Thought Leaders in E-Commerce: Mall for Africa CEO Chris Folayan (Part 6)

Sramana Mitra: There are two trends that are holding e-commerce back in India. India is getting a lot of investments right now. There is one major company that has emerged called Flipkart that is doing very well. Amazon has announced that they’re going to invest $2 billion. There are two major issues in Indian e-commerce. One is the Indian consumer does not like to pay by credit card. It’s a cash-on-delivery e-commerce market. Two is the logistics. There is no equivalent of a delivery service like UPS in India. What are the counterparts of that situation in Africa? How comfortable are people with paying online versus cash on delivery? What is going on in the logistics side of e-commerce?

Chris Folayan: Very similar to India, Nigerians and Africans are cash-centric. People are not comfortable putting their credit card numbers in any browser no matter what kind of security you have. We ended up creating something called the Mall for Africa Web Card, which is a card that you load. Just think of it as your debit card. You have to put funds into it and only those funds that are in the card can be used on the platform. A good 90% of our customers use the Mall for Africa Web Cards to make purchases because they are not comfortable putting in their credit card information and giving people access to their entire bank account. They’re more comfortable in putting the equivalent of $200 into an account with us and limit their exposure to that. I do think that with the generational changes, you are seeing more people get more comfortable putting in their credit card number.

Sramana Mitra: It’s a very slow process though.

Chris Folayan: Exactly. It’s a slow process.

Sramana Mitra: What is the usage model of the Mall for Africa Web Card? If a person wants to load up, is that person doing it online or going somewhere to load up?

Chris Folayan: They can actually do it online. They can transfer the funds from their bank to our bank account with their account number. Most people don’t do that. Most people will actually go to the banks and deposit the funds physically into their Mall for Africa accounts. Most people are still going to the banks even if they can do it online. I would say about 20% of our customers do the online transfer.

Sramana Mitra: What do you need to do then? You need to have relationships with all the banks to be able to support this?

Chris Folayan: We do. We do have relationships with all the top banks.

Sramana Mitra: On the logistics side, what’s the story?

Chris Folayan: Similar to India, you don’t have addresses. In Nigeria, you see addresses like ‘behind this building’ or ‘by this landmark.’ Addresses are not legitimate. You have people who name streets with their own names just because they want to. What we’ve done is have what we call pick-up locations. We have three Mall for Africa pick-up centers in Nigeria where you go and pick-up your item. When you place your order on our platform, you can select to have the item delivered to your doorstep or delivered to a pick-up location. Most of our customers select to have the item picked-up. It’s just easier.

Sramana Mitra: It’s cheaper for you.

Chris Folayan: It’s much cheaper. We do offer door-to-door delivery. When the item gets to Nigeria, we then call the customer. We get a good idea of exactly where they live. Then we make an appointment with them to make sure that they’re at home. It’s a much longer process.

Sramana Mitra: Interesting. Thank you for your time.

This segment is part 6 in the series : Thought Leaders in E-Commerce: Mall for Africa CEO Chris Folayan
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