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Wednesday, November 20, 2002

Media: E-Marketing (3rd Edition): by Judy Strauss, Adel El-Ansary & Raymond Frost

eShopAfrica.com was asked to contribute  "Practitioner Perspective:E-Commerce from Ghana" to:

E-Marketing, Third Edition
by Judy Strauss, Adel El-Ansary, Raymond Frost

From Part 5 Global Perspectives
Practioner Perspective: E-Commerce from Ghana

Cordelia Salter, founder of eShopAfrica, is originally from England and has lived in Africa since 1979. For most of that time she has worked in the IT sector. In 1998 she founded a Web studio specializing in high quality Web sitres with an African theme (www.cordelia.net). eShopAfrica.com is her first e-commerce project. eShopAfrica began in Spring 2001 and is based in Accra, Ghana.

Although eShopAfrica.com is based in Ghana we are marketing to the rest of the world so the fact that credit cards are hardly used in Africa does not affect us. Until there is an easy to use ecash solution (perhaps through mobile phones which are already very popular in Africa) any ecommerce in Africa would only be aimed at a very, very small minority.

I think all of us face the same problems when it comes to getting on to search engines these days - you have to pay to get to the top. We are considering paying to be listed or paying to target advertise but we have many doubts about how many serious purchsers would actually use search engines to find the kinds of products we have. We think a well targetted real world marketing campaign may be a more effective use of our funds.

I have developed and run eShopAfrica in Ghana on dialups since 1999. Connectivity in Ghana is really not at all bad. (I used to live in Ethiopia where being connected was a big challenge!) Since I took an office at BusyInterenet which has a VSAT and a 56k connection speed I have been able to do much more online marketing. Dial up speeds were often too slow or there was too much local congestion for online marketing to be worthwhile timewise before.

I think the main challenges we face are with perceptions of product prices. We find that those we target fall into two categories - either they know African products (or are African) or they don't. Those who know African products want to purchase from us at the same or less than they would pay if they came and bought it themselves. They seem very unwilling to recognize or pay for the costs of running the website or connectivity and just want rock bottom prices.

Those who don't know Africa have a perception that Africa is very poor and expect to see our items cheaper than artefacts from other poor areas (like India). However, if you know Africa you know that in fact it is expensive here and that things are not cheap. Also there are many Indian and Chinese copies of African products (particularly textiles) which make our genuine products look expensive. Many people outside have little idea of quality and so again just think we are overcharging.

Another problem that we have faced is that local artisans see the dollar prices on the website and then increase their own prices in expectation of getting that amount themselves. They have little understanding of the costs of running and maintaining a web site. We have to take a lot of time and trouble explaining to them that the prices on the web site include our overheads.

Our heaviest cost is that of the payment service provider (in our case Worldpay). Being based in Africa puts us in the high risk category so we pay the heaviest premiums. We can offer a further discount to people who don't mind paying by ordinary bank transfer in the old fashioned (non-e) method.

I think ecommerce in general is going through the doldrums - maybe its disenchantment or maybe a reality call. Who knows?

Friday, August 16, 2002

Feedback: Textiles: Janis Malcomson, UK

I wanted to thank you for the prompt arrival of the mudcloth shawl. I had been looking for one for a while, and was so pleased to hear about your site. Everyone who has seen the shawl has admired it. Thanks again.

Wednesday, July 31, 2002

Feedback: Textiles: Patricia Thomas, US

 This is in response to the article in the Wall Street Journal about theft of designs in the Ghanaian textile market. There was a comment at the end, that Ms. Salter would like to put Printex Ltd. textiles for sale on the Internet, but that Mr. Millet of Printex fears the potential for theft of copyrighted patterns. My husband and I would like to comment on this:

My husband and I lived in Ghana for several years--we have always loved the textiles produced in Ghana. However, the problem of stealing patterns and making cheap rip-offs has been there since forever. In the old days, it was poor-quality Ghanaian textile firms stealing Manchester and Java designs! Only now it is Ivory Coast, Korea, India stealing from Ghana. This is a sign of the high quality of the Ghanaian product. It pains me to see cheap printed "Kente" from Korea sold in American chain fabric stores, where people will never know the real thing.    

