Airbnb is touted as having the most competitive marketing strategies of all time, renowned for its Craigslist viral growth hack and compelling pitch deck format. Lankester exposes how the platform enabled users to cross-list on Craigslist, a competitor, with one click, and emailed all those who listed on Craigslist, to take a grab at the cross-list offer. Through their innovative marketing tactics, Airbnb was able to effectively disrupt the Hotel and Hospitality industry globally. For Africa, however, the story has been a bit different. Airbnb’s growth and adoption have been relatively slow and narrow. The company’s growth across Africa was limited to a small base of Nigeria, Ghana, and Mozambique, with over 3.5 million guests arriving at its 130+ listings in Africa.
Difficult regulations, user skepticism, and market unsuitability have all been identified as reasons why Airbnb is not recording as much success across the various African geographical markets as in other continents. However, their traction so far, in its base countries, shows the opportunity in technological disruption of the Hotel and Hospitality industry in Africa.
Bongalo: A home-grown alternative for travel bookings and hotel reservations
Nghombombong Minuifuong, a polyglot and versatile product manager, who reckons his skill at negotiation and determination to accomplish things, is filling this market gap. Where Airbnb is unable to effectively iterate to match local perception, Nghombombong is doing so, in an even more creative way, with Bongalo. Having tried his hand at a number of businesses before Bongalo, he identifies one interesting fact about himself as having gone to college seven years after high school, and after kick-starting his first business. Bongalo was created in Cameroon, in 2017, though, as a tech-driven real estate platform. In 2019, the startup pivoted to a booking platform, and set up in Rwanda, generating significant traction with over $3,000 in revenue, in the very first month of operations. Its new direction at travel and booking for hotels and accommodation is what qualifies the impact that the startup is making in Rwanda and Cameroon.
Bongalo aims at cultivating Africa’s growing travel experience by offering people the opportunity to find affordable accommodations, with more space, convenience, and amenities. Through the platform, users can easily find perfect homes on their travels, without any hassles, and connect culturally. As Nghombombong points out,
We started Bongalo because we saw a market gap – we are offering users an alternative way to host their properties and receive payouts conveniently.
The convenient way through which they achieve this is by leveraging on the dynamic payments technology of Telecom companies across Africa, such as MTN mobile money, MPesa for Safaricom, and Airtel money. Since these solutions are already enjoying a good deal of acclaim and adoption, it is easy to utilize these in transactions on the platform. Once a user on the platform scores a reservation, he/she gets paid instantly on his/her mobile wallet, saving the extra costs on transaction fees through third-party apps. For the guests who are keen on making reservations, the platform helps users to view the most affordable rates for accommodation, and make payments via USSD codes, with little or no stress in the booking process.
As proof of the convenience that the platform ensures, Nghombombong notes that over 86% of transactions and payments on the platform are done via mobile money wallets. Mobile money in Africa is enjoying a lot of growing patronage, especially as it offers users ease in transacting business, with reduced costs. The successes of MPesa in Kenya, where the mobile money revolution is being led, significantly show how much Africa is transiting to this new normal.
From obstacles to building blocks: Navigating challenges
Nghombombong notes that the greatest challenge for Bongalo has been market adoption. For a start, Africans are generally skeptical about online services, and still find it, sometimes, preferable to visit physical agencies to book their flight tickets. As such, Bongalo has had to set up agents that take care of reservations for these users, while still making use of the Bongalo platform.
Also, he points out an inferiority complex often makes African users withdraw from patronizing the platform since it is not from the West. As proof of this, a majority of users on the platform have been diasporans and foreigners, who prefer to utilize locally-developed solutions, to interface better with the culture of the area.
Bongalo also faces significant challenges in raising funds. Since its launch, Bongalo has raised grant support from the Tony Elumelu Foundation, and FFF (Family, Friends, and Fools) investment, which it has utilized in bootstrapping and growing its market depth. While the startup ecosystem in Rwanda has been relatively favorable for growth, especially with the Startup Bill being implemented, the startup was hit hard by the effects of the pandemic. The startup hit rock bottom in revenue numbers and had to iterate rapidly. As Nghombombong points out, the COVID-19 experience offered newer opportunities for growth for the startup,
We struggled to raise funding since we had low traction due to COVID. However, the COVID challenge turned out to reveal a big market opportunity for us, because we realized the market in local travel.
People who were traveling within the continent, from Nairobi to Lagos for example, could also be offered Bongalo’s services. These new iterations helped to reignite traction for the startup across the continent. Rwanda has nonetheless, been much of a favorable climate for the startup’s growth and activities, though Nghombombong advises that any startup looking to scale should have a broader market in view. As he points out, the Rwandan market is comparatively small and could be best utilized as a Go-to-market platform for testing one’s concept before expansion and scaling. The Startup Bill in Rwanda also, which would be passed into law by next year, hopes to help in building and growing startups easily from the ground-up as the bill intends to protect startups from harsh policies, and offers early-stage companies enough time to build and grow before facing taxation. Advising young entrepreneurs looking to set up shop in Rwanda, he says,
Rwanda is a country that is always taking the lead and initiating things. My experience in Rwanda has been amazing. People are majorly focused on work, and there is not so much noise out there. The policies are good, and the environment is conducive. I have had the opportunity to participate in some of the sessions of the Startup Bill creation. These policies will even make the ecosystem more conducive.
Growing a continental brand
Currently, Bongalo is actively present across two African countries, Rwanda and Cameroon, with over 2,000 users and about 200 properties listed. However, the startup is interested in deepening its foothold in Rwanda and Cameroon, before branching out to markets like Nigeria, Ghana, Kenya, Tanzania, and South Africa. In order to conquer the African market, Bongalo realizes the need to continuously serve its customers’ needs and preferences, and this is why the customer is front-and-center in its considerations.