How Ecommerce Is Growing Among Small and Informal Merchants in Africa and Beyond with Anu Adasolum, CEO of Sabi
How local and informal merchants in Africa can establish trust among third party providers, obtain financing, and grow in the digital economy
When you think about small businesses and local merchants, you know that they are the engine that fuels economies all over the world. This is true everywhere you look, including in Africa, where Anu Adasolum works as the CEO at Sabi, a company that is helping informal merchants and businesses reach new heights.
“Sabi is actually a business that focuses on understanding the profile and network in informal trade,” Adasolum said. “A lot of the time when people look at a business like Sabi, they think, ‘Oh, these guys are basically digitizing supply for informal traders.’ That’s not what we’re doing. We’re not necessarily a digitization play. Digitization is part of what we do. But what we really do is understand the network of the traders — who sells to who, who buys from who, who’s reliable, who is not — through different sources of information and using those profiles and our understanding of those businesses to tell third parties who trust Sabi as a business, like, ‘Hey, you know what, why don’t you extend credit to this guy? Hey, you know what, it’s worth making goods or products available to this guy.’”
For too long, the tens of thousands of small, local merchants in Africa have operated without much help, credit, or access to technology.
“It’s really difficult to profile these [merchants] because a lot of their business is not going through their bank accounts,” Adasolum said. “So people just give these crazy interest rates so that if there’s a default, they can cover it. And also because if someone doesn’t have a choice, what are they going to do? I think why that’s is, is just in general, the informal sector, although it’s 80 to 90% of most African countries economy, it’s just neglected because it’s very hard to deal with. So you know how businesses work generally, you want standardized off-take. You want people to consume from you in a way that you can manage. And the informal sector does not work that way. You can’t get someone who has been used to doing business one way their whole life and just give them an app and they’re just going to start using it.”
But while they have stayed the course, the world has moved forward toward a monroe digitally-focused future. To succeed long-term — in Africa and everywhere else — all businesses need access too opportunities to build credit, digitize their operations, and connect with suppliers and buyers everywhere. That’s where Sabi can help in more ways than one.
“The key thing here in this market is while digitization is extremely important, it’s really about understanding what the market needs is like, you know, the market doesn’t really care about your market place,” Adasolum said. “They don’t care about your app. They care about their business. And so for us, like every time we’re trying to design a product, or we’re trying to think about what we’re doing for the market. We think about teaching too, is everybody we work with. We want to be achieving one of two things. Either we’re helping you increase your income, increase your revenue, or we’re helping you reduce your costs. If we’re doing something that’s not achieving that for the users, then we have a problem.”
To hear more about Sabi, tune into Up Next in Commerce.
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