We were in Ghana last March, and we were delighted to see so many excellent fabrics made in Ghana. Ghanaian textiles are so excellent these days, I did not need to buy any cloth from any other countries. It was also very easy to spot the poor-quality rip-offs in the market.   Over the Internet, I can see why Mr. Milad Millet does not want to expose his textiles to immediate theft. However, we wonder if it might be possible to offer only those patterns that have already been copied and thus undermined by the foreign forgers.

If Printex Ltd. has piles of cloth that no longer sell in the Ghanaian market because of the influx of cheap imitations, then they need an efficient and easy way to sell them in a totally new market. I would guess that Internet sales are mainly to customers outside of Ghana, where market-driven pattern popularity would not be an issue. The quality of the textiles would be guaranteed to the Internet customer, as it would be cloth coming directly from the manufacturer; the proven popularity of the design (by virtue of having been stolen) could even be a marketing point! To me, outside of the Ghanaian fashion scene, the fact that a pattern is 3 or 6 month out of date doesn't matter at all. After all, I am still sewing the 12-yard pieces I brought home in 1977!

To be able to get real Ghanaian textiles right now would be fantastic.   I plan to mail everyone I know about your web site. What a great resource! Best wishes.

Monday, July 15, 2002

Media: Wall Street Journal: Industry Combats Cheap Knockoffs


ACCRA, Ghana -- On the Printex Ltd. textile-factory floor is a closed door bearing a sign that reads: "Out of bounds. Anyone seen entering without permission will be severely dealt with."

Printex managers have good reason to be careful. Behind the door, a team of designers comes up with more than 500 copyrighted patterns a year for the colorful African fabrics that are the staple of Ghanaian fashion, and textile pirates are itching to see the new designs.

The sooner the new models go public, the sooner textile makers in China, Pakistan, Nigeria, India and Ivory Coast will make cheap copies of the most popular ones, smuggle them back into Ghana and snatch Printex's customers.

"We maintain strict secrecy until the point of production," says Printex executive Sujit Menon. "We keep everything under lock and key."

It is a bitter twist on the usual international dispute over intellectual-property rights, in which someone in a poor nation copies the products of a corporation in a wealthy country. Instead, Ghana's is a story of the poor stealing from the poor, with local manufacturers finding their copyrights pirated by companies in other developing countries.

Once the new Ghanaian designs are released, it is only a matter of a few months _ if not weeks _ before knockoffs appear. The four local textile producers figure piracy and smuggling cost them about two-thirds of the $150 million annual local market, a sharp blow in a country with relatively little indigenous industry and an average annual income of just $400.

Printex, which employs 400 Ghanaians, operates out of a Dickensian expanse of screening cylinders, steaming irons, huge rolls of raw cotton cloth and snaking tubes of dye. Sweat-drenched workers in flip-flops splash through puddles as they weave fabric, screen on designs, and cut it into 12-yard pieces.

Printex, which has about $20 million in annual sales, supplies printed cloth to wholesalers, who then distribute it to market women, who by tradition are the majority of textile dealers, all over this West African nation.

Ghana's textile market is fickle, with women buying the latest designs for dresses or head wraps. About a quarter of the new patterns from Printex's secret design room will sell well. Once the fabrics hit the market, the company hires student models to show them off, such as in ads on billboards and television. A winner could be produced in runs of as many as 300,000 yards. The rest will die after runs of just 3,000 yards.

Printex produces only screened textiles generically called "fancy prints." Some other companies, such as the Dutch textile maker Vlisco BV, also sell more expensive batik-like fabrics printed using a wax process. Each design is copyrighted, and, in theory, protected for 15 years. In fact, some don't last that many days before they are copied by pirate factories, industry executives say.

The fakes aren't hard to spot. They tend to be made of flimsier, less regular fabric, often synthetic such as rayon, instead of cotton. The colors don't always line up with the shapes. Some manufacturers print their name on the edge, but many sport a slightly altered logo from one of the famous brands, such as Printex, Vlisco or its local subsidiary, Ghana Textile Printing Ltd.

