News, Commentary & Social Media from African Perspective

Analysis of the TradeNet service

7 comments

Posted by: Ella Romanos on December 17, 2007 Under: Africa, Business & Technology, Discussion Lounge



tradenet.JPGTradeNet is a service developed in Ghana by Mark Davies, who’s concept is comparible in some ways to Ebay. TradeNet however is designed specifically for the market within Africa, targeting those who do not necessarily have access to the Internet, by using SMS to communicate instead, as SMS is generally recognised as the most appropriate way to communicate currently in Africa due to the growing number of cellphone users.

The service has been developed for the exchange of agricultural products, and allows users to submit information about products they have to sell (for free), subscribe to allow users to request what kind of products they are interested in (and receive SMS with the requested information for free), and then allows the potential buyers and sellers to communicate directly to make a sale. The issue of facilities for farmers to buy and sell efficiently is one that has been widely identified as a need (for example, this blog post from the VeSel group).

TradeNet’s Vision:

‘Our goal is to increase revenues for farmers and traders by making markets more transparent, and by shifting the balance of power slightly towards producers who suffer from the thinnest margins on what they trade. We also aim to assist projects and associations to serve their members with better and current information to sell more and buy better, and to market their products to a global audience. More recent tools enable producers to enhance their yields and find better buyers by managing their information networks more effectively.’ (source)

There are two areas of the project that are unique to TradeNet and it is these that make it a more viable long-term solution.

The first is that TradeNet not only make money from advertisements posted into the SMS that the users receive, but they also make money from selling data that it collects from the users (their personal info – telephone numbers, names, locations etc) to advertisers.

This concept of collecting and selling data is one that seems to have different interpretations from different people. The Economist’s opinion is:

‘The price of economic development may be junk mail by mobile phone.’ (source)

Whereas Trisignia’s article sees it as:

The service is…gathering valuable economic data about the marketplace it’s helping develop, and it’s leveraging its knowledge about the marketplace to sell more ads. (source)

Whilst both these articles recognise that the collection of the data helps to sell more adverts, the Economist see the data as enabling junk mail, whereas Trisignia see it a collecting valuable data. My question would be, exactly what data are they collecting? Because that question has not really been answered from the research I have done. How can that data be used in the future? Who can have access to it?

In short, there is a problem in Africa that there is a lack of data available, and it seems that potentially this service may be helping that issue (White African blog wrote a post about it a while back). But it seems that more needs to be known about what data, and how it could be used or accessed before making that judgement. (Although that is not to say that if the data is not going to be of direct benefit to Africa itself, but solely to advertisers, that it is a bad thing. It is still enabling development through enabling this service to run and therefore may be a necessary evil.)

The second area that gives TradeNet an edge over other comparative services, is that the company is making it’s software available for use by other projects. This means that the concept can be applied to other markets and uses, by other developers having the ability to create their own websites using the same back-end software.

Overall, TradeNet seems like a very positive step in development within Africa. A comment that Mark Davies made on White African’s post seems to demonstrate that this project does have real potential, as it seems that his ideology and approach to the project have a solid foundation:

‘This must be a profitable venture, a service-based venture, a customer focussed venture, and it must unleash what i imagine is loads of commerce opportunities leading to wealth generation. I’m skeptical about technology ’solving’ things, but it’s one contribution to the debate.’

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7 comment(s)

  1. Mark Davies | Dec 17, 2007 | Reply

    Just to answer the question about personal data and privacy… what we’re trying to do is to profile people in rural areas by collecting their name, phone contact, occupation and commodities they work with. We would never sell that to an advertiser, rather, we would offer advertisers the ability to reach a target market and we deliver advertising on their behalf. Users would also have the ability to ‘opt out’ of unsolicited info from tradenet. But the key thing as i see it is that these rural communities simply are ‘invisible’ to most business services. Particularly to financial services, input suppliers, health educators: if we actually track users, profile them, and even create some history about past posts/offers, then we begin to digitize some aspect of these communities, allowing them to participate with direct marketing — all the pros can cons that traditionally come with it. IMHO, any kind of marketing to this underserved community will be a good thing, encouraging them to participate in the economy. We must be diligent about abuse, as in any situation, particularly where institutional protection and enforcement is weak.

