Sipping Success Rwandan coffee sales take off on Chinese e-commerce platform
Afusion of sweet, buttery and caramel notes with surprising citrusy and fruity overtones is how Li Jian, a Chinese coffee lover describes Rwandan coffee. “The reason why I love Rwandan coffee so much is its syrupy, heavy flavor,” Li told Chinafrica. “Differing from the typical flavor profiles of American coffee or Italian coffee, Rwandan coffee offers complex and unusual tastes that are unique to their regional origins.”
Like Li, now, an increasing number of Chinese coffee lovers are embracing Rwandan coffee. Previously, few knew that this small east African country produces such high-quality, high-altitude coffee beans. The turnaround in exposure happened after Rwanda’s coffee was shipped directly to Chinese consumers via the Chinese e-commerce giant Alibaba Group.
In October 2018, Alibaba and the Rwandan Government signed three Memoranda of Understandings (Mous) in Kigali, the capital city, which demonstrated the establishment of an electronic world trade platform (EWTP) hub in Rwanda, the first ever in Africa.
The agreements were intended to strengthen the cooperation in support of Rwanda’s economic development by promoting policy innovation, enabling cross-border trade of Rwandan products to Chinese consumers, facilitating tourism to Rwanda, and providing support for Rwanda’s digital economy.
One year later, the roll out was a success and coffee exporters started selling their produce on Alibaba’s Tmall Global, a branch dedicated to bringing overseas goods to Chinese customers via e-commerce. The coffee has since enjoyed good sales on the platform.
Rwanda has no shortage of raw coffee beans, but its processing industry is less developed. Coffee farmers often complain of low farm-gate prices, saying they earn little compared to the efforts and resources invested in the crop. As a result, some farmers have abandoned coffee in favor of other cash and food crops.
To upgrade the industry, ongoing initiatives that promote agro-processing and marketing are now creating fresh excitement among coffee farmers anticipating premium prices for their beans. One such initiative is the EWTP launched by Alibaba, which provides small and medium-sized enterprises in Rwanda with operational infrastructure, such as commerce logistics, cloud computing, mobile payments and skill training.
In March 2019, five months after the launch of the EWTP, the National Agricultural Export Development Board of Rwanda opened a Rwanda pavilion on Tmall.com, where Chinese and overseas buyers can easily locate Rwandan products from distant shores.
Better packaging and branding are factors that have boosted sales of Rwandan coffee. In the past, Rwanda only sold green coffee beans in containers to China. Tmall Global encouraged and worked with local entrepreneurs in the coffee sector to change the packaging and conducted a number of promotion campaigns to alter the stereotype held by many people about Rwandan coffee.
In October 2018, Tmall Global launched a campaign called Tear Off the Label for Africa, designed to strip away the traditional view on African products, on China’s social media platform Weibo to help Chinese get a real understanding of Africa. Close to 80 million people read the articles that were shared on the platform about Rwanda and its coffee and more than 700,000 people joined the conversation on the platform.
The result was that in just four days, 1,066 packs of Rwandan coffee were sold. About 762 packs were sold in just one day and one of the coffee brands sold out on the first day.
“The partnership with Alibaba has enabled Rwandan small businesses to leverage its ecosystem and get connected to the over 700 million Chinese consumers on the platform while bypassing costly intermediaries,” said Wang Jiaxin, Economic and Commercial Counselor of the Chinese Embassy to Rwanda.
For Rwandan entrepreneurs in the coffee sector, the platform is a bridge to reach the outside world. “China is the most populous country in the world, so gaining China’s market is a huge opportunity for us,” said Benjamin Nkurunziza, Sales and Marketing Manager of Rwanda Farmers Coffee Co.
Former Rwandan Ambassador to China Charles Kayonga said in an interview at the First China-africa Economic and Trade Expo held in June 2019 that the cooperation with Alibaba not only gives a hand to teach locals to sell coffee products in its e-commerce platform, but more importantly, teaches local people the right way to find the right market.
Bigger profit margin
By sourcing, processing, packing and direct marketing high-end specialty coffee from Rwanda to Chinese markets, e-commerce platforms significantly raised the profile and value of Rwandan coffee.
“Today, Chinese consumers can buy Rwandan coffee at Tmall International and Hema Fresh Market, a food chain invested in by Alibaba. Now Rwanda’s SMES can earn $4 more per bag sold through Alibaba,” said Diane Sayinzoga, head of Rwanda Development Board, at a parallel event during the Second China International Import Expo on November 5, 2019, in Shanghai.
Clare Akamanzi, Chief Executive Officer of the Rwanda Development Board, said the EWTP is in line with the country’s development priorities. “It provides a good opportunity for entrepreneurs to maximize their income. By selling directly to consumers, they avoid costly intermediaries.”
Jack Ma, founder of Alibaba Group, said, “I’m informed that farmers earn $8 from one kg of coffee beans sold to the U.S. The U.S. on the other hand, can sell the finished coffee products at $16. However, through the EWTP platform, a farmer can sell his coffee products at $12 per kg.”
Cultivating talents
Apart from helping to increase the presence of Rwandan coffee in China, Alibaba also conducted its training program to provide capacity building to academics, policy makers and entrepreneurs on how to grow a digital economy. In August 2018, the Alibaba Business School launched the Global E-commerce Talent program, a fiveday course to boost the competencies of Rwanda University lecturers and deepen their understanding of the e-commerce industry, so that they can train digital talent and future entrepreneurs to compete in the global economy. According to Alibaba, more than 50 Rwandan locals have received training.
Diane Sayinzoga, head of the Rwanda Special Economic Zone and Export Department, believes that the training program is a key component of the EWTP in Rwanda. “We believe that these university lecturers will play a key role in helping Rwanda develop e-commerce after training.”
In addition, in January 2019, Alibaba hosted a three-day workshop for 12 Rwandan policy makers from nine government departments at the group’s Hangzhou headquarters to showcase the nature, capabilities and promise of a new digital economy through first-hand experience with digital finance, logistics, e-commerce and big data industries.
According to Kayonga, the most far-reaching significance of the EWTP to Rwanda is to bring e-commerce thinking and skills to empower locals. “E-commerce is different from industrialization. It enables developing countries to leapfrog in the short term,” he said. “China has set us a good example.”
“I strongly believe that the best help doesn’t come through donations or charity but through empowerment. Alibaba’s EWTP program has empowered an entire industry, creating tangible win-win results for everyone, including farmers in the coffee washing stations, and changing the lives of the people from the three coffee suppliers that participated in this campaign [in Rwanda],” said Diabate Dean Harry, a graduate of Alibaba’s global talent nurturing program - the Alibaba Global Leadership Academy. CA