960 --> 0:00:18.040
<v Speaker 1>on Catherine Cowdery. Stocks climbed, with the SMP five founder

0:00:18.079 --> 0:00:22.439
<v Speaker 1>capping a third straight quarterly advance. Policymakers signaled further steps

0:00:22.440 --> 0:00:25.239
<v Speaker 1>to bover the impact of Britain's decision to leave the

0:00:25.280 --> 0:00:28.880
<v Speaker 1>European Union. The del industrial leverage rose two hundred thirty

0:00:28.880 --> 0:00:31.320
<v Speaker 1>five points one point three percent to close out the

0:00:31.360 --> 0:00:34.559
<v Speaker 1>session at seventeen thousand, nine hundred twenty nine. Smp F

0:00:34.560 --> 0:00:36.880
<v Speaker 1>I founded up twenty eight points one point four percent

0:00:36.920 --> 0:00:40.080
<v Speaker 1>to two thousand ninety eight. NAZDAC added sixty three points

0:00:40.120 --> 0:00:42.640
<v Speaker 1>one point three per seven, closed at forty eight forty two.

0:00:43.000 --> 0:00:45.920
<v Speaker 1>West Texas Intermedia Crude Oil down a dollar fifty a barrel,

0:00:46.120 --> 0:00:48.840
<v Speaker 1>that's a loss of three percent at forty eight thirty nine.

0:00:49.040 --> 0:00:52.199
<v Speaker 1>Sparckled down a dollar fifty announce at thirteen forty and

0:00:52.280 --> 0:00:55.120
<v Speaker 1>a tenure treasury up ten thirty seconds yield one point

0:00:55.120 --> 0:00:59.880
<v Speaker 1>four seven percent. And that's a Bloomberg Business flashing to

0:01:00.040 --> 0:01:06.120
<v Speaker 1>taking stock with Kathleen on Bloombird Radio. As the technology

0:01:06.200 --> 0:01:10.520
<v Speaker 1>wave continues to sweep across Africa. We're very happy to

0:01:10.600 --> 0:01:15.119
<v Speaker 1>welcome back to the show Jake Bright. He is joining us.

0:01:15.200 --> 0:01:18.680
<v Speaker 1>He's co author of the award winning book The Next Africa.

0:01:18.840 --> 0:01:22.040
<v Speaker 1>He's a contributor at tech Crunch and The New Yorker,

0:01:22.160 --> 0:01:25.039
<v Speaker 1>and he is constantly writing and speaking on business, politics

0:01:25.040 --> 0:01:27.080
<v Speaker 1>and foreign affairs. But of course for the last few years,

0:01:27.120 --> 0:01:30.759
<v Speaker 1>Africa has been his focus. So Jake, welcome back. Great

0:01:30.800 --> 0:01:33.800
<v Speaker 1>to be back. Well, uh, the race for e commerce

0:01:33.840 --> 0:01:36.360
<v Speaker 1>in Africa. You broke a couple of stories this week.

0:01:36.520 --> 0:01:40.840
<v Speaker 1>One of them is about eBay. What's going on, yeah,

0:01:40.959 --> 0:01:44.920
<v Speaker 1>story of tech Crunch. eBay is expanding in Africa through

0:01:45.040 --> 0:01:48.440
<v Speaker 1>a partnership with an African startup called Mall for Africa

0:01:48.480 --> 0:01:51.720
<v Speaker 1>dot Com, which basically what Mall for Africa does is

0:01:51.760 --> 0:01:55.560
<v Speaker 1>takes all the headaches that American retailers face when they

0:01:55.560 --> 0:01:59.360
<v Speaker 1>try to enter an African market with logistics, with payments, etcetera.

