Embedding Fintech And E-Commerce FrancophoneThrough Africa

In our November 2022 issue, we highlighted the 45 Most Influential Women In Digital Transformation, Africa. Among the iron women that have contributed greatly to the growth of technology in the continent, was Sophia Alj, Co-Founder and COO of Chari (pronounced shee-rii).

Born and raised in Morocco, Alj has always been drawn to entrepreneurship. Her dream has always been to create solutions that would benefit the community and improve the lives of its members. She got a shot at achieving this dream when she cofounded Chari with her husband, Ismael Belkhayat. The start-up was set up to help corner shops (your everyday kiosk just a stone’s throw away from your doorstep) in North Africa have a go at getting on the digital transformation bandwagon. Sophia believes the Mom and Pop Shops also need to benefit from technology and have a seamless working experience.

Who is Sophia Alj?

I was born and raised in Morocco, grew up in Casablanca but travelled to study at the McGill University in Montreal Canada. I studied Civil Engineering then did my master’s in Management at ESCP Europe, Paris. I tried to learn all the skills I needed to become an entrepreneur as I knew very early on I wanted to become one.

Could you tell me more about Chari?

It is a start-up I co-founded with my husband in January 2020 with our client base built over that year. Our client base is basically Mom and Pops. We provide them with a B2B e-commerce app allowing them to order goods which are delivered the next day while they also benefit from various financial services like payment facilities and micro credits. We have operations in Morocco, Tunisia, and Côte d’Ivoire and we aim to be a leader in the B2B e-commerce embedded with fintech space in Francophone Africa.

How was the experience of founding a start-up with your husband? Did having him as a partner make it easier for you?

It is very hard to be a solo founder because there’s so much you need to do. I admire solo founders who have built their businesses from ground up alone. It is a very difficult fete to achieve. Ismael was already a tech entrepreneur with two successful projects. He had also built a web incubator that hosted several start-ups still growing. He has a lot of experience in the tech industry in Morocco, so of course, it made it simpler for me.

How does your partnership work?

We have clearly separated our tasks; he’s the CEO, and I’m the COO. Ismael is more in charge of things related to development, strategy, and fundraising, while I am in charge of the operations and the tech part of the business. We also have two separate offices where I’m close to operations which is where our warehouses are located - while he is at the city centre. We make it work by having clear responsibilities.

What is it that attracted you to technology?

You can make your operations more efficient by adding the right technology to it. I am fascinated by process optimisation through disruptive technologies. When I was working at McKinsey & Company as a strategy consultant (before co-founding Chari), I worked on a digital transformation power and I really wanted to apply that in my start-up. With Chari, we have tried to digitise the whole value chain of the consumer goods industry by optimising the consumer experience from placing an order, following its preparation, all the way to the delivery of the order.

What is the big hairy problem you are looking to solve with Chari?

We want to help Mom & Pops fight competition coming from the modern trade. In emerging markets in Africa, these shops are part of our daily lives. We visit them every day to buy goods for our households. They know our families and are part of our communities. We decided to position Chari as a central purchasing body and a one-stop-shop for all these retailers. We want to push it further by allowing them to have access to financial services and while at it, work on their financial inclusion.

In your opinion, what do you think is the scope of growth of e-commerce in

North Africa?

In Africa today, around 80 per cent of the population have smartphones. People have the tools to be online to consume goods through e-commerce. The generation that was born during the smartphone era know how to navigate it more than the older generation. There is the rise of e-commerce in North Africa through different platforms improving convenience for the final consumer. The education has started, people are using these services, they know it’s convenient and of course, there is a very high potential for growth in these regions.

There have been reports that B2C e-commerce platforms are not turning a profit. Why do you think this is so?

I think that one of the reasons they are not profitable is high logistic costs that cannot be covered by delivery fees. If you also think about other costs like back-office costs, it makes it that much more difficult for them to turn a profit. However, for Chari, we are a B2B e-commerce platform and not a marketplace. We buy goods from our suppliers, and thus benefit from a higher margin. The battle here is to improve your cost structure to make sure you deliver goods to your clients at a fair market price.

Doesn’t that require a lot of data, to know when your clients will need the goods?

It does, but now that’s where there’s the difference between B2B and B2C e-commerce. With B2B e-commerce, the average basket is much higher than the one for B2C clients so reaching profitability is sometimes easier. It is also easier to analyse data from B2B e-commerce clients.

Then, what do you think would work for B2C e-commerce?

Well, to improve profitability there are several things they would need to work on.

• Improving your gross merchandise value (GMV) through improvements in volumes and margins.

• Cutting costs to ensure you have a cost structure that is reasonable.

• And, B2C e-commerce platforms invest a lot in marketing and maybe re-targeting can help with their campaigns.

I, however, generally think the goal is getting higher baskets and getting customers to buy larger volumes. More like what’s happening with B2B e-commerce.

Everything got bumped up for you after Y Combinator backed you up, as you acquired Axa Assurance’s credit arm and Diago (an Ivorian B2B e-commerce). What difference did being backed by YC bring to Chari?

Getting to Y-Combinator was a success because it was a way to prove what we were building really made sense. We were working for a billion-dollar company and by having people from Silicon Valley believing in us comforted us because we knew we had put our finger on the pulse of something great. We were working very hard for that, and we were super happy to have Y-Combinator recognising it. We went through acceleration programmes and raised a round of funds through YC and investors we met during that period of time. That achievement showed that we had proof of concept, traction, and validation from international standards. After that we started to scale geographically as we expanded to other countries by acquiring companies. We then made a move into the fintech space. 2021 was intense for Chari and we can only prospect for better things for the future.

Before people get successful at anything, they mostly go through failure which give them lessons. Could you give an example of a project you tried and got lessons from?

In fact, the great entrepreneurs I have met in my life are people who have not been successful all along. In my case, I would give the example of a project I started in Morocco immediately after coming back from studying in America. I am passionate about travelling and after being abroad for some time, I realised that we had a beautiful country and I wanted to do something in tourism. So, I launched a start-up in tourism where I basically wanted people to experience short excursions. The idea was good, but I think the timing was not that good. I don’t see it as a failure but rather something unfinished that I would like to explore later.

What about an example of a project you have worked on that was successful?

With Chari, we are at the very beginning of the story, but I feel like we have been growing fast during the past three years and in my opinion, it’s already a great battle that we have won. We still have a lot of work to achieve but we believe in the future.

What drives you every day? What is your motivation?

The dream of building something that will have a true impact on the region, a social and economic impact. I want to leave a footprint that will be helpful for society by impacting start-ups in French-speaking African countries.

What is your message to young girls who look up to you?

Believe in yourself. We are all superwomen. Each one in their own special way and we need to believe in that, empower ourselves, and believe that we can build something great. We all have dreams, and we should not hesitate to try to make them come true. I know it’s not easy; you need to put effort and hard work into it. I know it’s not easy.

What do you do outside work?

I am a mother of two, so I spend a lot of time with my kids; Malik and Leila. I also see Chari as my third child but that’s a story for another day. My hobbies are mostly outdoor activities. I like swimming, cycling, and running. I am also a sky diver.