South African startup TradeBRICS is an e-commerce marketplace where global B2B buyers can source products directly from African suppliers and manufacturers.
TradeBRICS traces its roots back to 2017, when Akshay Maharaj sent his brothers Akshar and Shaarad an article about the African Continental Free Trade Agreement (AfCFTA), which was going to create the world’s largest trading bloc, valued at US$2 trillion, whilst creating opportunities for small scale suppliers and manufacturers in Africa.
The brothers senses an opportunity, and some research revealed that 19.7 per cent of all manufacturing output in South Africa was not used because of a lack of demand.
“The lack of demand was due to medium and large corporates importing cheaper goods from Asian countries like China, Vietnam, and Bangladesh,” Shaarad Muharaj told Disrupt Africa.
“There were very similar statistics like this across major African countries who rely on imported goods. We knew that this was the opportunity to create an inclusive, international supply chain for all African businesses to benefit from.”
TradeBRICS began life at a Starbucks in Sandton in November 2018, officially registering as a company in 2019. Now a 20-strong team, the platform enables African suppliers and manufacturers to find global customers, manage and ship orders, apply for purchase order finance, and accept online and offline payments.
“We allow buyers to source locally produced African goods securely with trade assurance, place orders, negotiate pricing, buy on cash or credit with two, four, six, and 12 month credit terms, manage supplier relationships, and arrange deliveries like never before,” Shaarad said.
The brothers believe there is a huge gap in the market for African suppliers and manufacturers to start trading online.
“With the launch of the African Continental Free Trade Agreement, there’s going to be one united economy in Africa valued at US$3.4 trillion that’s going to increase Africa’s exports by US$560 Billion, mostly in manufacturing,” Shaarad said.
Investors agree that there is an opportunity here. TradeBRICS has already raised a US$500,000 pre-seed round, and is looking to raise seed funding later this year. It was accepted into Knife Capital’s Grindstone accelerator last year. Uptake, meanwhile, has been significant.
“There are currently thousands of global buyers, that operate in 130 countries, who award US$150 million annually to our 55,000+ African suppliers listed on TradeBRICS. Our suppliers are spread out across 15 different African countries,” said Shaarad.
“Our largest market is currently South Africa, but we’re working closely with 20 African embassies to expand our offerings into other key markets; mainly in Egypt, Ghana, Ethiopia, Kenya, DRC, Libya, Nigeria, and Algeria.”
TradeBRICS is a two-sided marketplace, so it has revenues coming in from both sides.
“Our freemium business model is a combination of the Airbnb and Alibaba business models,” Shaarad said.
“Although it’s free for most suppliers to set up an e-commerce store, we charge a small transaction fee on orders and have other premium features that suppliers can purchase through a simple subscription fee. It’s free for buyers, but we also have a subscription model for advanced sourcing tools and to access more permission-given supplier data.”
He said current revenue is around US$250,000, but added that the startup still faces a challenge in building its supply chain.
“The majority of African suppliers and manufacturers are still very traditional and haven’t explored the online B2B e-commerce market as yet, which means that we’ll have to work on bringing them up to speed with the latest tech,” said Shaarad.