0:01:59.800 --> 0:02:02.440
<v Speaker 1>And it has a platform that makes it all easy

0:02:02.480 --> 0:02:04.080
<v Speaker 1>for them. So eBay is going to be able to

0:02:04.080 --> 0:02:06.800
<v Speaker 1>sell American eBay vendors will now be able to sell

0:02:07.560 --> 0:02:11.519
<v Speaker 1>to African clients um starting in Nigeria and Ghana and

0:02:11.639 --> 0:02:14.920
<v Speaker 1>Kenya through them All for Africa's platform, All for Africa

0:02:14.960 --> 0:02:18.840
<v Speaker 1>will do logistics, payments in marketing and will eventually expand

0:02:18.880 --> 0:02:21.800
<v Speaker 1>that further and will eventually open up the platform to

0:02:21.880 --> 0:02:25.600
<v Speaker 1>allow Africans to sell stuff into the US. Africans to

0:02:25.680 --> 0:02:27.320
<v Speaker 1>sell stuff into the U s well, what kind of

0:02:27.360 --> 0:02:29.720
<v Speaker 1>stuff will they sell? Well, what you have going on

0:02:29.840 --> 0:02:33.600
<v Speaker 1>is you start to get into the value proposition of

0:02:33.760 --> 0:02:37.400
<v Speaker 1>African commerce and really when you break it down, you

0:02:37.440 --> 0:02:40.200
<v Speaker 1>have an upside and a downside. The upside is that

0:02:40.480 --> 0:02:44.120
<v Speaker 1>Africa's consumer markets are really starting to define themselves. By

0:02:44.200 --> 0:02:47.240
<v Speaker 1>Mackenzie Stats, they're expected to spend a round a billion

0:02:47.919 --> 0:02:51.680
<v Speaker 1>one trillion four by seventy five billion of that is

0:02:51.680 --> 0:02:54.960
<v Speaker 1>expected to be online. So that's the upside. The downside

0:02:55.000 --> 0:02:59.080
<v Speaker 1>is that most of Africa's consumer markets are largely informal,

0:02:59.360 --> 0:03:03.280
<v Speaker 1>meaning completely off the grid barter cash exchange, and many

0:03:03.360 --> 0:03:07.320
<v Speaker 1>of the countries that have the most potential or these

0:03:07.360 --> 0:03:09.880
<v Speaker 1>e commerce startups like Mall for Africa or eBay want

0:03:09.919 --> 0:03:13.080
<v Speaker 1>to go into, they lack a lot of the baseline

0:03:13.080 --> 0:03:17.000
<v Speaker 1>infrastructure that e commerce startups completely take for granted here

0:03:17.040 --> 0:03:20.919
<v Speaker 1>in the US, and that includes you know, low internet penetration, UH,

0:03:21.320 --> 0:03:24.880
<v Speaker 1>third party delivery systems, and also in some cases you know,

0:03:24.919 --> 0:03:28.920
<v Speaker 1>even electricity. So it's it's a huge challenging opportunity and

0:03:28.960 --> 0:03:31.880
<v Speaker 1>that happens in every market, but in Africa, the contrasts

0:03:31.880 --> 0:03:35.000
<v Speaker 1>and the darkness between the challenges and the opportunities of

0:03:35.040 --> 0:03:37.880
<v Speaker 1>tapping consumer markets are even greater than other places in

0:03:37.880 --> 0:03:39.920
<v Speaker 1>the world. But a lot of African set phones now,

0:03:40.480 --> 0:03:43.400
<v Speaker 1>well that's part of the shifting horizon, right. So what

0:03:43.480 --> 0:03:46.200
<v Speaker 1>you're getting into is you have some core economies um

0:03:46.240 --> 0:03:49.400
<v Speaker 1>that have really started to shape up and reform, places

0:03:49.440 --> 0:03:52.640
<v Speaker 1>like Nigeria, which is really Nigeria is kind of the

0:03:52.720 --> 0:03:56.560
<v Speaker 1>central point for this this e commerce um you know venture.

0:03:57.040 --> 0:03:59.920
<v Speaker 1>And the reason why is Nigeria, for all of its challenges,

0:04:00.040 --> 0:04:02.480
<v Speaker 1>has these dual distinctions that you can't get away from

0:04:02.480 --> 0:04:05.680
<v Speaker 1>if you're a global business. That the first is that

0:04:05.720 --> 0:04:09.880
<v Speaker 1>it became Africa's largest economy in twoteens through passing South Africa.

