The Africa Report By Quentin Velluet
Philanthropy, support for entrepreneurship, business experiments… Since 2017, Alibaba’s founder has been leading multiple initiatives on the continent. Are we just seeing the beginnings of a more ambitious project?
“Standing too close to the elephant”, as the saying goes. A lack of hindsight that prevents us from grasping a situation as a whole, but only in pieces, like a puzzle with a lost model. In this case, the elephant’s name is Jack Ma and the puzzle is composed of the seemingly contrasting elements of his ambition in Africa.
While preparing for the mega IPO, initially scheduled for 5 November, then postponed in the face of Beijing’s intervention of his company Ant Group – the largest listing in the history of finance, anticipated at $30bn – the founder of the multi-billion dollar e-commerce giant Alibaba, has maintained continuous attention while inching closer to the continent.
In mid-October, his foundation announced the ten finalists of the “Business Heroes of Africa” competition, endowed with $1.5m per year, among whom was Cameroonian financier Cyrille Nkontchou, founder of the educational network Enko Education. A few months earlier, he had made a donation of masks, kits and respirators for countries on the continent.
By the end of 2019, Ethiopia had joined Rwanda as a hub of the Global Electronic Commerce Platform (eWTP), the trade component of Alibaba’s African strategy.
A vast chessboard
Simple philanthropic will, disinterested support for entrepreneurship, commercial experimentation, even underhanded deployment of Beijing’s “soft power” … The interpretations of Jack Ma’s ambitions in Africa are as varied as they are incomplete.
To the curious-minded, the 56-year-old former English teacher and head of a fortune estimated to be worth some $50bn, reminds people that his actions are mainly a question of giving back what he received.
“When you have more than a billion dollars, the rest of society expects you to spend it wisely. It becomes a responsibility,” he said last year as he stepped down from Alibaba’s presidency to focus on his philanthropic activities.Africa InsightWake up to the essential with the Editor’s picks. Sign upAlso receive offers from The Africa ReportAlso receive offers from The Africa Report’s partners
So this infatuation for Africa – which he first visited in 2017 – would be in line with that of other billionaires, such as American Bill Gates, who also “discovered” the continent later in life.
But it’s not that simple.
When analysing the Chinese billionaire’s career, from his public speeches, the business model that has made the strength of Alibaba (e-commerce mammoth with a billion customers) to the insights provided by his long-time collaborators, an image of a vast chessboard of continental dimensions begins to appear, of which Jack Ma fills the grid with small steps, but calculated and thorough ones.
“According to him, African companies and markets are not so different from China 30 years ago, where there were few solid structures capable of combining retail, logistics, financial and banking services,” says Brian Wong, an earlier employee who joined Alibaba in 1999.
“And since we’ve been there in China, it should be possible to structure an e-commerce service across Africa,” adds the former vice-president of the group, who he left in August.
A pan-African eco-system based on the Alibaba model
It’s in the corridors of the Hangzhou headquarters that a strategy is being created from 2018 onwards to set-up the conditions for a future pan-African business ecosystem based on the Alibaba model.
“The main goal is to connect people by building what I call two-sided platforms, i.e. marketplaces. The more suppliers you have, the more buyers you have, and vice versa. In Africa it’s the younger generation that has to create this and Alibaba doesn’t have to own anything. What we hope is that they create their own economy so that we can then help them connect to the Chinese market,”says Brian Wong.
At the same time, they are lobbying the governments of Ethiopia, Botswana, Togo and Rwanda in the form of workshops on this “new economy”.
The goals are twofold. Firstly, make Jack Ma the mentor of the most innovative African entrepreneurs, through a type of storytelling that promotes entrepreneurship and is capable of inspiring the continent’s new middle classes. These young entrepreneurs, already familiar with the Alibaba method and the Jack Ma style, will be able to, come tomorrow, to makeup the supplier base of a future African platform, affiliated to the Chinese giant.
Secondly, the Alibaba founder is meticulously weaving links – for the moment loose but soon to be tightened – with the ruling elites, to foster a certain benevolence towards him, but also to lay the groundwork for a future of more fluid cooperation.
The ‘Heroes of African Business’: a pool of possible partners
And what better promotion and recruitment tool than a televised competition relayed on social networks? Starting in 2018, the Africa Netpreneur Prize (ANPI), began rewarding several promising young start-ups during a show called “Africa’s Business Heroes”. Recorded in Accra and hosted by a professional presenter, the event reflects the eccentricity of its creator.
Every year, the ANPI allows the maestro of e-commerce to detect tens of thousands of start-ups. “We received 22,000 applications for the ANPI this year, compared to 10,000 last year. These come from the 54 countries across the continent and 30% are from French-speaking Africa,” says Jason Pau, Director of International Relations of Alibaba.
Broadcast for the first time in November 2019 on a channel of the Chinese television group StarTimes, this competition brings together, over the course of two one-hour episodes, ten start-up entrepreneurs who come to present their concept in five minutes to a jury composed of Jack and his right-hand man, Taiwanese Canadian Joe Tsai, co-founder and executive vice-president of Alibaba, as well as other major African bosses.