  2. Frederic N'sienie | Dec 17, 2007 | Reply

    Buyers and Sellers meet directly without the need of middlemen, this is wonderful. How do you this service benefit let’s say a restaurateur in Accra that requires all sort of ingredients that need to be sourced from various region, a campus/school cafetaria ?

    I also would like to know how do buyers and sellers arrange for delivery and payment of the merchandise ? are you also involved in the transporting and payment phase of the process ?

  3. Ella Romanos | Dec 18, 2007 | Reply

    In response to your first question, I believe (and I’m sure Mark can tell you in more detail) that because people are able to set up their own minisite (they can even have their own web address) on the TradeNet site, there can be very specific selection by buyers of the products they wish to hear about, and very specific sale types from sellers (for example they could set up as a seller of a certain type of food…). Which means it would cater very well for the sorts of people you are talking about.

    The second question about delivery and payment, I don’t know the answer to this and it is a good question, I would be interested to know that too. The only reference I have found about how payment works is: ‘A powerful SMS gateway enables easy and fast integration with any mobile operator and flexible payment options for subscribers’ (http://www.web2fordev.net/475.html).

  4. Frederic N'sienie | Dec 18, 2007 | Reply

    @ Ella Romanos , thank you for the answers, I visited the site some more and I find it to be a great tool if I was to become a trader of some sort, an importer-exporter, A buyer for a restaurant or cafetaria, or even a speculator.

    Constant & up to date Information on where and how much the commodity a business relies on to ,offer its service, trade, speculate or invest , is very important.

    Do we know how much of an impact this tool had on the markets ( consumer, trader etc..) ? I have not read too much about this in any African newspaper even the business newspaper. You will think a serious period of media coverage will be given to this , come on now:
    Food + African+ 300 million cellphone users+Agriculture ( greatest purveyor of jobs)+Cool web/mobile Application+Economic shift+Opportunity for New features( local language versions: Amharic, Zulu,Swahili,Mandinque/Bambara,woolof). This deserves mad media coverage a la google or Facebook , microsoft etc..

    The role of newspaper is to also act like adverting/ marketing agencies, so let’s not just hype up mediocre political brands, what about business services and products that actually deserve some media attention. ( that was my little rant for the week)

    @ Mark, what is next for tradenet ? does the payment feature has to be manually synchronized with the phone provider platform and is it done automatically ?

  5. Ella Romanos | Dec 20, 2007 | Reply

    I don’t know how much impact TradeNet has had, but just the fact that they are expanding, and groups/countries are interested I think says a lot. The plans to open up the software will extend it much more, and I think could really make it even more successful.

    I am quite excited to see how this project is going to progress, I hope that if it does do well it will demonstrate the potential within Africa for investment and innovation, and how the ideology behind a project can really make all the difference (rather than the technology itself being the focus).

  6. CareTaker | Dec 20, 2007 | Reply

    “The ideology behind the project…rather than the technology itself” – is important and necessary prerequisite for IT-related concepts to be relevant in Africa, and what will set concepts like the Tradenet apart from several .

  7. Mark Davies | Dec 30, 2007 | Reply

    it’s not a totally anonymous environment, where markets/sellers/buyers can meet and transact without knowing eachother… that has happened, but it’s more likely to create confusion and fear as you go further downstream to smaller producers and traders. Language is an issue for some. Trust another. Credit fuels much of this and so people can be trapped by where they have credit choices. ALl this is to say that the new technologies must tread carefully and be open to watching and learning about how to proceed. We need to understand that mediation in deals (brokerage) is still key, and that new introductions require new support mechanisms. IT may be that we’re creating some form of early agric commodity exchange where a tradenet may provide certification, brokerage, storage etc. services. And this leads me to the issue around transport etc. As we get more involved, we realize just how many networks of information and trade that exist. I think it’s natural that we’ll provide a platform to improve how these networks share information. I see transporters uploading transport availailability via their cells, and users getting alerts when trucks are coming to their areas. So tradenet (or whoever gets this right) will back off from more traditional ‘market prices and offers’ and provide a more holistic approach to giving actors and roles a more powerful and immediate way to communicat with eachother, in any dimension that relates to commerce. Finance and credit applies here. In the end, whoever has a simple and useful and practical delivery channel, and delivery agents, will become a valuable asset for all kinds of business services aimed at these communities. THat’s our vision.

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