Ghana Textile Printing's distributor keeps a warehouse of new fabric on the edge of Makola market, Accra's commercial heart. Next door is a storefront of wholesaler S.K. Owusu, who sells the cloth to the women who run retail stalls in the market itself.

Ms. Owusu displays a certificate of merit presented by Ghana Textile Printing and the Vlisco Group for her work selling their wares. But on a rack on her wall at the moment is a bolt of gold cloth with a green star burst, with a close imitation of the Vlisco logo on the edge.

"It's not Vlisco," she concedes to Cecil Evans-Chinery, the district sales manager for Ghana Textile Printing's distributor. "It's supplied to me through Togo."

But, she explains, the vendors and their customers are demanding lower-price goods. She sells six yards of the fake for 75,000 cedis, or about $10. A GTP version would cost twice as much, and a Vlisco wax original 280,000 cedis, or nearly $40.

Mr. Evans-Chinery says he can't get too angry. He knows times are tough, and that Ms. Owusu has debts.

The pirates keep costs low in part by copying only designs that are already selling well; apparently the pirates are tipped off by the market women. So there is tension in the air as Mr. Evans-Chinery strolls through Makola's textile section; stall after stall is lined with smuggled cloth from China, Nigeria, Ivory Coast and elsewhere. The market women know him well, and suspect he either wants to raise prices or turn the women in. For their part, they say if Ghana Textile Printing turned out less expensive products, they wouldn't sell counterfeits.

"Everybody wants something cheap," Mr. Evans-Chinery sighs.

Ghanaian officials, under pressure from industry, are increasingly worried by the flood of foreign fabric. But it is the smuggling, not the copyright infringement, they find really troubling. Imported textiles are subject to a 20 percent tariff, and _ if industry estimates are correct _ that means the smuggling costs the government about $20 million in lost revenue.

The government's first instinct was to fight back at the retail level. Some months ago, officials summoned 1,500 Accra market women to the National Theater and warned them a crackdown was coming. "They know who the smugglers are," says Julia Anokye, senior industrial-promotion officer at the Ministry of Trade and Industry.

About a month later, customs police conducting a series of market raids seized smuggled goods and arrested a handful of textile dealers. A group of angry market women stomped to the Ministry of Trade and Industry and demanded an audience with the minister, which they eventually got.

"There was an uproar," a Ms. Anokye concedes.

Much of the pirated material comes through the port in Togo, next door on the Gulf of Guinea. Then, industry executives say, it is trucked north, where there is less border supervision, and smuggled into Ghana, past poorly paid, easily bribed customs officers.

Milad Millet, director of family-owned Printex, tries to stay ahead of the pirates by changing designs constantly, and by keeping his new patterns under tight wraps. Cordelia Salter, who runs an African-goods retail Web site called eShopAfrica.com here, recently approached Mr. Millet about displaying his products online. Thinking of the pirates, he turned her down flat. "All they've got to do," says Mr. Millet, "is log on, see the new designs and say, Start printing, boys!"

Copyright WSJ updated Jul 15, 2002 Write to Michael M. Phillips at michael.phillips@wsj.com

Wednesday, May 22, 2002

Media: Wall Street Journal: Ghana's Tech Frontier


ACCRA, Ghana -- Mark Davies wants to make serious money and help Africa join the 21st century at the same time. The only catch: His plan might be illegal.

Mr. Davies, a Welsh-born American and a dot-com millionaire, is the founder of BusyInternet, which provides Internet access to Ghanaians. By any standard, the company is already a tremendous African success story. Started with $1.7 million from Mr. Davies and local financiers, BusyInternet has positive cash flow after only seven months in business. But Mr. Davies has bigger ideas: Internet phone calls, which the Ghanaian government currently doesn't permit.