0:04:10.240 --> 0:04:14.320
<v Speaker 1>And the second is that it's Africa's largest population UM.

0:04:14.360 --> 0:04:16.719
<v Speaker 1>But the you know, the the challenge on that is

0:04:16.800 --> 0:04:21.560
<v Speaker 1>that again you have low broadband penetration, you have a

0:04:21.560 --> 0:04:24.280
<v Speaker 1>lot of Africans actually have have phones this is this

0:04:24.320 --> 0:04:27.400
<v Speaker 1>is where you know the breakdown comes. Most Africans have

0:04:27.520 --> 0:04:30.560
<v Speaker 1>phones now, but very few of them are smartphone or

0:04:30.560 --> 0:04:33.520
<v Speaker 1>internet equipped. But you're now starting to see that shift

0:04:34.000 --> 0:04:37.440
<v Speaker 1>happen where large percentages of Africans are going to start

0:04:37.480 --> 0:04:40.800
<v Speaker 1>moving to smartphones and being connected. And these are all

0:04:40.839 --> 0:04:43.599
<v Speaker 1>the things that these e commerce startups um like eBay

0:04:43.640 --> 0:04:45.840
<v Speaker 1>and Mall for Africa are trying to tap as they

0:04:45.839 --> 0:04:48.200
<v Speaker 1>shift into Africa. Because another story you worked on was

0:04:48.240 --> 0:04:51.360
<v Speaker 1>in New York or um last quarter Africa mented its

0:04:51.360 --> 0:04:55.400
<v Speaker 1>first one billion dollars start up Unicorn Jumior Group. UH

0:04:55.560 --> 0:04:58.000
<v Speaker 1>big funding round like three and a quarter million dollars.

0:04:58.560 --> 0:05:01.520
<v Speaker 1>Goldman and others were in on it. How how people

0:05:01.560 --> 0:05:04.080
<v Speaker 1>milestone is that? What does this tell us? I mean,

0:05:04.120 --> 0:05:05.919
<v Speaker 1>it's huge. If you know, I was just thinking you

0:05:05.960 --> 0:05:09.239
<v Speaker 1>and I started talking about this, you know, emerging African

0:05:09.240 --> 0:05:12.080
<v Speaker 1>business narrative several years ago here on Bloomberg and when

0:05:12.120 --> 0:05:14.599
<v Speaker 1>we started, we would never have imagined it was. It

0:05:14.640 --> 0:05:17.800
<v Speaker 1>was just starting to even define that there was economic growth,

0:05:18.160 --> 0:05:20.359
<v Speaker 1>that there were markets that were gonna start attracting you know,

0:05:20.480 --> 0:05:23.240
<v Speaker 1>Western companies more. But if we would have said to

0:05:23.279 --> 0:05:25.800
<v Speaker 1>ourselves then um, you know in several years, you're going

0:05:25.839 --> 0:05:28.440
<v Speaker 1>to have a real tech scene. You're gonna have Goldman

0:05:28.600 --> 0:05:33.080
<v Speaker 1>included in a funding round for Africa's first startup, Unicorn.

0:05:33.120 --> 0:05:34.720
<v Speaker 1>I don't think we would have believed it back then.

0:05:35.120 --> 0:05:37.960
<v Speaker 1>So these are huge movements for the continent. Then of

0:05:38.000 --> 0:05:41.360
<v Speaker 1>course there's a lot of expectation and now these companies

0:05:41.720 --> 0:05:46.160
<v Speaker 1>like Junia, which is now Africa's first billion dollar startup,

0:05:46.320 --> 0:05:50.200
<v Speaker 1>has to actually demonstrate that it can generate revenue and profit.

0:05:50.240 --> 0:05:53.400
<v Speaker 1>It's generated, it's it's demonstrated can generate revenue. But of course,

0:05:53.440 --> 0:05:55.960
<v Speaker 1>like all e commerce startups, the big one is actually

0:05:55.960 --> 0:05:59.600
<v Speaker 1>going from in the red to in the black. So, uh,

0:06:00.360 --> 0:06:04.039
<v Speaker 1>the this whole this this bigger question though of e

0:06:04.120 --> 0:06:09.559
<v Speaker 1>commerce and tech models and the growing tech ecosystem. Where

0:06:09.680 --> 0:06:12.360
<v Speaker 1>is that now in its evolution and where is it going?

