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Agent Networks are a crucial element for Africa’s emerging economies, especially for the Financial Inclusion of millions of people.

Expansion to rural areas with the opening of branches remains too high a cost for service companies, such as Banks and other Financial Institutions. Thus, the Agent Channel appears as the best alternative, due to the lower costs and also due to the great agility in geographic coverage. Only in this way, millions of people in rural communities can access financial services (Agency Banking) and Mobile Money.

Leveraging the Agent Networks’ Last-mile Potential

Given the success of the agent distribution model in the Banking and Telecommunications Industries in Africa, we can raise the following question:

Why not harness Agent Networks for other services?

Interestingly, what happened in China serves to answer this question. Chinese eCommerce companies, as soon as they consolidated their activity in urban centers, started a strong expansion into rural areas. However, they faced a problem: an economy based on cash. In rural communities, the use of cash is the basis of daily transactions, which makes digital payments difficult for eCommerce. Thus, with the regulatory support and creation of licenses for Financial Services Providers (FSP), the Rural Agent Networks have been adapting themselves with the Cash-in & Cash-out service (CICO Agent Networks).

It was precisely following this idea that the Last-mile Banking Toolkit concept was born. The platform allows any kind of Agent Network to expand their service offering through the Marketplace available in the app.

Returning to the question, it is concluded that – although in the opposite direction – the eCommerce Agent Networks in China have become Digital Financial Services distribution Networks too.

So, considering the term Agency Banking in the financial sector, the term Agency eCommerce naturally comes as a reference to the use of Agents in the last mile delivery of eCommerce.

What is Agency eCommerce?

Agency eCommerce is a distribution model for electronic commerce adapted to last-mile delivery challenges through external partner entities. These entities are individual agents or Agent Networks with adequate resources for field operations. Its activity includes sales and delivery of products, and marketing support. This alternative channel of agents makes eCommerce operations possible in African rural areas, villages, and isolated communities, thanks to the low maintenance costs and the superior territory outreach.

The African eCommerce

In Africa, eCommerce faces last mile problems common to other service companies, such as Banks or Telcos. The context in most sub-Saharan Africa is a weak infrastructure and poor internet coverage. Plus, there is a strong informal retail culture.

Agent Networks help to overcome most of the challenges, including the barrier of the digital payment system.

Almost all transactions are made with cash because of the informal retail’s weight in emerging economies. However, Mobile Money networks have a huge impact in many African countries, and thanks to their CICO service they facilitate digital payments and act as eCommerce enablers.

Commerce is notably characterized by the high number of neighborhood shops and drugstores. These small businesses usually also work as Banking Agents and Mobile Money Agents, known as merchants in the Agency Model. This type of agent is central to the success of e-Commerce.

Merchants represent key points of contact with online sales platforms and form a vast network for the purchasepayment, and collection of products.

All Sub-Saharan African countries lack a consistent and well-organized system of addresses, particularly in rural areas. So, e-Commerce companies struggle with the last mile delivery process. The solution is to use the merchants’ stores as pick-up points.

However, there is another thing that makes the agent a key factor for e-Commerce: the trust relationship between the agent and his community. The agents, especially the owners of convenience stores, build informal and trusting ties with the local people and usually provide “over the counter assistance” when necessary. They end up helping people with online shopping by placing orders, educating consumers, and, more important, overcoming the mistrust towards e-Commerce. We will address this issue next, with the Bizipay Agent Network case, one of Papersoft’s clients.

The Success Case of BiziPay

BiziPay is an Agent Network operating in Kano province, in northern Nigeria. BiziPay started by using our last-mile banking toolkit to distribute and sell Agency Banking services. However, when we launched the integration with Flutterwave, BiziPay quickly ventured into eCommerce.

The recent update of the platform allows the integration with Flutterwave’s Mobile POS system and the online stores service.

Thus, in an entrepreneurial move, BiziPay took advantage of the experience of its Agency Banking Network and used its agents as sellers and couriers in eCommerce.

At the same time, BiziPay created partnerships with local suppliers and currently sells hundreds of food products and other items online.

eCommerce is proving to be an excellent bet for BiziPay. However, the “trust” factor that we mentioned earlier, was delaying the growth of the eCommerce business. BiziPay realized that there is a cultural aspect capable of influencing business performance: the gender of eCommerce agents.

Women Power: Why BiziPay Promotes Women Recruitment

In Africa, it is common for women to be in charge of home duties. They are the ones who stay at home to take care of the children, manage household purchases and prepare meals, while the men go out to work.

When BiziPay Network started eCommerce with a door-to-door model to sell products online, noticed the constraint in the interaction between agents and women consumers. These housewives felt uncomfortable opening the door to male agents.

Therefore, BiziPay has strategically started to adapt its teams of agents.

During last March, the CEO Aminu Bizi organized the event “Empowering Women on eCommerce as a Future Business” which gathered around 500 women. The goal was to appeal to female entrepreneurship and to recruit female agents for their network, and by that, to increase consumer confidence in the door-to-door sales model.

The similarity of this strategic decision by BiziPay with the model applied by Tupperware in the 1950s in the United States is obvious. Just like what happened in the suburbs of the United States, BiziPay women agents also take on an entrepreneurial role in becoming salespeople and recruiters for other agents.

In conclusion, we can say that the use of Agent Networks for eCommerce is not only possible but indispensable, given the characteristics of the African context.

Agent Networks are essential for:

  • Lower expansion costs outside urban centers
  • Guarantee a digital payment system (Mobile Money Agents or Banking Agents)
  • Creation of a network of low-cost last mile delivery points (e.g. neighborhood stores for product storage)
  • Community literacy
  • Promote consumer confidence
  • Create local jobs

The Last-mile Banking toolkit software is the best platform for Agent Networks willing to expand their activity with eCommerce. That is, in addition to Agency Banking or Mobile Money services, it allows you to add other external services through integrations with partners and mini-apps. This way, your Agent Network is not limited to just one type of service.

Want to know more?

Just like BiziPay did, you can increase your service offering to quickly scale your business.