Ease of Doing Business & Supply Chain Linkages will Advance Global trade with Africa.

 

"If you can't get a product in and out of a country then it is hard to participate in the global economy." Adam H., Walmart International while speaking at the 2018 edition of TWA Summit

We are now only 6 days away from the 4th edition of the annual Trade with Africa Business Summit and I wanted to share with you an important conversation from our archives so that you will have a better idea of what to expect this year should you attend. This platform offers an immersive experience and is designed to be enriching particularly to business leaders seeking clarity on current business climate in Africa as well as policy implications. Our conversations are private sector led and policy supported. In 2018, as example, I held a Q&A session with Adam Hemphill of Walmart. Video and transcript are below. Also link to the 2021 Agenda and Speakers is here - see you soon! https://www.twasummit.com/agenda

TRANSCRIPT

Toyin Umesiri: The next session is very important session to me. I want to take a moment to actually also say thank you to one of our key sponsors; Walmart. We couldn't have done it without them. They've given us support from day one and the next panel is actually us having a conversation directly with the representative of Walmart. So please welcome to the stage Adam Hemphill. (clapping)

Adam, we are doing this. My goodness! Thank you so much for coming. First of all thank you for your support from when this was just an idea right. Many people do not know. But we're here. From day one up through the leadership at Walmart just listening and being a part of it and just throwing your weight behind this so thank you. Please extend our thanks to them. 

Adam H.: Oh of course. 

Toyin U.: I'll let you introduce yourself. 

Adam H.: Hi everyone. My name is Adam Hemphill and I'm Director in our global Government Affairs team. So I specifically support Walmart's operations in Africa. Really happy to be here. Thrilled with the crowd. Such a great event yesterday and just humbled by all the people that traveled so far and to come right down here to Bentonville so thank you to everyone in the room. 

Toyin U.: So I feel like personally I have one leg in Africa and one leg here and I listen to both conversations and many times people ask me "Is Walmart in Africa?". Right like Walmart?...Africa? So can you help us understand what's your operation set up is around on the continent? 

Adam H.: Sure and I'm glad you asked the question. I get that a lot too. I'm based out of Washington DC. I go to a lot of conferences and then I mentioned stores in Africa. They say "Walmart has stores in Africa?" So I'm glad to be able to shed a little bit of light. I thought of two different numbers that sort of explain the footprint. One: 423 stores in Africa. I think in the past panel we talked about the difficulties and the challenges that can come with investing in a new country. Walmart did it with a partner. That's sometimes the best way to go about it. Walmart found a great partner in MassMart, which is the second largest retail group in the continent of Africa. And 423 stores in 13 different countries across sub-Saharan Africa. So doing a lot of work of understanding the customer there. The other side of it which many people probably think about as well is a bigger number: 11,700 stores. That's number of stores across the across the world and then 5,000 of those in the United States. And you're seeing that in 28 countries. And I think that's important to think about that side of the footprint as well. 

If you do get a chance to walk down to a store today, or over the weekend, which I really hope that you. You walk in you're probably going to find jeans, sportswear, spices, coffee, let's see what else is there there's some citrus products. The whole range of beauty supplies. All kinds of products that are coming from Africa and that's just the United States. And that's just the ones that I could identify readily. I know of other suppliers that we've worked with in Africa that are exporting to our stores in Chile and any of the other number markets so the footprints is a bit larger than one might think. And then I guess I should say for those people that came to visit us if you're thinking about what are those stores in Africa. I don't know them. I think probably people would be most familiar with our Game stores. These are general merchandise and some grocery and then Builder's Warehouse is probably the biggest one that's all across the continent. And we have an under a bunch of sort of general warehousing items that are in like Jumbo and Cambridge as discounters that is in South Africa. 

Toyin U: So thank you for that. I know yesterday Albert (Zeufack) from the World Bank he gave us some explanation about the continent. So given your size, you know, how attractive is Africa and also do you follow the numbers and which regions around there are you looking at?

