When I first got to Kenya, people were constantly telling me that the secret to doing well here was the kind of relationships you were able to establish. This seemed very aligned with the concept of guanxi, which was so familiar from my experiences of being an entrepreneur in China. Even though this core concept was so intrinsic and so similar in both Kenyan and Chinese culture, for some reason, it didn’t feel like the concept was applicable in the same way across the two cultures. But the more time I spend here, the more that I feel that certain differences are not as immutable as people may think, and that there are many more parallels then expected.
When Daniel, founder of Sokowatch, an e-commerce platform serving informal retail shops, first started learning Swahili, he also found some surprising similarities that helped him grasp the nuances of the language. For example, Mandarin doesn’t have articles, such as “the” or “a”, but neither does Swahili.
While the company has flourished in Kenya and Tanzania, the actual idea first started in China. Back in 2015, the initial pilot was part of a trade trip for Wrigley’s to Southwest China. They were testing whether they could use Sokowatch’s technology to track chewing gum in similar meng dian, or small, roadside shops in Guangdong and Yunnan.
The pilot program was not as viable in China, because China’s massive e-commerce infrastructure has organically fostered the growth of logistics companies, with certain online giants, like Yihaodian, growing even their own fleet of Kuai Di Xiao Ge, or delivery guys. However, because the B2C e-commerce market has not flourished in the same way in Africa, Sokowatch was able to apply their mobile technology to B2B instead. The dukas, or informal shops, are to place orders at any time through SMS or mobile app, with free delivery of goods to their shop on average in less than two hours. Sokowatch currently has over 2500 retail customers actively ordering on a monthly basis, with annualized revenue of over $1MM growing at more than 30% month-over-month for the past six months.
In fact, perhaps the biggest similarity between China and Africa is the one that stares you straight in the face— scale. It is unsurprising that such similarities of populations have brought about other inspirations as well. For example, one of the largest and successful social enterprise stories in Africa, Bridge International Academies, was actually seeded in China. Shannon May, founder of Bridge, and a Berkeley-and Harvard-trained anthropologist was doing her postdoctoral work in rural China, where she first saw children walking hours in the dark and in the cold, to classrooms where the teachers didn’t show up. When regulation made it impossible for Shannon to help solve this problem in China, she turned to Africa instead, where Bridge now runs 500 schools across the continent. The schools are designed for scale, replicating across the continent with smartphone-equipped school managers and tablet-equipped teachers that enable accountability and scripted learning.
“There is a certain level of irony that the Chinese doing business in Africa have not fully internalized the importance of ‘guanxi’ or relationships with their African counterparts. They have brought everything else here, from their own grocery stores to doctors.”
It would be easier to say that there are major differences in the edtech market in China and Africa, just because of the enormous divergence in size of edtech funding and startup activity in these two markets. For instance, in China in 2017, there was 1.77B in edtech investment in 67 companies (and 7 out of the 16 global edtech IPOs were Chinese companies). On the other hand, while the specific amount of total edtech investment is hard to come by for Africa, there were only 17 edtech deals in 2017 and the size of these deals was much smaller than in China. So, while China’s edtech ecosystem is in the avant-garde, Africa’s ecosystem is just now emerging.
However looking beyond the oft-cited funding numbers, at the root of it, there are a lot of parallels. Meredith Karazin, formerly the COO of Teach for China, who is not the Head of Growth and Infrastructure at Moringa School, also believes that more importantly, it is the same “problem” that people working in edtech in China and Africa are trying to solve—is there a way to bring about better learning through education that has some sort of technological component? For China and Africa, there are very similar dynamics at play: a large population of about 1.3B (although we’re talking about one country vs. an entire continent); a demand for more practical education that moves beyond rote learning to comprehensively teaching all the skills, both soft and technical, that meet the needs of a changing society and workforce; and educational solutions that provide opportunities for all people, no matter where they live or how far away they are from good schools and great teachers. The promise is that edtech is more effective, smarter, faster, and adaptive than the traditional educational system.
Furthermore, the opportunities are also similar. The huge growth in the number of people with access to mobile devices and connections has brought internet and technology, and thus access to information and online learning sources, straight into people’s hands. While in China that mobile penetration is already at 76%; Sub-Saharan Africa’s mobile penetration continues to grow faster than any other region with the number of unique mobile subscribers expected to reach 50% of the market to over 500 million in 2020. While family spending in education is also high in both Africa and China, the emphasis on formalized education and meritocracy is significantly more prominent in China than Africa. In China, primary to secondary education is free, but there is a lot of spending outside of the school system by parents looking to give their kids an additional educational opportunity and an advantage over peers. In Africa, school fees often eat parents’ budget, for instance with Ugandan parents spending almost 50% of their household expenditure on education. Access to technology and a high demand for education means a similar opportunity in China and Africa for edtech to bring more opportunities to learners.
In Meredith’s viewpoint, it is ultimately “this similar opportunity in China and Africa for improving learning, and thus reshaping people’s lives that has brought me to work in both markets.” While we certainly recognize the diversity of the African continent and the challenges that micro-cultures and their nuances may bring when implementing across countries and regions, perhaps more entrepreneurs should be thinking about scale in the same way many Chinese entrepreneurs approach it. Ultimately, the opportunity for technology and innovation to truly reshape an entire continent is just as relevant in Africa is it is in China.
Despite these similarities, we return to our original question, and there is a certain level of irony that the Chinese doing business in Africa have not fully internalized the importance of guanxi with their African counterparts. They have brought everything else here, from their own grocery stores to doctors. Daniel suggests that perhaps it’s because China ultimately is a cultural bubble, and as such it has desensitized them to the importance of contextualization. The relevance of other people’s points of view has not been integrated into their social conscientiousness. In fact, economic motivation does not necessarily expose cultural ignorance. Perhaps, we need to focus more on our similarities, rather than our differences, and be intentional in the way are creating a new China-Africa business culture, one that is neither wholly one nor the other, but a mix of both founded on empathy and common goals.
Stephany Zoo is the founder of the Nairobi-based China Africa Tech Initiative