The Mother Of Nigerian E-Commerce Gets A Leg Up From Facebook

It takes a Nigerian woman as much as two hours to make Jollof rice: You need to clean the tomatoes and peppers, grind them together, and stir fry with oil and onions. After you boil long-grain rice with the mixture, you’ll have a well-loved West African staple.

EasyShop EasyCook can cut that time by a third, its founder says, and take care of buying the tomatoes and peppers from the crowded market in Lagos, too. Founded in 2005, Saudat Salami’s company gained a foothold in the fast-growing market of professional women in Nigeria with an online platform that allows people to place orders for vegetables and specify whether they should be prepped for cooking.

But Salami couldn’t afford to scale up her marketing via radio or television.

About three years ago, Salami got a piece of valuable advice from a mentor at Vital Voices: Try Facebook. The first year, her revenues grew 30%, and the company had held its own or grown since despite a recession in Nigeria, according to Salami.

 Americans love to hate Facebook, the $28 billion company that has been blamed for declining happiness, fake news and the everyone’s time crunch. But Facebook’s story plays out far differently in other markets – and in poorer communities in the United States — where the question isn’t how people should use their time, but how people can bring in income.

The future of Facebook is almost certainly with people like Salami. Of Facebook’s 5 million advertisers, 70% are outside the United States. The countries adding the most advertisers in raw numbers, relative to 2016, are the United States, Brazil, Thailand, Mexico and the United Kingdom. But the countries growing fastest are India, Thailand, Brazil, Mexico and Argentina.

 In developing countries that aren’t creating enough jobs for their young people, entrepreneurship is one of the signs of hope:  Babson College’s Global Entrepreneurship Monitor found, for instance, that 40% of adults in Nigeria were involved in a startup.

Salami, who is sometimes called the mother of Nigerian e-commerce because she started her business more than a decade ago, is tapping into that market of professionals and entrepreneurs, especially women. She spends as much as $200 a month on Facebook ads: When she does, she gets about 10-12 new customers, which makes her marketing cost per order about $17. With an average basket of $140, and considering the long-term value of each customer, her ROI is over 100%.

Other platforms – like radio and television — are out of reach for her. “I wish I had more money to do this monthly, but at the moment, I don’t. It is far better than not doing anything or paying more on other platforms,” she says.

EasyShop EasyCook now has $320,000 in annual revenue, and 25 employees who take home $200 a month in average salary, in a place where the minimum wage is $60 a month.

It’s a far different view of Facebook than the one that exists in the developed world. This year, there is a new line of criticism: serious questions are being raised about how well Facebook protects its users’ privacy; Share Lab released chilling research on how Facebook’s data works. When Sheryl Sandburg, COO, noted a couple of years ago that Facebook was synonymous with the Internet in some developing countries, and Facebook issued a report on its economic impact, it was roundly criticized.

None of this has stopped Facebook’s growth: the company has quadrupled in user base since 2010. It now has  2 billion users and stores a reported 300 petabytes of data. Its profit margin of nearly 40% drops jaws. In 2016, it had $10 billion in net income.

In my first month of reporting on Facebook, including an interview with Dan Levy, vice president of small business, I found Facebook transforming small businesses here and abroad.

It is enabling the switch to mobile: Like many companies, Facebook is throwing its weight behind mobile development. Some 50% of its 5 million advertisers are creating ads on mobile devices, up from 40% last year. “The real key and the reason that 5 million plus business can advertise on Facebook every month, is because it’s just the simplest solution out there, on your mobile phone, for reaching customers anywhere in the world.”

 The implications of the switch to mobile are profound. The more you can deliver computing power in cheaper ways – a mobile phone is cheaper than a laptop – the more you can put power into the hands of people who don’t have money. The cost of starting a business falls every year, and Facebook’s push to enable small businesses to create ads from a $700 mobile phone instead of a $2,000 laptop is part of that.

It is turning companies into communities. Love Your Melon, a Minneapolis-based apparel company that sources to U.S. manufacturers and donates half its profits to cancer causes, has grown what will be a $40 million revenue company this year with no physical store except for Facebook. The clothes are almost beside the point: What Love Your Melon’s customers want is the experience of being part of a cancer-fighting community. It’s unlikely the founders ever would have discovered that desire and been able to hone the connection to customers without Facebook’s analytics.

It is enabling micro-multinationals. In Vietnam, Levy pointed out, there is a community of small companies that sell T-shirts. They use Facebook to target, say, specific sports fans, new parents, or people in the market for a novelty gift. “The theme is, with very little infrastructure you can setup and run a micro-multi-national,” he said. In May, Facebook introduced tools that allow businesses to target customers across borders, including Lookalike Audiences.

Facebook, and its subsidiary Instagram are making it easier for women to go into business. In a report issued with the OECD, Facebook found women were using digital tools to growth businesses more than men. “Digital helps equalize the playing field, since businesses can reach out to customers all over the world without investing significant resources or confronting binding cultural norms.” I found this to be true in my reporting in the Middle East, where women face high barriers to starting their business. In Saudi Arabia, women were using Instagram to run businesses from home; in Dubai, a woman built an events-based business on Facebook, and in Palestine, a woman marketing olive-leaf jewelry on Facebook.

For Salami, it’s about cost. She has been unable to raise funds for EasyShop EasyCook, so she has bootstrapped her company so far. Facebook has its downsides, too: the platform requires that she keep up with users’ comments – and people attack more easily online. She’s also often solicited by farmers who want to supply her company, though she doesn’t have the scale to buy from most of them. But for her, Facebook is the only real option.

Before she was using it, “I had to join a number of women’s organizations to find customers,” she said. “But referrals can only take you so far.”

 

Source: www.forbes.com