Many foreign investors believe that if Ghana permitted Internet calls, the desperately poor country could become a hub of call centers for companies in the West, a high-tech development path cut by India. "If they can export digital goods and services ... they can easily compete with India and other places," says Jim Moore, an expert on Internet development at Harvard Law School. "A relatively modest market share can do a lot for these countries because they are so poor."

One of the businesses piggybacking on BusyInternet's infrastructure, eShopAfrica.com sells colorful, hand-carved coffins. The government of Ghana, like those in other sub-Saharan countries, has a vested interest in protecting the revenue of the state telephone company. It hasn't ruled out Internet calls but is taking its time to study the matter. "Nobody knows whether voice transmission across the Internet is legal or not," says Mr. Davies, whose plans are on hold while the government ponders the legal issues. In the meantime, risk takers here plunge ahead and dare the government to stop them. And the unlucky among them end up in jail.

Treasury Secretary Paul O'Neill, who arrived in Ghana Monday night, wants the government to remove barriers to foreign high-tech investment. English-speaking Ghana is a prime candidate for such development. The year-old government of President John Kufuor has promised to be more business-friendly than that of his military predecessor, Flight Lt. Jerry Rawlings. For now, though, starting a high-tech company here is anything but easy, as Mr. Davies can attest.

Mr. Davies, 38 years old, came to Ghana seeking to recapture the sense of adventure that characterized the early U.S. dot-com gold rush. In New York, he was a founder of Citysearch.com (www.citysearch.com), which merged with Ticketmaster and earned him a small fortune before he left in 1998. After starting and selling another tech venture, he spent four months in 1999 traveling across West Africa, landing in Accra with an idea for an Internet cafe that would serve not only as a place for ordinary Ghanaians to dabble in Web sites and e-mail, but also as an incubator for other Internet entrepreneurs needing space, infrastructure and moral support.

If Mr. Davies longed for that frontier experience, he picked the right place. He and partner Alex Rousselet, a 45-year-old Frenchman with long experience in the African oil industry, soon discovered they couldn't take even the simplest things for granted here. Electricity in Accra cuts out at least once a week, so they needed a $30,000 backup generator, and a huge battery to keep the computers up and running for 11 minutes until the generator kicks in. Then there is the $18,000 transformer out back; at times the 240-volt power can surge to 290 volts. The computers require frequent cleaning because of the dust that blows down from the Sahara. Customers steal toilet paper, apparently to sell on the street.

Minutes after Mr. Davies wired $150,000 for the lease on the building, a former gas-bottling plant, an elderly neighbor informed him that it was actually her property and that rights to it were in litigation. After a panicked phone call, he stopped the wire transfer, but it took three weeks to confirm his lease was valid. Customs held his satellite dishes for two months.

Embracing local customs, Mr. Davies arranged for a Ga tribal chief to bless the construction site with a bottle of imported schnapps. But even a tribal blessing can only go so far. Ghana Telecom, the virtual phone monopoly, has still installed only 15 of the 30 lines he ordered. The entire country has just 249,000 phone lines, for a population of 20 million.

Despite the obstacles, BusyInternet caught on. The company employs 50 people, and some 1,500 customers pay roughly $1 an hour to use the Internet each day; additional revenue comes from a copy center, meeting rooms, a restaurant and bar, movies, lectures and rent from start-ups who piggyback on the infrastructure BusyInternet has assembled.

Along the upstairs hall, a pair of Dutch Web site designers wait for Ghanaian companies to awaken to the power of the Internet. A business called eShopAfrica.com (www.eShopAfrica.com) sells Africana online. Products include hand-carved Ga coffins that are shaped like airplanes, shoes and howitzers, all designed to reflect the earthly interests of the recently deceased.

Another business, Data Management International Inc., of Wilmington, Del., employs 37 Ghanaians to process environmental fines for the City of New York. The Ghanaians type in data from computer images of citations handed out to hot-dog vendors caught smoking while serving, homeowners who leave trash on the sidewalk or ice-cream trucks nabbed selling cones in a crosswalk. The fines often far exceed the $72 that the average DMI clerk earns each month.

Messrs. Davies and Rousselet plan to open branches in other African cities. In Accra, they figure they have run into revenue limits surmountable only if the government authorizes them to sell customers Internet phone calls.