Adam H.: It's a big question. Big question. I think definitely you know this investment in Africa dates back to 2011. So we've already had a good seven years of experience and are still learning along the way. I think our CEO a number of years back - they asked him the question you know "what is it about Africa why this investment in Africa?" And he said, which I thought was a really good really good answer that stands true, is because we believe in the future of this part of the world. And I think there's a lot of opportunity there. You look at our our slogan for our company; we save people money so they can live better and that's true all over the world. I think you know a central part of our investment plan our format's that cater to the new and emerging middle class. 

And so there's - as our distinguished speaker yesterday showed us; there is opportunity among an emerging a new middle class and we believe that we have the products and services that they want. Whether that's consumers or small businesses that are looking to you know back supply their businesses as well. So it's a real opportunity for us to grow and we feel like we feel an important role. There's a large informal sector in a number of countries and we could play a role in at least part of the market of being a formalizing and all the concomitant benefits that come with formalization when it comes to sort of building out the the base for institutions, for tax collection so on and so forth. So yeah happy to be there. 

Toyin U.: So for me personally the story of Walmart's is such an inspiration to me. And even as Walmart has become number one here's what I know to be true; Walmart grew while serving the poorest of the poor. When you think about Bentonville for some of us that arrived a day sooner we actually took a tour of the Walmart Museum. So if you're able to check it out please downtown. Check out the Walmart museum because it told the story of the founder of Walmart starting here in Bentonville to become number one. And imagine what Bentonville was more than 50 years ago. That story tells me Africa has a bright future if we would do everything that we can if you will have the right partnerships, the right vision. We can become number one; the next economic growth. And so the Walmart story even though now you're big and you're you know. But I always just go to the small story and the core principles of your company about serving you know you know; saving people money so they can live better. And just around that, I'm assuming too that that's also your approach in Africa; saving people money in Africa and I love it. Right? I just love it because not all companies have that DNA. And that DNA really resonates with me as we're also looking at the region of Africa. So I don't see a better culture that can actually win in Africa.

Adam H.: I think that's right I started with the company about twelve years ago and if you think about the history - if you've been to the museum, you see that you know a lot of that growth was really serving parts of the country that didn't have access to a bunch of products and the choice and selection at prices that they could afford. And so I think we try to carry with that with us along the way or wherever we go into a different market. I think that one way that we're lucky as a company is that you know retailing is local. And we know that wherever we operate. And so I think that's sort of a bit of a DNA that we're able to take with us wherever we go and understanding that we need to adapt to the circumstances someplace and then we have room to learn from customers as much as there's something that we have benefits that we think we can give. 

Toyin U.: Awesome. So you know just like Scott talked about yesterday, there's a will from an investor standpoint there's a will to engage. Capital will flow to the right place. If you...could you share with us a little bit of what you consider some of the may be obstacles/roadblocks - as much as you're comfortable sharing...challenges to doing business in Africa that you've encountered and your office deals with. 

Adam H.: Sure sure um well you know...with Walmart I think that you you might know you might learn this in the museum. In Walmart we don't say obstacles we say opportunity. Everything is an opportunity and there's a space to fill. But yes I think that for us you know they laid it out yesterday what were the three that he laid out? Rule of law yeah rule of law, mature regulatory and tax policies, zero corruption. Those are like the base for anywhere you operate in the country and I think anything that we would say would be derivative of that. So for us it's like ease of doing business. Of course when we're approaching a market for investment we say you know is what's the size an opportunity of the marketplace? Is it a fit for what we have and what our offering is for customers? I think when it comes to...you know we do talk a lot at a high level about you know - oh if we could just facilitate the movement of goods across border. I think that you know we stayed at a high level and everyone says ok ok ok you know we get it. But it really is important, because for us you know if you're thinking about trade with Africa if you can't get a product in and out of a country then it's hard to participate in the global economy. 

if you can't get a product in and out of a country then it's hard to participate in the global economy. 

