ANKA Marketplace Shows Power of Digital to Take African Businesses Global

“When you facilitate the life of the sellers, they end up selling even more.”

That has been the goal of Moulaye Tabouré since he launched Afrikrea, an online marketplace for the buying and selling of African-inspired clothing, accessories and arts and crafts, in 2017.

Today, the eCommerce platform has 50,000 sellers across 170 countries worldwide, completing over $15 million in transactions in the four years since it launched.

But the journey has not been all smooth sailing for Africa-based merchants. As Tabouré said, travelling across the different markets revealed that these retailers were often late in processing orders due to the unique challenges they faced in receiving and organizing payments from different channels like WhatsApp, Instagram and on Afrikrea’s website.

That, in addition to the high shipping costs they incurred when sending products abroad, sometimes up to 70% of the total price, explained why the biggest usage and growth was being driven by sellers in Europe and the U.S. with no shipping and payments issues, even though African merchants had cheaper products than their foreign counterparts.

That was the reason behind ANKA, an eCommerce solution for global African businesses powered by Afrikrea. Launched in April 2021, the all-in-one software as a service (SaaS) solution allows merchants to easily manage their sales and payments on one platform, as well as shipping globally at a discounted price via international courier service DHL.

And as one of the few shipping solutions that was still operating during the pandemic last year, Tabouré said the company grew exponentially, with its retailer base almost doubling from about 6,200 to 12,123 in 2020, while sellers’ Gross merchandise value (GMV) grew by 2.5X and Afrikrea’s revenue by 5X.

Apart from the eCommerce solution, he said the Côte d’Ivoire-based firm is also increasing the financial and digital inclusion of African women – who make up 80% of retailers on the platform – like Oyinkansola Bernard, the creative director of Lagos-based fashion firm Ako, whose sales have increased by 85% since joining the platform in March 2021.

Consistency is key

With over 200,000 social media followers and half a million website visitors every month, the company generates a lot of traffic, which Tabouré said is evidence of constant demand.

Supply, on the other hand, has been the main barrier to business growth. “To grow volumes exporting out of Africa, you need to have engaged and proficient sellers, people who easily respond to clients, ship, pay and properly manage their orders,” Tabouré explained, adding that that commitment to be consistent needed to reflect in their business model.

So in June last year, they changed from a commission model to a 10 euros ($11.60) monthly subscription model, hoping to encourage sellers who had long periods of inactivity to be more consistent and active on the platform.

“We see that the ones that end up selling well are the ones that not only put up new products every month, but are connected, respond to clients and are engaged,” he said. “You cannot do that if you view your selling as an exercise of getting products out once every six months.”

After experiencing some initial push back from some merchants, he said over time they have come to embrace the new model, after realizing how consistent supply helps to better understand their customer needs, achieve a higher retention and customer conversion rate, and boost their total sales volume.

Increasing client stickiness

‘Buy now, pay later’ (BNPL) might be “trendy” today, but he said they’ve been offering the payment method since 2017, and is very popular with U.S.-based buyers.

The offering makes up about 17% to 20% of their total orders, with buyers able to split the total of goods purchased into three monthly installment payments at a 10% interest fee.

The default has remained consistently low at about 5% since it was introduced, and “what we have also noticed is that our buy now, pay later users tend to start new purchases every three months. […] It’s almost like a budget they set aside every month to buy items,” he explained.

With BNPL, even though installments are collected over time, the seller can immediately withdraw the total funds from their wallet, which ensures a constant cash flow.

Earlier this year, the company partnered with Visa, through pan-African financial services group United Bank for Africa Plc (UBA), to issue ANKA-Visa cards to sellers that are linked to their money wallets.

“It [the partnership] made us realize how sticky a seller can get once a product is easy to use, you provide them with instant payout, and they are able to get their money from anywhere in the world. They suddenly start using us much more,” he remarked.

Double currency advantage

ANKA has a double advantage over competitors in the mix of currencies it has to play around with, Tabouré also said. The company receives “hard currencies” from its exports – “95% of our orders are in euros or dollars” – as well as the local currencies it receives when sellers in Africa pay for shipping.

“The banks are running after us because we’re one of the few companies in Africa that brings in hard currencies. […] In fact, people will be surprised what banks are ready to do if you’re bringing dollars into Nigeria,” he said, adding that a Nigerian seller who pays $100 to ship goods abroad and requests a payout in local currency will be able to receive it the same day.

Moving forward, Tabouré said, the idea is to offer more local payment solutions like Wave, which is very popular in Cote d’Ivoire and has seen a lot of uptake in the market. And at some point in the near future, the company will be looking to add credit to its product offering.

Because Afrikrea owns the eCommerce stack, it will be able to determine which merchants are doing well and the exact products they are selling, as well as see how their prices, response and processing time compares to other sellers. That comprehensive overview, he said, will enable Afrikrea to better determine which businesses are growing and deserve the most funding.

“Someone that is able to get every order delivered on time, withdraw just the amount of money they need to operate and keep growing their stack of funds is someone you want to fund,” he said.