Browse Tag

international trade

10 mins read

Kwely: Empowering Africa’s Exporters in a $250 Billion Market

Kwely is a B2B wholesale distribution platform dedicated to harnessing Africa’s extensive trade possibilities, driven by the recognition of a substantial untapped export market valued at $250 billion.

In this interview, Kwely founder and CEO Birame Sock discusses the platform’s beginnings, fueled by the ambition to transform global markets for African suppliers.

What inspired you to start Kwely?

The inspiration behind founding Kwely stemmed from recognizing the substantial challenges faced by African suppliers in accessing international markets.

Witnessing the untapped export potential of $250 billion from Sub-Saharan countries, particularly with 72% being exported outside the continent, prompted a determination to overcome existing obstacles hindering Africa from tapping into this vast market.

The vision emerged from a desire to revolutionize the global trade landscape for African products, addressing issues like poor marketing, branding strategies, and low-volume manufacturing processes. The goal was to create a transformative B2B e-commerce platform, ultimately establishing Kwely as a pivotal player in connecting African suppliers with international buyers.

Are there shifts in consumer behavior or emerging markets that could impact the sourcing of African products?

Yes, several shifts in consumer behavior and emerging market trends could significantly impact the sourcing of African products. Firstly, the global trend towards conscious consumerism and sustainability has led to an increased demand for ethically sourced and environmentally friendly products. African goods, often rooted in natural and sustainable practices, are well-positioned to meet this growing demand. 

Additionally, the rise of e-commerce and the increasing preference for online shopping provide an opportunity for African products to reach a broader international audience. With Kwely operating as a B2B e-commerce platform, it aligns with the shift towards digital sourcing and facilitates the streamlined procurement of African goods.

Moreover, the diversification of product offerings, particularly in the health and wellness sector, aligns with the growing interest in natural and traditional remedies. African products like Moringa, Hibiscus, or Baobab-based items, as emphasized by Kwely, tap into this emerging market trend.

Overall, the evolving landscape of consumer preferences and the rise of online markets present favorable conditions for the sourcing of African products, positioning Kwely strategically in the global trade landscape.

What are the primary obstacles faced by African manufacturers in entering global markets, and how does Kwely help them overcome these hurdles to meet international standards?

African manufacturers face several obstacles when entering global markets, and Kwely plays a crucial role in helping them overcome these challenges to meet international standards. Some primary obstacles include:

Limited Market Access: Many African manufacturers struggle with limited access to global markets due to poor infrastructure, trade barriers, and a lack of visibility. Kwely addresses this by developing a wide distribution network through various channels including a B2B e-commerce platform that serves as a marketplace, providing a streamlined channel for international buyers to discover and purchase African products.

Inadequate Branding and Marketing: Local suppliers often lack effective branding and marketing strategies, making it challenging to compete on a global scale. Kwely’s TEKKI Challenge addresses this issue by incubating and elevating local brands for global export. The initiative ensures that products meet international standards and FDA requirements, enhancing their marketability.

Low-Volume Manufacturing Processes: Many African manufacturers operate on a smaller scale, leading to challenges in meeting the demand of international markets. Kwely tackles this obstacle by supporting local suppliers through the syndication of multiple suppliers that all follow the same production standards and partnerships with financing programs to help support suppliers to scale up their production capacity. This contributes to overcoming the hurdle of low-volume manufacturing.

Poor Financing Options: Access to financing is a common challenge for African manufacturers. Kwely recognizes the importance of resolving this issue to scale up production. The company focuses not only on technology but also on acting as the gateway between customers and suppliers thereby pre-financing certain expenses on behalf of the suppliers such as branding development and packaging purchasing. In creating higher demand, suppliers can qualify for certain loans that would allow them to fulfill the orders.

Packaging and Quality Assurance: Meeting international packaging standards and ensuring product quality are critical for global acceptance. Kwely provides in-house packaging services, supporting local suppliers in designing export-ready packaging that adheres to global quality standards. Additionally, the company implements rigorous quality assurance processes to guarantee that products listed on its platform are export-ready through a co-packing facility which allows Kwely to ensure that the packing process meets the standards.

By addressing these obstacles, Kwely acts as a catalyst for African manufacturers, enabling them to navigate the complexities of global markets and meet international standards more effectively.

What are your primary goals or aspirations for Kwely in the next few years? 

Our primary goals and aspirations for Kwely in the next few years include:

Global Distribution Leadership: Establishing Kwely as a leading global distributor of African products, emphasizing its role as a primary connector between African suppliers and international buyers.

Market Expansion: Focusing on expanding the market presence of African products beyond the continent, particularly targeting the U.S. market. This involves strategic partnerships, engagement with major U.S. retailers, and listing products on platforms like Amazon.

Brand Incubation Success: Ensuring the success of the TEKKI Challenge and brand incubation program, elevating the quality and recognition of made-in-Africa products. The goal is to empower local suppliers, fostering their growth from small enterprises to significant players in the African industrial sector.