And those barriers can be can be very very real and so for us you know any opportunity that we can have to facilitate logistics. There was one point where we sat on a couple years ago on the President's Advisory Council for doing business in Africa. And so I was trying to identify some of these issues and you know I talked with our colleagues at Massmart and they said you know listen we're just trying to get a product from the factory to the store and if we have to stop several steps along the way it can be really difficult. So in any way that we could facilitate that movement is really good. 

I think we can talk a little bit later about sort of the opportunities for suppliers and how do we how do we build up those opportunities for different suppliers. That can happen globally but in a lot of ways that can happen locally if you think about. I looked back at even some of our globally competitive suppliers here in the United States and if you talk to them and you follow their histories, they're like; ok we started out in our store and then we went to a distribution center and then once we built a little bit of scale we started exporting to Canada exporting to Mexico. So they start building things regionally and then they started learning the skill sets to compete globally. And so for me I think starting and building that scale locally can be good too. So even you know while there's facilitation at the border there's also a facilitation about all around the key metrics of doing business for us permitting and licensing for construction projects or getting those infrastructure projects in line so that you can get the product to the store is really really important for us. 

Toyin U.: You just gave me an aha moment right now. So what it is is the fact that, I've always thought of you know - looking at the investments like company like yours have in Latin America, India, China I'm going why not...why not (Africa)...why not... right? But what you've just talked about I think is a challenge for everybody in this room. When they see (locally) the aggressiveness and what you're doing locally then the "swat" team comes in. That's what I'm getting here. Is the fact that if you can see aggressive push to connect farm-to-market. You know if you can see people on the ground - we do have some logistics people doing some interesting things on the continent here - But if you can see that local engagement, local activities and you can then companies like yours can then come in. I'm thinking out loud here. My brain does that to me. But that's interesting because I have always seen like Latin America the last few years the big investments in logistics that Walmart has made. And I'm like why not Africa? But I think it's coming- I hope. But on our side we have work to do. To attract that push. 

Adam H.: Yeah - one thing I was going to say there is that one thing that struck me was in the presentation by our colleague yesterday was talking about the amount of inner Africa trade. And so I see that growing that is actually an opportunity to grow trade even more broadly. And I'll give you an example that's not in Africa. A lot of times people talk about one of the most integrated trade zones is North America between US , Canada and Mexico. We had a situation one year where we had a high demand around the holiday season for baked goods. But you know pies other various baked goods and we had a run and didn't have enough supply. And so we were able to find...it's difficult for Walmart to be true - I think we talked about that yesterday - to find suppliers that scale, but we were able to identify a bakery in Canada that was able to supply us in a short amount of time. Now would that have been able to work if they there was a stop at the border and they couldn't get the product this fresh product available on time?

Now would that have been able to work if they there was a stop at the border and they couldn't get the product this fresh product available on time?

Would it have been able to work if it was - you know a tariff or if it was miss-qualified at the border and there was a tariff that was far beyond the price point at which we could sell it for the customer. Would it work? Would it have worked if they weren't able to get all of the you know whether the food and regulatory things in place in order to makes that make sure that cross? All of that was critical to maintain the supply for the customer. And I think that you know there's real opportunity to be able to have those those inputs that are fed into it to be able to do that internet connectivity across Africa to build the mass 

Toyin U.: Why are you doing this to me? So oh my gosh. So I'm almost thinking we need we need a strong session on logistics and supply chain in Africa. So because you know this is what I used to do right - connecting the dots, solving problems logistics, supply chain, manufacturing point A to point B. Right? Maybe that's what...let's think about that as something a take away. To just say okay when we do what we need to do people will come but what can we do? Looking at the trade agreements right now what does it take to move product point A to point B and lower the barrier. I know President Trump last week had talked about barriers to trade. And in my head I was like what are those barriers? What are those barriers? But I think you've just mentioned; streamlining the movement of goods across borders. Yeah. Period. 

Adam H.: Yeah and to be clear I think we do talk about that a lot and so it's great we need to continue the conversation. But I think one thing that we can be doing is taking that conversation to other areas around the world around the country. And so being able to if you know there's a bunch of people in Washington to talk about oh the need for supply chain logistics that's one thing but if you've got business folk that are talking to their governments and saying hey I hear you're looking at this effort for trade facilitation or there's efforts for capacity building let me show you why this would be beneficial to us.

