Rwandan coffee traders are optimistic about the benefits of the new partnership between the Rwandan government and Alibaba Group because they see it as an opportunity to broaden their market by trading online and directly attract buyers in the huge Chinese market.
On Wednesday, Rwanda and Alibaba Group signed in Kigali three agreements to facilitate electronic trade in Rwanda and the rest of Africa.
President Paul Kagame officiated at the landmark ceremony, which was attended by the Alibaba Group founder and Executive Chairman, Jack Ma.
The agreements signed are intended to strengthen cooperation in support of Rwanda’s economic development by promoting policy innovation, enabling cross-border trade of Rwandan products to Chinese consumers, facilitating tourism to Rwanda, and providing capacity building to empower the growth of Rwanda’s digital economy.
The deal has especially excited Rwandan coffee traders who have already experienced the appetite of the Chinese market for their top quality coffee since they started shipping it to Alibaba stores slightly over one month ago.
Siméon Ngendahayo, the Managing Director of West Hills Coffee Company, which is among the three Rwandan coffee companies picked by Alibaba as part of the experiment, described the deal as a potential chance to sell Rwandan roasted coffee directly to Chinese consumers.
His company’s coffee, sold under the Garuka Coffee brand name, is normally shipped mainly as green coffee to Europe, Russia, USA, and South Africa, as well as East African countries like Kenya.
But clients there have been mostly buying green coffee, just like most of the coffees mainly exported from Rwanda, instead of buying final coffee produce or roasted coffee.
Now Alibaba is seen as a game changer because buyers in China are interested in roasted coffee made in Rwanda and sold directly to buyers through Alibaba online shoppers.
Under the agreement between Rwandan coffee traders and Alibaba, the group buys Rwandan roasted coffee and sells it to its online shoppers in China.
The local traders are paid by Alibaba by wiring money to their bank accounts. Moreover, what has surprised both the company’s officials and the traders is the high appetite Chinese consumers have for Rwandan coffee.
“This is a tremendous step forward. Globally, the Rwandan coffee was mainly sold as green coffee at approximately 97 per cent but Alibaba is going to help us sell roasted coffee, which will create jobs for many Rwandans here,” Ngendahayo said.
Rwanda’s maiden shipment to China as part of the agreement with Alibaba, which consisted of 1,800 packs of 500 grams each, was sold out very fast.
RDB’s Chief Executive Officer, Clare Akamanzi, said on Wednesday that some of the brands offered to Chinese consumers under the partnership were sold out on day one, which underlines the high quality of coffee that Rwandan farmers produce.
She said that the feedback was consistent with other reviews that Rwanda coffee received from other markets, such as the “Best of the Best” and “Coffee Lover’s choice” awards in New York.
“When our Chinese friends buy Rwandan coffee from Alibaba platforms, they will be enjoying coffee that is renowned for its supreme quality. Equally, when Rwandan coffee producers embrace Alibaba’s platforms, they can be assured that this is a market on an upward trajectory, with a long-term future,” she said.
China’s speciality coffee consumption is growing at 15 per cent every year, compared to a global growth of 2 per cent, Akamanzi said, describing Rwanda’s deal with Alibaba as a “ win-win situation”.
Ngendahayo agrees, explaining that Alibaba is directly connecting Rwandan traders to buyers in China where market for their produce is assured.
“I went to China many times and the young generation there is drinking coffee a lot. There is no doubt that this is going to be an exponential market,” he told The New Times yesterday.
Other Rwandan coffee traders in the deal are also excited, including Benjamin Nkurunziza, the Sales and Marketing Manager at Rwanda Farmers Coffee Company (RFCC), and Emmanuel Gatare, Managing Director for Land of Thousand hills coffee company.
“Alibaba and the Rwandan government opened doors for us and it’s now up to us as the private sector to exploit this opportunity and make this partnership successful,” Nkurunziza said in an interview.
Gatare said that the partnership has “opened the door” for Rwandan coffee traders and he wants next steps to focus on making efforts to understand the Chinese market better and maximise the opportunity.
“We now have to go to China and better understand the coffee market there. I am very excited; it’s a big achievement not only for us but our whole country. We now need to follow up on this opportunity and make it work,” he said.
The Alibaba Group partnership with Rwanda, launched in Kigali on Wednesday, is part of a larger initiative known as the first Electronic World Trade Platform (eWTP) in Africa.
It’s a private sector-led and all-stakeholder initiative for public-private dialogue to nurture e-Trade rules and foster a more effective and efficient policy and business environment for cross border electronic trade (eTrade) development.