African Startups in China Move Ahead Despite COVID-19 Epidemic

Experts have pointed out that economically speaking, entrepreneurs and small businesses will be among the hardest hit by the COVID-19 pandemic. Extraordinary entrepreneurship is needed to cope with these extraordinary times. In this context, the Jack Ma Foundation announced on April 6 its official launch of the second edition of the “Africa’s Business Heroes” prize competition, an initiative to identify, support and inspire the next generation of African entrepreneurs who are making a difference in the lives of their local communities.

In China, a lot of African startups have been at the forefront of the fight against the novel coronavirus epidemic. How they dealt with this crisis and especially how they managed to improve their situation could provide inspiration to many others.

Coping with hardship 

The epidemic couldn’t have come at a worse time for Amahah Justice, PhD, co-founder of two African startups in China. One is an EdTech company called iQ Loft, which offers 3D gamified learning courses for young learners. Justice and his team worked tirelessly through 2018 and 2019, preparing to secure a new round of funding in early 2020 to expand their business. However, the outbreak of the epidemic shuttered their plans, as everyone had to go into lockdown, including the investors they were in negotiations with. Because of the restrictions on meetings, the business operation of the iQ Loft was badly hit as it was mostly offline-based.

This epidemic has also been a tough period for Miatta Momoh, co-founder and business development manager of Kente & Silk, a social enterprise which endeavors to deliver Africa-centric events aimed at deepening Africa-China relations at a people-to-people level.

Challenges to meeting partners and hosting physical events compelled them to put on hold many opportunities, including their Africa-China community brunch, which was a new initiative they used to engage Africa-China enthusiasts and novices over delicious food. For the same reason, they had to postpone their second Rwanda Deep-Dive trip, a program which seeks to provide young Chinese professionals and college students with a chance to understand Rwanda’s rapid development.

Justice and Momoh are just two of the thousands of African entrepreneurs running startups in China. Due to the inevitable financial strain caused by the crisis, many of them have suffered various setbacks and disruptions to their businesses. Some even have come to a grinding halt.

“Generally, everyone is in a bad shape due to the epidemic. Not just African entrepreneurs, many European startups got shuttered as well. The hardest hit businesses were foreign-owned bars and restaurants,” said Justice.

Opportunity amid crisis

But as Justice and Momoh noticed, the Chinese word for crisis, weiji, has two characters, one carries the meaning of danger and the other opportunity. Both entrepreneurs have focused more on the second character in the word combination.

For Justice, the pandemic has enhanced their original value proposition of offering an online-to-offline (O2O) solution. They have implemented the O2O model in delivering their services to their clientele mostly in an online mode, while adding an offline experience facet to the overall delivery. At the same time, they explored ways to use the model to develop proprietary technology for remote working and management.

“The global pandemic got us thinking in a rather revolutionary manner,” Justice told ChinAfrica. “I must say we have a more robust business model now due to the crisis.”

As for Momoh, thanks to her years of experience managing editorial webcasts for companies like Microsoft, she helped her team to rethink offline platforms into a new engaging online format without much hesitation.

In an interview with ChinAfrica at the beginning of April, Momoh pointed out that she was co-developing a webinar with Black Livity China, targeting the African diaspora in China. The objective is to present China’s thriving African diaspora, including many African students who have been confined to their campus, a platform to communicate.

Such new online webinar opportunities allow them to reach out to other accomplished experts active in areas related to the Africa-China relations, who are based outside of China, like creators of the film Joseph, Marcia Weekes and Dave Weekes, who are in Barbados.

“Ordinarily, bringing them together would have incurred much more costs like travel and accommodation, but now we are connected through the power of technology like Zoom,” said Momoh.

They have also been able to form new media partnerships with the African Business Chamber of Commerce by supporting their “COVID-19 Online Summit” that is connecting healthcare leaders and public and private stakeholders across the continent, starting with Nigeria.

“There is a deep sense of startups fighting this crisis in unity, doing what we can to support each other, especially if our business objectives align,” she added.

Community support

To Momoh’s relief, she was not alone in this fight. Her enterprise is one of the five African startups in Haidian Pioneer Park (HPP), a public business incubator located in Beijing. She has been encouraged by HPP’s presence and response during the crisis. According to Denis Hulagu Zhong, International Cooperation and Industry Investment Promotion Team Manager at HPP, the park offered one-month rental exemption for 217 enterprises incubated in HPP in February, worth more than 4 million yuan ($567,803) in total. Since February, all Internet fees and costs are covered by the park. By the beginning of April, the startup accelerator had donated more than 30,000 masks to enterprises that resumed work.

Among its relief efforts, one specifically targets foreign entrepreneurs: online training series. Launched on March 19, the courses cover legal issues, fiscal policies, taxation, human resources, financing, as well as community operations for overseas entrepreneurs amid the COVID-19 epidemic. As a community partner of HPP’s online courses, Kente & Silk helped promote the initiative among its circles. The first eight courses have attracted some 2,000 viewers. Playback is also available for viewers who are unable to join the live sessions due to time difference.

Confident outlook

Momoh is currently preparing for Kente & Silk’s Third Beijing Africa Week that includes China’s only African startup pitch competition. Dates have been postponed and there is still a possibility that the event will have to be held online, but they still see a need for these initiatives more than ever.

“This is because they promote building relationships and social innovation in the backdrop of the COVID-19 pandemic where collective action will really be part of the solution to our societal needs,” she explained.

In Wenzhou, east China’s Zhejiang Province, George Solomon Njau adapted and even changed his business model after the outbreak of the epidemic. His Hamster International app, the winner of last year’s Kente & Silk African startup pitch competition, features food ordering and sharing of useful information in English. In the wake of the epidemic, their orders decreased. However, they were able to secure partnerships with some institutions to serve their members.

“This [crisis] actually made us even more confident and stronger than before,” Njau told ChinAfrica. “China presented a good opportunity for us to start a business and the epidemic experience proved that we made the right decision to start our business here.”