Extended family, clan systems, and tribal networks mean that many Africans are rich in the most valuable commodity of the Sharing Economy: interpersonal trust.
Thanks to Uber, Lyft, and AirBnB, the global sharing industry is expected to swell to a $335 billion industry in the next five years. Aside from seeing phenomenal future growth in the global sharing economy, there are other global sharing trends happening. Let’s crack them open.
For starters, the global sharing economy has exercised dominance in markets across Northern America, Europe, and Asia; however, things are spreading rapidly. If you haven’t heard, there is a fourth major continent set to disrupt the global sharing economy. Not sure who? Try Africa on for size.
With a strong youth population and a growing middle-class, Africa has several markets primed to offer huge growth for sharing brands. And the numbers are mind-boggling. Let’s do a deep dive into some of the numbers.
Let's Get to the Facts
According to an EOS-Intelligence report published by the Emerging Markets Investors Association, “[in] 2016, Airbnb alone witnessed a 95% rise in the number of house listings in Africa. Moreover, the number of users of its online platform reached 765,000 in 2016, witnessing a 143% y-o-y rise, and is expected to further expand to reach 1.5 million registered users by the end of 2017”. And that’s not all….
In that same report, since 2013, Uber “has has expanded into 15 cities across eight African countries in a span of just four years and has over 60,000 partnering drivers across the continent.” That’s a lot of moving and riding going on. But what makes Africa such a hotbed for movers and sharers? The answer may surprise you — or not.
Sharing Isn't New to Africa
If you really, really know Africa, then you know that Africans aren’t oblivious to sharing. In the article How Africa can Inspire the Future of the Sharing Economy, Tariq Hilal writes: “the peer-to-peer sharing economy in Africa has been booming long before Uber, Lyft, or Airbnb came on the scene. Indeed, it is worth reminding ourselves that for all the talk of disruption, “…hosting visitors from out of town, sharing food with visitors, giving someone a ride, or borrowing money from a peer are hardly new human activities.”
Tarig Hilal continues in that same article by digging into the trust factor: saying: “Extended family, clan systems, and tribal networks mean that many Africans are rich in the most valuable commodity of the Sharing Economy: interpersonal trust. Take, for example, the most basic social unit: household size; a typical African household is on average more than twice the size of its European equivalent, and this does not account for the network of extended family, clan, or tribe within which most African households are embedded.”
Further stated in the Global Consumers Embrace the Share Economy survey, shared by EOS-Intelligence, “68% of respondents in the Middle East and Africa region are willing to share their personal property for payment, while 71% are likely to rent products from others. These numbers are much higher in Africa than in Europe and North America, wherein only 54% and 52%, respectively, are willing to share their possessions for pay and even fewer (44% and 43%, respectively) are interested in renting others’ products.”
Although there are lots of non-native African sharing companies doing business on the African horizon, there are plenty of homegrown African brands doing big business too. Little Cabs, for example, is one of them.
African-Based Companies are Sharing...and Succeeding
Little Cabs is an app based ride-sharing service that stands to rival Uber, Lyft and other players on the market. And they’re not making it easy for non-native competitors like Uber to come in and simply dominate. In fact, some studies suggest that homegrown brands are winning the sharing economy outright.
According to Kenya’s booming digital sharing economy, an article published by the African Business Magazine, “[in] just five months the company, Little-cab has acquired 2,500 drivers with cars, and 90,000 active accounts.” And they’re not the only ones.
In Ghana, Swiftly has emerged as a leader in the sharing of shipment containers. By locating empty space in shipping containers, Swiftly cuts down shipping inefficiencies, and makes shipping accessible for individuals who could otherwise not afford to do so. According to the Swiftly website, “… it is easier and cheaper to ship anything, anywhere IN THE WORLD”.
Interestingly, when you drill down into the numbers, some African sharing brands are blocking market entry for their competitors and covering more ground, fast. Take Accommodation Direct, a South African house sharing brand that has successfully secured 20,000 listings in a single country in Africa. On the other-hand, there competitor Airbnb has only secured 77,000 listings throughout the entire continent!
What's the Takeaway?
Clearly, African sharing brands are profiting considerably from local partnerships and their native knowledge of the people and the economy there. Though African sharing brands have the home-field advantage, the global sharing economy stands to profit from it — homegrown or not.
The question now becomes, is sharing enough to sustain the African sharing economy? Or will the emergence of the African sharing economy disrupt competing industries vital to African socioeconomic development? Perhaps well’ll delve into that in another article.
Header Image Courtesy of: Upsplash
This blog post is written by Ye! Community Contributor, M. Nick Norman and can also be found on his Medium Page.