I hear you're looking at this effort for trade facilitation or there's efforts for capacity building let me show you why this would be beneficial to us.

Or you know sometimes it's a conversation about import or export hey I'm making apparel but sometimes I run out of buttons or I ran out of zippers I need to be able to get the buttons and zippers those elements quickly because otherwise I'm gonna lose you know faith with my buyer. 

Toyin U.: Right right. And for me I think with the experience I've had you know is that one button does matter in the supply chain. Is if we all think as merchants. If we all think and even if we can get the political leaders to think as business people to understand the challenges that businesses face and to commit to helping those businesses succeed. I think for me the last panel that we had it just shows that the American government has a commitment to the business community in America. That's a model that African leaders and I'm challenging those in the room representatives of African government; commit to your business community. You have got to. And there's more money to be made by the government to fund projects from the private sector than anywhere else. So I feel also we have to continue to empower and strengthen the business community in Africa. You can tell that almost special is coming out of it because it's to be continued. 

So we've talked about you know retail in general but I know that there's a lot of people in this room that when it comes to the reverse of how do they gain market access into the US. And I can tell you that everybody ultimate goal of most suppliers all over the world is to get on a Walmart shelf. Like not just Africa like anywhere else in the world. But I also know that the standards are the highest in the world. So what advice would you go short - long term for entities, government, people that ultimately have a desire to end up on a Walmart shelf. What's that pathway? What should they be thinking about? 

Adam H.: Sure I mean I don't want to mince words it's hard I think we all know it's hard and reasons are numerous. Sometimes it's the standards at an entity like Walmart it's the scale; being able to supply the scale because we just have a commitment to the customer to give them what they want, when they want, where they want it. And so that can be that can be a challenge. Also the challenges the goal is to get on the Walmart shelf, but there are only so many shelves. You know so that can be a difficult decision. There's also like you know that other opportunity of like there's the you know through online and different marketplaces. Then you have endless shelves. You know again I'm not I'm not a retail operator. And there are a number of people in the room that you know are from Walmart and so if you get an opportunity to talk to someone or even if they're not at Walmart I think there's actually a few business here that have worked with Walmart for some time they can give some good advice. 

I would say one start with your product. Think about you know how you differentiate your product versus what else might be in the store. For those people that are visiting here that have come to the States for the first time or they've come to Arkansas I encourage you to go down to the store. Just walk around and see how the retail works. If you've got a specific product I have a good friend that has a shea butter business. I saw her talking to a buyer at Walmart and she knew the price point she knew what her product was. She knew why hers was different and she was able to you know lay this out this is the differentiator that I had. She had registered as of that a potential vendor for Walmart. She had everything in place and then it was hard and she's still working it you but you know she's taking those steps and it can be slow. So I would say keep at that piece of it. Understand you know it's like I think ideally we'd love to get to the point where we've identified you know maybe different sectors of quality you know Egyptian cotton or what have you. I think that's always an opportunity. Look at the online possibilities just to get your product out there. Get it and get it on in the aisle. And then you know access the tools that are out there. 

We had a great panel here that laid out you know some of the the ways that they can address some of the challenges that you have. I know for women entrepreneurs there is Weconnect International they've got a website that'll tell you exactly how to interact with larger corporations when you're trying to build supply. And then don't forget you know we've got that eye on the prize for a larger entity, start local you know that's everything. I said that at the start retailing is local. if you have a local store and you can find it talk to them you know you've got a product it could be that you've got a product that everybody else is making and if you're just different you talk to the store manager of your local store and say hey we got that but we don't have this. I could do that. You know and then you can adjust it a little bit and then eventually you can sort of build up scale and recognition that way. I think it's a good step to take. 

