Industrie Africa Shifts Focus After Five Years

Industrie Africa, a prominent online multi-brand fashion retailer focused on African designers, is ceasing its e-commerce operations as of April 30, 2024. The company, founded by Tanzanian entrepreneur Nisha Kanabar in 2018, will rebrand as Industrie Africa Plus, an advisory firm.

New Direction: Industrie Africa Plus

Industrie Africa Plus will collaborate with luxury hotels, cultural institutions, and retail hubs to create physical showcases for African fashion. This includes concept stores, retail activations, and pop-up shops. The firm launched its first project, a concept boutique, on Bawe Island in Zanzibar, Tanzania, in partnership with a local luxury hotel.

Challenges Facing the E-Commerce Model

Several factors contributed to the decision to close the online store. According to Kanabar, these included cross-border logistical difficulties, inconsistent tariff policies, and overall market volatility. US tariffs, implemented last year, proved particularly detrimental.

Impact of US Tariffs

Tariffs ranging from 15% to 50% significantly impacted African countries like South Africa, Algeria, and Madagascar. Industrie Africa relied heavily on the US market, which accounted for approximately 80% of its sales. Kanabar stated, “It heavily impacted our business,” explaining that the end of the de minimis loophole led to US consumers facing duties on purchases they hadn’t previously paid.

African Growth and Opportunity Act (AGOA) Hurdles

The African Growth and Opportunity Act (AGOA), intended to provide duty-free access to US consumers, also presented challenges. These included varying compliance capacities, complex origin rules, and uncertainty due to periodic renewals, complicating pricing and fulfillment strategies.

A Platform for African Designers

Since 2018, Industrie Africa had become a key platform for global consumers seeking high-end African fashion. The retailer featured brands like Nigeria’s Lisa Folawiyo, Ghana’s Christie Brown, and Senegal’s Tongoro, shipping to nearly 60 countries. The goal was to rival established platforms like Net-a-Porter and Farfetch while supporting African designers’ global reach.

Demand and the E-Commerce Landscape

Kanabar observed a surge in demand for African fashion, noting that returning customers spent 21% more than first-time buyers. However, she acknowledged that the operational and logistical challenges faced by Industrie Africa were greater than those of other multi-brand retailers. Recent closures of other e-tailers, such as Matches and Ssense, highlight broader issues within the industry.

The Future of African Fashion Retail

Kanabar believes that the nature of African fashion – small-batch, made-to-order, and craft-led – doesn’t easily align with the demands of global e-commerce for instant replenishment and predictable logistics. This has led designers to reconsider their retail strategies.

Designers Adapt

Florentina Agu, founder of Hertunba, stated her brand will focus on direct-to-consumer sales, prioritizing retailers who understand the artisanal nature of their business. Diarra Bousso, founder of Diarrablu, highlighted how Industrie Africa’s dropshipping model allowed her brand to reduce inventory and gather valuable customer data.

Leveraging Cultural Moments

Kanabar found that traditional e-commerce marketing tactics like discounting were less effective than collaborations with cultural events, such as the V&A Museum’s Africa Fashion exhibit and Lagos Fashion Week. These collaborations improved conversion rates and basket sizes.

Industrie Africa Plus: A New Chapter

Industrie Africa Plus aims to leverage these learnings by connecting African fashion with premium retail opportunities, luxury hotels, and cultural institutions. Kanabar believes the company’s seven years of experience will be invaluable in its advisory role, fostering growth within the African fashion ecosystem.