Why U.S. retailers are missing out on billions from African consumers

MallforAfrica is an online service that allows customers in Africa to access the world's most sought after brands and get them delivered to their door.

(CNN)A section of Africa's population has been steadily climbing the affluence stakes, with numbers of multimillionaires predicted to rise by 59% in the next 10 years.

In spite of that, many U.S. retailers don't ship their wares to the continent, fearing fraud or cumbersome import procedures.
This gave Chris Folayan the idea to start MallforAfrica, an online platform through which shoppers in Nigeria and Kenya can buy products from America and Britain.
    "The main problem is that many western companies don't have much knowledge about the Africa," he says. "When I talk to companies I tell them Africa is a huge market - they are probably not tapping into billions of profit. And Nigeria is Africa's biggest economy," Folayan adds.
    The U.S. based entrepreneur would regularly travel to his native Nigeria carrying several suitcases stuffed with American-branded clothes, sunglasses and makeup his friends and family asked him to bring.
    But it was when he wasn't allowed to check in for a flight with 10 tightly packed bags, even with paying for the extra weight, that he knew he was onto a business idea.
    "That was a turning point. I realized that people knew exactly what they wanted, they could see a product online and had the money to buy it, but there was no one who would ship it to Nigeria," says Folayan.

    Easy shopping

    MallforAfrica works with 150 brands and department stores, from Macy's and Victoria's Secret in America to Selfridges and House of Fraser in the UK.
    Chris Folayan
    Customers download the company's app to a smartphone or a computer, and use it to access a featured brand's online store. From there they add items to their cart choosing the MallforAfrica button on the payment page. The company orders the items which are delivered to one of their warehouses -- in Portland, Oregon, or London, United Kingdom -- where they are checked before being shipped to Africa: "We make sure it's what you want, it's not two left-foot shoes or a pink T-shirt instead of blue," says Folayan.
    The process takes between five and 15 business days, and the entrepreneur says the company transports around three tons of goods per week.
    "Not all stores are created equal, some ship in a few days, some take up to a week. Once we get an item it takes three to four days to send it to Africa," he adds.
    Customers can direct their purchases to their home or collect them from a depot, which Folayan says is the preferred option.

    Global brands, local payment

    Due to shipping and import costs the price tag is 12% to 15% higher than in the U.S. or Britain. This means that a pair of $75 shoes by U.S. brand Nine West will set a Nigerian customer back around $85.
    "We accept local forms of payment such as mobile payments, so even if you don't have a Visa or a MasterCard you can still use our platform," says Folayan.
    However, 90% of MallforAfrica customers use the company's online rechargeable webcard, which they can load with however much money they want to in local banks.
    Folayan says that because online shopping is still largely distrusted in Nigeria customers feel safer using a card with a limited amount of money than one connected to their bank account.
    The company plans to expand to 17 African countries by 2017.