Economic Impact: Contributing to job creation and the development of a comprehensive ecosystem, spanning agricultural initiatives, industrial production facilities, and branding and marketing services. The aim is to have a positive economic impact on local communities.

Financial Growth: Securing additional funds through ongoing fundraising efforts to support Kwely’s expansion plans and facilitate its transition into the U.S. market. This includes projections of substantial revenue growth, with a forecast exceeding $2 million by December 2024.

Sustainability and Quality: Maintaining a commitment to sustainability and quality assurance in every stage of the export process. This involves ensuring that products meet international standards and providing a holistic solution for both suppliers and buyers.

What advice would you give to other B2B marketplace founders?

My advice for other B2B marketplace founders:

  1. Understanding the Market Dynamics: For B2B marketplaces in developing countries, delve beyond technology and comprehend the gaps between buyers and suppliers. Construct your marketplace as a bridge, addressing concerns from both sides that hindered their initial business interactions.
  2. Phased Marketplace Development: Build your marketplace incrementally. Identify low-hanging fruit in terms of products, brands, and categories. Cast a wide net to identify your first customers and refine your platform based on real-world feedback.
  3. Data-Driven Decision-Making: Embrace a data-centric approach. Implement the 80-20 rule, recognizing that a minority of your products will likely contribute to the majority of your revenue. Focus marketing efforts on high-performing products and adapt to changing market dynamics. Understand that the set of high-performing products may evolve over time or with seasons. Stay agile and adapt your strategies based on real-time insights to ensure sustained marketplace success.
  4. MANAGE YOUR INVENTORY! Only buy what you need based on short term forecasts until you have a strong handle on your customer demand.

by Tony O. Lawson

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1 min read

Strengthening U.S.-Africa Trade and Investment Partnerships

The United States Commercial Service (CS) is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration.

The mission of CS is to advance and protect strategic U.S. commercial and economic interests around the world.

Camille Richardson is a tenured Senior Foreign Service officer with the U.S. Commercial Service.

U.S.-Africa Trade
Camille Richardson, Deputy Assistant Secretary for the Middle East & Africa

She is an accredited diplomat who has served six successive tours of duty in Miami, FL; Buenos Aires, Argentina; Rio de Janeiro, Brazil; Nairobi, Kenya; Mumbai, India, and Sao Paulo, Brazil facilitating commercial partnerships between U.S. and local companies.

Camille was recently appointed as the International Trade Administrations’ new Deputy Assistant Secretary for the Middle East and Africa (MEA) region.

In this interview with Camille, we discuss:

  • Using trade and investment to grow the U.S. economy.
  • Having more U.S.-based SMEs become partners in Africa’s growth story.
  • How to access information about business opportunities in multiple African countries.
  • The trade sectors that are being prioritized.
  • A recent example of a successful U.S.-Africa trade partnership.

-Tony O. Lawson

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12 mins read

Eugene Cornelius, Jr., Senior Advisor to the Office of International Trade

If you’re an aspiring or existing business owner with goods or services that can be offered outside the U.S., you may want to consider international trade as part of your long term plans.

Eugene Cornelius, Jr., Senior Advisor to the Office of International Trade explains why.

What inspired you to create the Office of International Trade at the SBA? 

I see my position as a quintessential leader of economic development. Therefore, I must take a strong stance on economic development issues for the future of U.S. small businesses. The U.S. represents only 5% of the world’s population. That means 95% of your potential customer base is outside the country.

Innovation is continuing to change the world economies at a faster pace than policy leaders can study and analyze. Small Businesses need to be in a position to participate on a level playing field. The Office of International Trade is prepared to assist in these efforts.

There are 1.8 Billion young people under the age of 35 worldwide all competing for jobs. The world will need 40 million new jobs each year for the next 15 years to keep up with demand.  There are some facts we should acknowledge: 97 to 98 % of most economies job creators are entrepreneurs and small businesses.

As a case study, in the United States, small businesses contributed 66% of new U.S. jobs created since the recession between 2000-2017.   According to the U.S. Black Chamber, African American Businesses grew from 1.9 million in 2012 to 2.6 million today, an increase of 700,000 or 27%. Small businesses created 8.4 million net new jobs and more than double the contribution of large businesses.

40% of those small businesses were women and 70% of those women were women of color. Why is this important? Because we also know that people trend to hire people who look like, relate to, or are culturally familiar to them.

The U.S. population is over 325 million people. Nearly one- in -seven Americans identify themselves as Black or African American (or about 13% of the U.S. population). That’s over 42 million African Americans. Yet, the median income for African Americans is merely $35,000. $24,000 less than White America.  There is a clear disconnect between the growth of Black Businesses and the growth of black income or net worth.  WE MUST DO BETTER.

 

What are some things entrepreneurs can do to prepare themselves for success in international trade?

DO YOUR HOME WORK! I can’t stress that enough. Seek out others who have been where you are going. Seek mentors and network. Contact your local SBA office and state economic development office and take advantage of these resources.

