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Author Jake Bright on Race for E-Commerce Into Africa (Audio) · Bloomberg Intelligence

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  Speaker 1: four seven percent. And that's a Bloomberg Business flashing to
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  Speaker 1: taking stock with Kathleen on Bloombird Radio. As the technology
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  Speaker 1: wave continues to sweep across Africa. We're very happy to
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  Speaker 1: welcome back to the show Jake Bright. He is joining us.
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  Speaker 1: He's co author of the award winning book The Next Africa.
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  Speaker 1: He's a contributor at tech Crunch and The New Yorker,
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  Speaker 1: and he is constantly writing and speaking on business, politics
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  Speaker 1: and foreign affairs. But of course for the last few years,
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  Speaker 1: Africa has been his focus. So Jake, welcome back. Great
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  Speaker 1: to be back. Well, uh, the race for e commerce
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  Speaker 1: in Africa. You broke a couple of stories this week.
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  Speaker 1: One of them is about eBay. What's going on, yeah,
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  Speaker 1: story of tech Crunch. eBay is expanding in Africa through
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  Speaker 1: a partnership with an African startup called Mall for Africa
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  Speaker 1: dot Com, which basically what Mall for Africa does is
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  Speaker 1: takes all the headaches that American retailers face when they
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  Speaker 1: try to enter an African market with logistics, with payments, etcetera.
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  Speaker 1: And it has a platform that makes it all easy
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  Speaker 1: for them. So eBay is going to be able to
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  Speaker 1: sell American eBay vendors will now be able to sell
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  Speaker 1: to African clients um starting in Nigeria and Ghana and
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  Speaker 1: Kenya through them All for Africa's platform, All for Africa
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  Speaker 1: will do logistics, payments in marketing and will eventually expand
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  Speaker 1: that further and will eventually open up the platform to
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  Speaker 1: allow Africans to sell stuff into the US. Africans to
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  Speaker 1: sell stuff into the U s well, what kind of
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  Speaker 1: stuff will they sell? Well, what you have going on
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  Speaker 1: is you start to get into the value proposition of
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  Speaker 1: African commerce and really when you break it down, you
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  Speaker 1: have an upside and a downside. The upside is that
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  Speaker 1: Africa's consumer markets are really starting to define themselves. By
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  Speaker 1: Mackenzie Stats, they're expected to spend a round a billion
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  Speaker 1: one trillion four by seventy five billion of that is
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  Speaker 1: expected to be online. So that's the upside. The downside
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  Speaker 1: is that most of Africa's consumer markets are largely informal,
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  Speaker 1: meaning completely off the grid barter cash exchange, and many
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  Speaker 1: of the countries that have the most potential or these
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  Speaker 1: e commerce startups like Mall for Africa or eBay want
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  Speaker 1: to go into, they lack a lot of the baseline
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  Speaker 1: infrastructure that e commerce startups completely take for granted here
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  Speaker 1: in the US, and that includes you know, low internet penetration, UH,
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  Speaker 1: third party delivery systems, and also in some cases you know,
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  Speaker 1: even electricity. So it's it's a huge challenging opportunity and
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  Speaker 1: that happens in every market, but in Africa, the contrasts
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  Speaker 1: and the darkness between the challenges and the opportunities of
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  Speaker 1: tapping consumer markets are even greater than other places in
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  Speaker 1: the world. But a lot of African set phones now,
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  Speaker 1: well that's part of the shifting horizon, right. So what
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  Speaker 1: you're getting into is you have some core economies um
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  Speaker 1: that have really started to shape up and reform, places
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  Speaker 1: like Nigeria, which is really Nigeria is kind of the
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  Speaker 1: central point for this this e commerce um you know venture.
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  Speaker 1: And the reason why is Nigeria, for all of its challenges,
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  Speaker 1: has these dual distinctions that you can't get away from
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  Speaker 1: if you're a global business. That the first is that
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  Speaker 1: it became Africa's largest economy in twoteens through passing South Africa.
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  Speaker 1: And the second is that it's Africa's largest population UM.
