Co-CEO of Africa Internet Holding, Sacha Poignonnec On Doing Business In Africa

 

Insight into Africa Internet Holding:

Africa Internet Holding (AIH) is a joint venture between Berlin headquartered internet incubator Rocket Internet and telecoms operator Millicom International Cellular which quickly gaining footings on the continent. It has since launched in nine African countries namely: Nigeria, Uganda, Senegal, Morocco, Tunisia, South Africa, Kenya and Ghana.

The company portfolios include online retailer Jumia, online food ordering site Hellofood, real estate portal Vamido, hotel booking site Jovago, car classified website Carmido, online marketplace Kaymu and taxi booking platform Easy Taxi.

Meanwhile, Sacha Poignonnec, the co-CEO of Africa Internet Holding was recently featured on How we made it in Africa and here is what he has to say about doing business in Africa:  

#On Africa e-commerce, Poignonnec says:

“We believe in Africa. We believe that e-commerce is going to leapfrog lots of traditional businesses. The opportunity is here.”

Challenge:

According to Poignonnec, the biggest challenge AIH faces is accessing talent.

“Is the challenge bigger than in the US or in the UK? I don’t think so. Talent is one of the scarcest resources everywhere. We are very well positioned because our value proposition as a company for someone who wants to work is very appealing. You work in an entrepreneurial setup yet it’s very structured; you work with experienced people who have knowledge and reasonable ambition.”

Market Comparison:

Poignonnec says international companies expanding into Africa not to assume things work the same way in all 54 countries.

“Africa is the most diverse continent in terms of culture, in terms of religion, in terms of consumer behaviour [and] businesses practices. The first thing is to accept there is no one-size-fits-all solution.”

“Nigeria is the biggest country [in Africa by population] but there are some great surprises. We launched Jumia in Ivory Coast [which is] a 25m people country [and] is not the richest, but it is taking off faster than Nigeria.”

The firm however plans to expand into Ethiopia, the Democratic Republic of Congo, Angola and Algeria.

Why these countries:

“[Ethiopia has] 80m people who are buying products, eating food, looking for houses , looking for cars, taking taxis… that is a market for me. There are many large corporations that are starting to invest in Ethiopia. I think it is a great market,” says Poignonnec.

“Congo is quite stable. I think the degree of instability [is low]. We are in Egypt at the moment. Is Egypt stable? Well, no, but if you step back and take the very big picture into perspective… people are eating every day, they are driving their cars and buying items, that is what we do, we are not extracting oil.”

Consumer Taste

“The Kenyan consumer is different [from] the Nigerian consumer. Everyone knows that the consumer class is growing in Africa, but in terms of their tastes, it really differs from one country to the next. I think it would be very ignorant of us to come into Africa with one approach. You need to have local flavour, you need to understand the market,” says CEO of Vamido Kenya Aneesa Arshad.

Competitors:

How we made it in Africa says the firm’s aggressive expansion across Africa comes as a threat to local startups run by individual entrepreneurs. Its closest rival is South African-based multinational media company Naspers which invested in classifieds site OLX.

But Poignonnec says:

“We spend more time looking at what we need to do to better serve our customers rather than looking at what the competition is doing. I don’t know what their strategy is.”

“We have an approach where we follow the market and we adapt our strategy to the adoption of the different services we are providing. We are growing with the market, not forcing the market. We have a long-term strategy.”

The Future:

AIH plans to expand into new markets.

“We want to be ahead of the way, but not too far ahead or too far behind. That is a challenge but it is a good one,” the AIH boss said.

“We want to have a clear horizon to reach profitability. Facebook, after one year, could have stopped growing and become profitable. It’s better to keep growing. Do we want to be profitable one day? Yes, but we want to be profitable once we have grown enough. It is a strategic decision.”