Shop Africa 53: SOFTtribe to Launch a New E-Commerce Platform

Interview with Herman Kojo Chinery-Hesse, Founder and Chairman of SOFTtribe

What about Shop Africa? Are you close to launch or where are you in the construction of it? Are you planning to launch it in December?

On Shop Africa, we are finalizing the website and all the arrangements. We actually have a team in the next office from ThoughtWorks in South Africa and our technologies are being put together to deliver the products. So we are almost there; I think that the website is looking very sexy. We are working out the mechanics and the payment system. It’s taken a few years but I believe that we are almost there. I think that by December we should be able to start.

What will Shop Africa bring to the consumer?

It will basically allow any average African, especially for people in rural settings, to be able to sell their goods internationally and have them delivered and receive payment for them from any country in any currency. It is quite novel. We are in an underdeveloped part of the world so a lot of the things are green field. We are cutting new ground. For example, the payment system we are using we had to design, and the delivery system we had to innovate to have a delivery system that was cost-effective yet delivered the goods in a timely manner from Africa to the rest of the world. Some of these channels have never been opened. We are technology people really. We have had to learn so much to be able to open these channels and to make our technology work for people.

We’ve had situations such as I went for lunch today and my friend who owns the hotel and restaurant was complaining to me and asking me to help him get on the net so he can do his bookings internationally. In fact, he said he is already plugged into six or seven different hotel systems but he has a big problem. I asked him what that was, and he said that he needs me to help him because the hotel systems book him and then he has to send them money for commission and every time he has to wire them money, the charge for the wiring is more than the money he is wiring and it doesn’t work for him. I had to explain to him that in our model, he doesn’t pay me, I pay him. I take my commission and I pay you in local currency. So he said thank God because right now all these international systems don’t have local accounts in this part of the world, so it creates the need to do foreign exchange transactions and write to the Central Bank to be given permission to send US $100 and it costs US $150 to be able to send that US $100; therefore it’s not workable and his hotel has disengaged from those systems. He told me to hurry up because they are waiting for us.

So it looks promising?

It looks extremely promising. We are very excited about it.

Can you tell us about the recent robbery software system you developed?

There is crime in Africa to some extent, like everywhere else in the world, but we don’t have the resources to empower our police like in the more developed countries. So, we came up with a private sector and technology-based way of solving that problem. Essentially, for about US $10 a month, if your house is getting robbed, if you are subscribed to our system, there will be up to five phones in your house that can just call our number and one, we will immediately alert ten people around your house, your neighbours, that there is a robbery going on in your house. Your friends will be alerted, like a friend in the police force or an older brother who’s the President’s cousin will be told immediately your house is being robbed. Two, we alert a private security company, the G4S and so on, that are on our platform, so they will also respond. Three, we have a deal with the radio stations so they will be announcing “today the President read the budgets, sorry, sorry breaking news this house is being robbed now, anybody in the area go and help”. Fourth, we tell the police.

Now, under these circumstances it’s impossible to rob a house. A robber will have a very rough time because when he comes outside, the whole crowd will be outside, the security company will be there, the dogs will be there, and that kind of thing. For US $10 a month, we’ve suddenly taken security, which previously was reserved for very high-end people like Ministers and wealthy businessmen and diplomats, and taken it down to the masses. This is a product that we’ve launched and it’s one of our most promising products. It’s selling quite well.

It seems you are going towards addressing the needs of the nation and becoming more focused on people’s needs. Is that how you are moving in terms of the market?

Yes, what we are actually doing is that we are technology people and we are using technology to solve everyday African problems. In the past it wasn’t possible but today everybody has a mobile phone and a lot of people are on the internet. The mobile phone alone allows us to address all manner of people. Whereas it wasn’t previously possible to communicate with the African bush, today it’s not the case because there are mobile phones so everybody can be communicated with.

We are building products that run on that platform and bringing good-quality services at lower prices on a pay-as-you-go basis to the ordinary African. We believe it’s better to have five million clients than to have six clients paying you the same money. It’s a more stable platform and it’s also more fulfilling. We serve our people and we help the average person rather than three government contracts and one with Unilever. We like that too but we would also like to have the mass market – the bottom billion – on our platform. This is what we are achieving now.

What about the replication to other markets outside Ghana? If you started to do well, if it all works well in Ghana, it could work well somewhere else. What are your plans in this regard?

In terms of scaling, all the products that we deliver work on SMS and are off our MX platform which exists on the cloud. This means that our services are available everywhere in the world – definitely across Africa. All we need is a local partner and we are in. We don’t design systems that only work in one country; our whole outlook is an African outlook. Shop Africa 53 includes 53 countries. We are going across the continent and our technology lends itself to that.

It is in fact the case that we are in negotiations, and are implementing in certain cases, a number of our products in other countries. Some of these implementations happen without us even going there. We don’t need to be there. We get a partner and he can log into our systems. We explain to their team how it works, they roll it out and we split the money with them. The internet doesn’t recognize international boundaries and SMS also doesn’t recognize international boundaries. We are pan-Africanists. We like African unity and we are using technology to unite the continent.

Are you looking for investors to partner with you inside or outside Africa?

Yes and no. For a lot of our products, we are waiting for them to mature a bit before we start taking money from investors. In Black Star Line, which is our e-commerce company, we have an American investor who, in the beginning, put some money in with us but in a lot of cases, our partnerships are in terms of roles, for example we designed the platform for the trade and ThoughtWorks, our partners out of South Africa, are working with us. They have a team here and they are better at the look and feel than we are so we are working together to achieve it. But they are coming in with a role. We are plugged in to courier companies; they play a role and deliver the goods. We are plugged in to money transfer and payment companies; they handle the monies. We are also partners with banks who handle our payment technology on the local side because we are not allowed to do money transactions. We need to work with a partner.

If you are talking about a western-style IPO and so on, that’s a few years down the road. We are talking to a few people but selling Africa is not easy. Some of these things we are doing are so new that nobody has ever done them before. Even valuing and explaining the value to somebody who’s never seen this happen and somebody who doesn’t know Africa, which is where the bulk of the investments reside, is difficult. We don’t like the difficulty. We are certain that what we are doing is working and can only improve. When it gets to a certain stage, it will be clear to everyone and then we will do the dance.