What do think needs to take place to achieve successful levels of economic development in the Black community?

Continual investment in, and improvement of the African American small business ecosystem to support sustainable, home-grown small businesses and provide resources for local talent, all while enabling growth and innovation through global connectivity. We know that entrepreneurs are the job creators.

Therefore, we must truly connect with them and provide a small business “support system,” because small business is big business!

There are two essential pillars WE must adopt as a key stakeholder to the African American community:

(1) WE must invest in African American and Minority-owned banks

(2) We must change the mind set of doing business with African American businesses

Both have one thing in common and that is the circulation of Black dollars.

Number One. Access to capital is a global challenge for entrepreneurs and small Businesses.  The U.S. Small Business addresses this gap by offering loan programs specifically tailored for small businesses through a national distribution system of lending partners.

This framework enabled SBA to approve more than 68,000 loans in FY 2017 which totaled more than $30 billion to small businesses and supported nearly 630,000 jobs.  Our loan guarantees fill gaps just to show you what is possible when the government steps in to de-risk lending for our backbone of job creators.

The Bad news here is that less than 2% of those loans are with African American Banks. Over the last 20 years, very few African American businesses have been able to gain access to the predominantly white private equity, angel investors, and venture capital communities. And of course, these investors have been the drivers of innovation and start-ups fueling our economy.

If small businesses are the job creators, and we are to move to secure the future of the next generation of young African Americans, we need to direct our resources to the number one issue for small businesses: namely the disproportional lack of access to capital to and for African American small businesses.

Investing our savings deposits in Black Banks is the first and a major step in the effort. An increase in their reserves makes more funds available to our community businesses. Keeping in mind that we must keep them accountable for the circulation of those dollars back in the form of investments and loans to small businesses the job creators in or entering our communities.

Which leads directly to number two. Changing the mindset of doing business with African American Business owners.    Whether we call it, “Programed Self Hate” or “Non-conscience Bias” or by some other name, it is preventing us from more fully sharing in the American Dream and from expanding African American economic growth and higher standards of living.

Just look at most every other ethnic minority community in the United States, such as Korean Americans or Cuban Americans, and how they have banded together to re-circulate their earnings and spending within their respective communities. As I mentioned, the number one issue is access to capital.  Many Asians Americans often don’t even use traditional banks and financial institutions.

Instead, they pool their money together and provide funds in the form of investment and/or short-term loans to their community when they come to the country to open a business and employ family and friends.  Have any of you gone into the black community and seen the take-out stores, laundry cleaners, liquor stores and in some cases even the soul food restaurants and who owes them? Need I say more?

Which foreign country do you feel is the most business friendly and why?

Most American small businesses prefer to do business with our neighbors Canada and Mexico.  Europe and countries with democratic governments tend to be safe bets.  However, with the internet, we see more and more companies dip their toes elsewhere. I would recommend looking at emerging markets. Countries that have growth in the middle class and disposal incomes. Eight of the top emerging markets are in Africa

What existing policies are most beneficial to business owners and what types don’t exist but should?

We know that entrepreneurs are the job creators. Therefore, it would be in the best interest of any economy to create a small business support system.

Serving under represented communities, minorities and women is essential. The SBA has four essential pillars that every support system has:

  1. Capital Access
  2. Counseling and Training
  3. Contracting
  4. Policy and regulations 

There are trade agreements and the World Trade Organization policies to attempt to standardize international trade. However, not every country is a member or abides by the WTO standards. Entrepreneurs should become aware of the participation of the country or countries they are looking to do business with to become engaging.

What advice do you have for aspiring entrepreneurs?

DO YOUR HOME WORK

There is a wide range of support and information to assist entrepreneurs interring global markets, EX-Im Bank, the department of Commerce as well as SBA with its Export centers across the country can provide cost-saving and risk-reduction programs to assist small businesses enter markets and secure payment

https://www.sba.gov/sites/default/files/Whats-New-With-Small-Business-2018.pdf

Mr. Cornelius is the former Deputy Associate Administrator for the Office of International Trade with the U.S. Small Business Administration (SBA) responsible for administrating the oversight and execution of four program divisions:

(1) The Federal & State Trade Development Division — which focuses on the delivery and management of grants programs,

(2) The International Trade Finance Division — which provides Trade Financing, counseling, and training  with SBA’s 3 Loan programs via 21 Export Assistance Centers Nationwide,

(3) The International Affairs & Trade Policy Division — which focuses on  National initiatives, Trade policy mandates, export promotion interagency collaborative efforts, field network and outreach, and

(4) Administration & Operations with a focus on Budget, Human Resources, and Management. Duties included the development of international trade strategies and strategic plans, the leadership of the OIT and other staff in the formation and administration of policies and programs, technical direction and coordination of interagency activities with the U.S. Department of Commerce, the U.S. Trade Representative, the U.S. Department of Agriculture, the Export-Import Bank of the United States, the U.S. Department of State, the Overseas Private Investment Corporation, and other Federal, State, and local agencies.

by Tony O. Lawson

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