Sharing drives Africa’s rising
3 sharing economy principles
to tap into for doing business
with the Africans
While the future prospects for the Western societies look rather dark, the developing countries seem to continue their rising. Africa being no exception. Contrary to the common perception of Africa (especially in the West), Africa is experiencing a huge progress. So if you are like most people, these three stats surprise you just a little bit:
- 11 of the world’s 20 fastest growing economies are in sub-Saharan Africa
- Every three years life expectancy on the continent increases by a year
- One in third of the African population belong to the middle class
These stats tell the present of Africa, not the future. According to predictions, Africa is expected to grow exponentially till 2050, confining poverty to small pockets in sub-Saharan Africa, and achieving a greater GDP than the combined one of the US and Europe at current prices. This scenario may seem unrealistic today, but accepting accelerating change, we also need to accept that we don’t have the imagination to understand how the world will look 35 years from now.
Expanding middle class, better education, deeper mobile penetration, productive urban centers and lower corruption are some of the mega trends that will lead Africa from poverty to prosperity in the next decades. The question is how you as a business, organization, investor or private person can take part in the party and contribute to the progress.
The short answer is: Tap into the sharing economy and utilize its three fundamental principles: Caring communities, access, and co-creation.
1. Caring communities
The world’s natural resources are threatened; it’s a fact. We can’t continue depleting, being short-termed, greedy and selfish. It’s no longer an opportunity but a necessity to do good and take common responsibility. We need to enlarge our common consciousness and accelerate our humanity; and those who don’t, will be the losers of the future.
In other words, we need to take the leap from “ME” to “caring communities”.
The notion that “it takes a village to raise a child” is very saying for the African culture and is a main reason why the new (and at the same time age-old) sharing economy represents huge business opportunities in Africa. Already today, the sharing economy (digital peer-to-peer collaborative networks) is well-adapted in many parts of Africa. One example is OurHood, an online notice board for local communities in South Africa. The network allows residents to connect and engage in various topics relevant to their community, as well as share resources, sell goods and report crime. Global brands such as Airbnb and Uber have also made a successful entrance. Uber has even expanded its primary service, transportation, and tapped into branded collaboration, e.g. with Filo, a frozen yoghurt company. That means that many South Africans are now able to have their frozen yoghurt delivered at their doorstep.
However, African consumers are demanding more than a one-size-fits-all approach: they’re looking for social platforms that address their niche interests and concerns. This trend clearly shows in African radio behavior, which is both hyperlocal and hyper-emergent. For instance, Blakk Rasta has become one of Ghana’s leading broadcasters by focussing solely on the listening needs of taxi drivers, and in Nigeria, Imo State’s Nnaemeka Ikegwuonu has built a radio station for farmers run by farmers.
Putting it short, in order to do business in Africa you must be able to understand the deeper cultural levels of the specific audience you are targeting. Further, you must not underestimate the Africans’ desire for togetherness and connection with others; being part of a caring community is the core of African culture.
Why own when you can share? Wealth is no longer a matter of ownership but of access. In the West, this premise seems hard to adapt (or return to), while it again fits well with the African culture. The fact that Africans haven’t been through the same levels of consumption as people in the West now seems to be an advantage.
In the last decade, mobile connectivity and the digital world have been in overdrive across the continent. For instance, the number of Internet users has increased explosively from 4.5 million in 2000 till 80,6 million in 2008, and according to estimates there will be one billion mobile devices in Africa by 2016. (Today, the population is 1.1 billion).
Overall, this means that most Africans will have access to the world from their hand within a few years. And access sees no limits; access to friends, strangers, brands, products, information, tools, payment, learning, doctors, etc. This mobile penetration will have huge impact on the African lifestyle and standard of living. Imagine what it will mean for education or for the health care sector. It will also lower corruption remarkably, as citizens will become both more informed and powerful than ever before.
So, from a business perspective there seem only reasons to take a serious look at how to tap into this ever-increasing networked Africa. The question is how — how to engage, connect and co-create with the Africans.
First, as mentioned, it is essential not to perceive Africa as one big culture, but to understand the different sub-cultures and niche needs that apply to the different countries, areas and specific segments. You can obtain this insight through online communities, but most likely you have to go for a real field trip too, employing your ethnographic abilities.
You may also want to assert how to capture the youth of Africa. As in other parts of the world, young people are the engine driving society’s adoption of technology. However, what is different about young people in Africa and the rest of the world is their high percentage. Today, over 50 per cent of Africans are under the age of 25, and the number shows no signs of changing over the next decades. Another important condition is the growth and gradual stabilization of Africa’s middle class. By 2030, Africa’s new middle class will number more than 300 million people. Defining for Africa’s middle class is that it primarily consists of small, independent business owners.
Taking these facts and predictions into account, to strengthen African’s already strong entrepreneurship seems to be the way to go. In other words, micro-financing and crowd-funding seem the obvious models, for instance through kiva.com and kickstarter.com.
Summing up, the sharing economy represents great opportunities for doing business in and with Africa. Today, and even more in the future, value is created through collaboration, connectedness, communities and connectivity, and is grounded in the ubiquitous mobile penetration and economies of scale.