0:06:13.640 --> 0:06:17.360
<v Speaker 1>It's very nascent um. Africa has, as you say, this

0:06:17.400 --> 0:06:20.680
<v Speaker 1>tech ecosystem that's really had a tremendous amount of growth

0:06:20.800 --> 0:06:22.880
<v Speaker 1>just in the last five years. And one of the

0:06:22.880 --> 0:06:25.040
<v Speaker 1>things co author Abrey Ruby and I did in our

0:06:25.080 --> 0:06:28.000
<v Speaker 1>book was trying to break down what is this emerging

0:06:28.000 --> 0:06:31.160
<v Speaker 1>African tech ecosystem. So some of the building blocks are

0:06:31.200 --> 0:06:34.000
<v Speaker 1>there's a lot of innovation hubs, around two hundred that

0:06:34.040 --> 0:06:36.680
<v Speaker 1>have started to sprout up across the continent. You have

0:06:36.760 --> 0:06:39.320
<v Speaker 1>a startup boom in Africa right now, m similar to

0:06:39.360 --> 0:06:43.560
<v Speaker 1>the US in late nineties. It's a huge informal economic space,

0:06:44.080 --> 0:06:46.239
<v Speaker 1>and you have a lot of entrepreneurs, many of whom

0:06:46.240 --> 0:06:48.240
<v Speaker 1>and I think we've had some one on there here,

0:06:48.240 --> 0:06:51.880
<v Speaker 1>many of whom are dropping out of advanced economy gigs

0:06:51.920 --> 0:06:54.799
<v Speaker 1>to go back and found startups for everything to tackle

0:06:54.880 --> 0:06:57.960
<v Speaker 1>just about every commercial opportunity you can have, So startups

0:06:57.960 --> 0:06:59.719
<v Speaker 1>are a big part of it. You're starting to see

0:06:59.760 --> 0:07:03.200
<v Speaker 1>a growing amount of investment. Aubrey and I did a

0:07:03.240 --> 0:07:07.800
<v Speaker 1>study where we captured i think between eighteen real and

0:07:07.920 --> 0:07:10.960
<v Speaker 1>expected a billion dollars in VC investment going in to

0:07:11.080 --> 0:07:14.640
<v Speaker 1>Africa's ecosystem tech ecosystem. And the final thing is you're

0:07:14.680 --> 0:07:18.800
<v Speaker 1>starting to see um places where African governments are starting

0:07:18.840 --> 0:07:21.080
<v Speaker 1>to build out I c T infrastructure and take a

0:07:21.080 --> 0:07:24.440
<v Speaker 1>real commitment to building some kind of an environment where

0:07:24.440 --> 0:07:26.960
<v Speaker 1>tech can thrive. Alright. Jake Bryan, thank you so much

0:07:27.000 --> 0:07:31.600
<v Speaker 1>for joining US Opportunities Investment Opportunities in Tech in Africa.

0:07:31.920 --> 0:07:35.040
<v Speaker 1>He's co author of the award winning book the next Africa.

0:07:35.440 --> 0:07:38.680
<v Speaker 1>I'm Kathleen Hayes. This is taking stock and this is

0:07:38.800 --> 0:07:47.120
<v Speaker 1>Bloomberg coming up. Bloomberg Law brought to you by a

0:07:47.120 --> 0:07:49.200
<v Speaker 1>Bank of America. Merrill Lynch seeing what others have seen,

0:07:49.240 --> 0:07:51.960
<v Speaker 1>but uncovering what others may not. Global research that helps

0:07:51.960 --> 0:07:54.760
<v Speaker 1>you harness disruption, but a top global research from five

0:07:54.840 --> 0:07:59.840
<v Speaker 1>years running. Merrill Lynch, Pierce, Finner and Smith Incorporated. It