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  Speaker 1: But the you know, the the challenge on that is
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  Speaker 1: that again you have low broadband penetration, you have a
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  Speaker 1: lot of Africans actually have have phones this is this
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  Speaker 1: is where you know the breakdown comes. Most Africans have
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  Speaker 1: phones now, but very few of them are smartphone or
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  Speaker 1: internet equipped. But you're now starting to see that shift
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  Speaker 1: happen where large percentages of Africans are going to start
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  Speaker 1: moving to smartphones and being connected. And these are all
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  Speaker 1: the things that these e commerce startups um like eBay
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  Speaker 1: and Mall for Africa are trying to tap as they
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  Speaker 1: shift into Africa. Because another story you worked on was
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  Speaker 1: in New York or um last quarter Africa mented its
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  Speaker 1: first one billion dollars start up Unicorn Jumior Group. UH
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  Speaker 1: big funding round like three and a quarter million dollars.
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  Speaker 1: Goldman and others were in on it. How how people
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  Speaker 1: milestone is that? What does this tell us? I mean,
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  Speaker 1: it's huge. If you know, I was just thinking you
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  Speaker 1: and I started talking about this, you know, emerging African
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  Speaker 1: business narrative several years ago here on Bloomberg and when
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  Speaker 1: we started, we would never have imagined it was. It
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  Speaker 1: was just starting to even define that there was economic growth,
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  Speaker 1: that there were markets that were gonna start attracting you know,
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  Speaker 1: Western companies more. But if we would have said to
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  Speaker 1: ourselves then um, you know in several years, you're going
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  Speaker 1: to have a real tech scene. You're gonna have Goldman
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  Speaker 1: included in a funding round for Africa's first startup, Unicorn.
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  Speaker 1: I don't think we would have believed it back then.
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  Speaker 1: So these are huge movements for the continent. Then of
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  Speaker 1: course there's a lot of expectation and now these companies
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  Speaker 1: like Junia, which is now Africa's first billion dollar startup,
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  Speaker 1: has to actually demonstrate that it can generate revenue and profit.
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  Speaker 1: It's generated, it's it's demonstrated can generate revenue. But of course,
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  Speaker 1: like all e commerce startups, the big one is actually
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  Speaker 1: going from in the red to in the black. So, uh,
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  Speaker 1: the this whole this this bigger question though of e
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  Speaker 1: commerce and tech models and the growing tech ecosystem. Where
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  Speaker 1: is that now in its evolution and where is it going?
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  Speaker 1: It's very nascent um. Africa has, as you say, this
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  Speaker 1: tech ecosystem that's really had a tremendous amount of growth
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  Speaker 1: just in the last five years. And one of the
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  Speaker 1: things co author Abrey Ruby and I did in our
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  Speaker 1: book was trying to break down what is this emerging
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  Speaker 1: African tech ecosystem. So some of the building blocks are
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  Speaker 1: there's a lot of innovation hubs, around two hundred that
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  Speaker 1: have started to sprout up across the continent. You have
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  Speaker 1: a startup boom in Africa right now, m similar to
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  Speaker 1: the US in late nineties. It's a huge informal economic space,
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  Speaker 1: and you have a lot of entrepreneurs, many of whom
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  Speaker 1: and I think we've had some one on there here,
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  Speaker 1: many of whom are dropping out of advanced economy gigs
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  Speaker 1: to go back and found startups for everything to tackle
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  Speaker 1: just about every commercial opportunity you can have, So startups
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  Speaker 1: are a big part of it. You're starting to see
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  Speaker 1: a growing amount of investment. Aubrey and I did a
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  Speaker 1: study where we captured i think between eighteen real and
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  Speaker 1: expected a billion dollars in VC investment going in to
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  Speaker 1: Africa's ecosystem tech ecosystem. And the final thing is you're
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  Speaker 1: starting to see um places where African governments are starting
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  Speaker 1: to build out I c T infrastructure and take a
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  Speaker 1: real commitment to building some kind of an environment where
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  Speaker 1: tech can thrive. Alright. Jake Bryan, thank you so much
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  Speaker 1: for joining US Opportunities Investment Opportunities in Tech in Africa.
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  Speaker 1: He's co author of the award winning book the next Africa.
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  Speaker 1: I'm Kathleen Hayes. This is taking stock and this is
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