Toyin U.: Right and you know part of it is also being retail ready right. It is even before the first opportunity to talk to a buyer there's months of work that has to go in to get the numbers right to get preparation to do package and to get certification to do all of that. And there are even people you know outside of that I can help you get ready but then you've got one shot to just have that conversation and that pitch. And these are all things that I hope we can also help African - you know potential exporters to start understanding that the US market is the US market right. Whatever the consumers want you know we know how to go find it. 

And on a lighter note you and I have talked offline about the Black Panther movie right. But from a different perspective one of my friends from Canada before it even came out she's here Nancy from Canada she said knowing that "Panther have you been watching it?" People are asking me what are you going to wear to go watch it? Like watch parties. Because we do know for those in the retail business - yes it's a movie but really there's a commerce to the movie. Right. When you have a Batman movie there's Batman t-shirt there is Batman this Batman that and Black panther was the same. And I was like we missed it right because the desire to wear African to use African xyz existed was built up who hadn't built the supply chain to meet that demand. Okay? So within the community people were asking like what I'm wearing are waiting to find it right we talked about apparel being talked about apparel exports from East Africa. How do we ramp that up because I see a demand. So I'm just putting that out there just to let people know we need to fix we need to build streamlined supply chain that meets the demand for authentic African raw and manufactured goods. And I hope I know for sure I don't hope I know. That we have a partner on the Walmart side that is ready to see and listen and definitely make your decision but at least give us an opportunity to present that. 

And I hope I know for sure I don't hope I know. That we have a partner on the Walmart side that is ready to see and listen and definitely make your decision but at least give us an opportunity to present that. 

Adam U.: Yes know I think that was an exciting moment because it unveiled a demand that was out there that people may not have been aware of before. That's why I'm excited about sort of the opportunities of either online or omni-channel retail because you can you have this long tail of assortment of merchandise that people might want at a certain time and you know. If you might not be able to have it in stock in a store then at least you have it available to the customer. And I think that you know by enabling that you can keep it going. I think that as we look to go forward there's just new opportunities. 

Toyin U.: Absolutely and finally you know we have five minutes more they just gave me the sign. But I think that you know we can please visit the Walmart museum...because the principles of trade like if you look at the fortune 500 companies and you look at the retailers you add them up and you look at the oil for African countries that are primarily oil exporters, there's more money to be made in trade than oil or raw resources. So if we do all that we can do and we're gonna get there and I want to ask well I want to ask you maybe final comments final words about what's taking place here and there may be one or two questions if you're open to that from the crowd or please final comments. 

there's more money to be made in trade than oil or raw resources.

Adam H.: Yeah no I mean I think that you know we talked about this a little bit before but you know these big high-level things like the World Bank ease of business indicators those are things to pay attention to. Because what they are is the culmination of conversations with the private sector all along the way. They can really indicate some really meaningful things that can be done. And so I'm if you know two of those indicators two of the eleven focus on permitting and licensing. And for us you know we've gone back to even our business and identified what are the best practices to even facilitate permitting and licensing. And what we got are some great results and they're not saying the laws need to be this way or this way but it's actually more general saying no we just need to see the laws written so that we know what they are. Because we want to comply with the right ways.

We need to be have a way where we can interact if we can you know in integrate best practices whether online so that we can see where it's the status of a license. All of these are great steps to to create the single window where we can interact. And I think that expands not just to permitting and licensing but to trade and trade facilitation. If we can automate a process that you know that removes... (i.e.) any sort of barrier to corruption. If you can lose the possibility that a component part of your product is that miss-classified and suddenly you find yourself with a two hundred percent duty. If you can automate a process you can remove that possibility that you know sixty elements of your product have to be re-keyed every time they go through a certain process. All of that is great opportunity I think. And it's simple we think. We sell stuff. We just want to do it easily. 

Toyin U.: Transparency all of that is true it's real. I think maybe do we have one question in the room? Oh they're making you go free... you make it easy okay. Thank you so much again please help me to thank Adam and Walmart. Thank you so much

For more information on 2021 Trade with Africa Business Summit to be held virtually visit: www.twasummit.co