For the occasion this year, the billionaire drew from his network built during conferences at the World Economic Forum in Davos, the United Nations or during his travels across the continent since 2017 (Kenya and Rwanda in 2017, South Africa in 2018, Togo, Ghana, Ethiopia and Nigeria in 2019).
Members of this year’s jury include the Nigerian Ibukun Awosika, President of First Bank of Nigeria (3rd largest bank in the country, $17bn in assets) and the Zimbabwean telecom magnate, Strive Masiyiwa, founder of Econet, as well as experts such as Senegalese women, Marième Diop of Orange Digital Ventures in Africa and Fatoumata Bâ, founder of the start-up Janngo (entrepreneurship, e-commerce).
Two South Africans are also present: Renée Parker, CEO of RLabs and Fred Swaniker, founder of the African Leadership University school network.
At the end of two one-hour episodes, jurors reward participants with checks ranging from $65,000 to $250,000. One hundred seedlings are expected to be funded over the next 10 years, representing an investment of up to $100m, according to some estimates.
The second season of the programme will air in December.
For the Chinese boss, who doesn’t hesitate to “corner” the candidates or give them advice, this showcase is an opportunity to perfect his image as a mentor: “He still sees himself as a teacher and loves ‘teaching’ in emerging countries,” notes Duncan Clark, author of a biography of Jack Ma published in 2017.
In addition, in 2017, the Chinese tycoon launched a $10m investment fund for start-ups on the continent, an amount still small enough to give impetus to a real venture capital project, but large enough to represent another communications showcase.
Rwandan experimentation ground
The ANPI also allows Jack Ma to identify African products and entrepreneurs who can boost their business by exporting to China via the eWTP project, the trade component of Alibaba’s Africa strategy.
The eWTP’s African counterpart is led from Hangzhou by Dean Diabaté, a Frenchman of Ghanaian-Malian origin trained at INSEEC in Paris. It is perhaps Jack Ma’s most promising initiative, as it goes to the heart of Alibaba’s business by seeking to organise the production and appropriate distribution channels of producers and traders from various countries around the world. Rwanda and Ethiopia are among the first countries to test the concept.
“In the first year of the eWTP experiment, we exported 8,370 packages of coffee, at a price four dollars higher than the conventional market. Thirteen tons of chilli and 14 tourist trips were also sold through Alibaba [Freshippo for chilli, Tmall for coffee, Fliggy for travel] network,” says Clare Akamanzi, executive director of the Rwanda Development Board.
Initial results are still humble, but the small Central African country continues to be the testing ground for eWTP on the continent. Jack Ma was scheduled to visit the small Central African country for the third time in March 2020, before the COVID-19 pandemic prevented him from doing so.
For this project, which should help develop exchanges on the platforms of the Chinese group and whose logistical efficiency was demonstrated at the end of March in Ethiopia during an operation to send equipment to fight against the pandemic, Alibaba pays almost nothing.
“The eWTP is an idea that we put on the table at the G20 summit in 2016. It is driven by various private sector stakeholders,” says Brian Wong, confirming that Alibaba’s only investments in Africa – minor in his view – are in training and business partnerships.
New digital Silk Roads
Some are quick to “place” eWTP within the broader framework of the Belt and Road Initiative, President Xi Jinping’s New Silk Roads, in particular the Digital Silk Road (DSR) launched in 2015.
Although he is a member of the Communist Party, Jack Ma readily distances himself from political issues. But like it or not, he is nonetheless seen as associated with Beijing’s expansion effort in Africa.
In any case, the “new world” that Jack Ma wrote about in January, provides the “e-infrastructure” necessary for entrepreneurs, governments, and education, he says.
If he wins his bet, his Alipay mobile payment platform (deployed by Ant Financial Services Group) could play a central – and rewarding – role.
Since 2019, the application has been connected to the continent’s main payment infrastructures and services such as Safaricom’s M-Pesa and Vodacom, Ecobank’s RapidTransfer service, and Flutterwave. In South Africa, Ant Financial Services Group is even trying to create a local application in duo with Vodacom.
African headquarters for Alipay in Kigali
Negotiations are also under way for the setting up the African headquarters of Alipay in Kigali. Objective: patiently complete the ecosystem by offering a payment solution available on all banking and financial services.
We have set the goal that Alibaba can last 122 years, thereby carrying on for over three centuries.
Taking leave of Alibaba’s management in September 2019, Jack Ma expressed his wish that Alibaba could “participate in the new wave of globalisation in the future, by helping companies around the world to sell their products and by providing them with financial support”.
He also recalled the ambition that had been displayed from the first years of the group founded in 1999. “We have set the goal that Alibaba can last 122 years, thereby carrying on for over three centuries,” he said.
By 2100, Nigeria will have surpassed China in terms of population, according to some projections; and sub-Saharan Africa will have doubled China and India combined. The Chinese typhoon is well aware that he will not be present at that point in time. But to those who know him understand: one can never discourage the founder of Alibaba, “Crazy Jack”, the man with the all-knowing and eternal smile.