At a technology trade fair last week, Mr. Davies met Trevor Dearman, chief operating officer of Denwa Communications Inc., a Fairfax, Va., company that sells voice-over-Internet services. The two started chatting with Alexander Sulzberger, Denwa's local rep and a BusyInternet tenant. They discussed the possibility of preparing a system that would bill customers on the spot for both Internet use and phone calls. Mr. Dearman, relatively new to Africa, figured the technology is so cheap and simple that everybody should want it. "I don't know why it's so clandestine," he said.

"Because people get locked up for it," Mr. Sulzberger shot back.

Indeed, everybody knows what happened to Nanayaa T. Owusu-Prempeh, chief executive of Tin-IFA Ghana Ltd., an Internet-service provider across the road from BusyInternet. A couple of years back, Mrs. Owusu-Prempeh was making good money by facilitating the flow of incoming international voice-over-Internet calls into the local phone system, a practice known as call termination.

With 60 Ghana Telecom lines, business representatives estimate a call terminator could clear $15,000 a month. The thought of that lost revenue was apparently too much for the Rawlings government, and in 2000 a police SWAT team swept into Mrs. Owusu-Prempeh's offices and ripped out her satellite dish, computers, fax machine, tables and everything else. Her entire staff was jailed for three days, and, she says, it took about a year to get her equipment back.

For now, she says, Tin-IFA doesn't offer call-termination services. But she is ready to start up again should the new government allow it, and she suspects that many others are doing it on the sly. Ghanaian officials say they will decide in their own good time if, when and how to permit voice calls over the Internet. "We don't want to leap and then say we've either leaped too far or leaped far short of our target," says John S. Achuliwor, deputy minister of communications and technology. He stresses the government's concern about the impact Internet calls would have on existing phone services, such as Ghana Telecom.

Mr. Achuliwor also warns that violators could see their equipment seized. Mr. Davies isn't about to risk that, but others aren't so shy. At the end of the upstairs hall at BusyInternet is the local office of Rising Data Solutions, a Gaithersburg, Md., company with big plans for Ghana. Rising Data is negotiating a contract with a doctors' answering-service company that wants a low-price overseas center to handle calls from U.S. patients.

In the next few months, says Kwame M. Bonsu, vice president for operations, Rising Data will open a 100-employee operation where, 175,000 times a month, Ghanaian operators will pick up the phone and answer: "Dr. So-and-So's office. Can I help you?"

A 20-year International Business Machines veteran who has traded in his white button-down for the colorful African print shirt of his homeland, Mr. Bonsu is betting that the government won't dare raid such a large employer. "Let me put it this way: We don't think it's going to stop us from going ahead," he says.

Copyright WSJ updated May 22, 2002 Write to Michael M. Phillips at michael.phillips@wsj.com

Saturday, March 30, 2002

Library: Entrepreneurship in Africa featuring eShopAfrica.com

Entrepreneurship in Africa: A Study of Successes

Entrepreneurship in Africa is a study of those entrepreneurs who have achieved success, wealth, and fame by organizing and directing a business undertaking in Africa. It is a story about successful entrepreneurs who have assumed risk in pursuit of profit, who have tried to conform to ethical business standards and who have tried to contribute to the economic development and improve the natural environment and the education, health, and welfare of their community and nation.

Thursday, January 31, 2002

Fashion with a Conscience, Rome, Italy

Cordelia Salter, Founder of eShopAfrica.com participated in the Moda Mania Event, 2002 organized by Marymount International School in Rome, Italy. She presented a seminar called "Fashion with a Conscience" on how to make ethical design decisions by incorporating arts and crafts from Africa. The students were shown a wide range of African textiles, beads and other artefacts and given information about the artisans that make them.

Wednesday, January 9, 2002

Finalist in the Stockholm Challenge

eShopAfrica was a finalist in the Stockholm Challenge 2002, a global competition that looks for innovation and originality in the use of ICT. The Stockholm Challenge was closed after the 2006-2008 competition.