Shoes with Sole: Ethiopian Web Success Story

Ethiopia’s bustling capital, Addis Ababa, is experiencing a building and business boom. Foreign investors and Ethiopia’s entrepreneurial and widespread global diaspora are investing again in the country. But Ethiopia still relies for most of its foreign currency wealth on exports of unprocessed coffee beans and leather hides — a model that leaves the bulk of the profits made outside of Ethiopia.

But one shoe company provides an example of a home-grown business that is finding success in the international marketplace, while repatriating most of the profits for its goods back to Ethiopia, creating jobs and local wealth.

Ethiopia’s economy is mostly dependent on agriculture, which accounts for 60 percent of exports and 80 percent of employment (CIA World Factbook). The country has a tiny private sector and high youth unemployment. It is difficult to find funding for small businesses. Yet, because of the high population growth, the country needs to create more jobs.

The Economist magazine has forecast Ethiopia’s economy will grow by 7 percent in 2010, becoming the fifth fastest growing economy in the world, and on course to surpass Kenya to become East Africa’s biggest economy. While this sounds impressive, the country has to run hard to create enough jobs to meet its growing population and still faces significant food security problems.

One company, soleRebels, is combining a clever twist on a local tradition – recycling rubber from old truck tires into shoes, locally known as selate shoes – with sophisticated design concepts and high quality craftsmanship to make a global footwear hit.

Co-founder and managing director Bethleham Tilahun Alemu, a 30-year-old African web-vending entrepreneur, has turned this local craft into a global fashion design hit by adding colourful cotton and leather uppers to the tire shoes. The recycled rubber shoes come in many styles: from handmade flip-flops to boat shoes, loafers, and athletic trainers resembling the popular American sports shoe, Converse (http://www.converse.com/).

SoleRebels’ (http://solerebelsfootwear.weebly.com/index.html) shoe factory is on the outskirts of Addis Ababa in the historic village of Zenabework. Despite its location, it is reaching the international markets through online retailers like Amazon.com. Shipments take between three and five days to arrive in the United States.

And the secret to this small start-up’s success? Apart from great shoes and funky design, Alemu puts it down to this: “We are sitting in Addis Ababa but acting like an American company,” she told The Guardian newspaper.

It doesn’t hurt that Alemu is also money-smart: she is a former accountant.

Started five years ago, soleRebels now employs 45 full-time staff making 500 pairs of shoes a day. The shoes cost between US $33 and US $64. They are also being sold in Japan and the United Kingdom on Amazon’s shoe-selling website, http://www.javari.co.uk.

In 2010, Alemu hopes soleRebels will make US $481,000. But soleRebels has an even more ambitious goal: to become “the Timberland or Sketchers of Africa.”

Timberland (http://www.timberland.com/home/index.jsp), an American shoe and boot maker, has been a pioneer in high-quality leather footwear, breaking new ground in adopting green manufacturing processes and exploiting the power of the web by allowing customers to customise their footwear.

SoleRebels has cleverly exploited the advantages of the global marketplace to grow its customers and profits. The business has done this with just one leg-up: a line of credit from the government to help with large orders. With 6.2 million people out of a population of 80 million needing food aid, Ethiopia is still highly dependent on international aid. But Alemu is showing there is a way to build a sustainable successful business.

Inspiration for Alemu came about when she was thinking what Ethiopian product could be produced in a sustainable way. She remembered the sandals worn in the country.

“Recycling is a way of life here – you don’t throw things away that you can use again and again,” she said. “I wanted to build on that idea.”

Ethiopian shoe makers have had a difficult time in recent years, trying to compete with cheaper Chinese imports. But rather than just trying to come up with a shoe that was even cheaper than the Chinese ones, soleRebels decided to build a business selling shoes to the more lucrative export market.

Alemu reasoned that good design would attract a higher price. She did research on the internet to find out which designs worked well and what were the latest trends in footwear.

This research formed the basis of her range of shoes, which have catchy names like Class Act or Gruuv Thong. The sandals and flip-flops are either cotton-covered or leather covered. The Urban Runner shoe sells best and is inspired by the Converse All Star sneaker.

SoleRebels has a regular supplier of old truck tires and inner tubes and has women weave and dye the cotton, jute and hemp uppers for the shoes. Almost all materials are locally sourced. Old army uniforms are cannibalized for their camouflage pattern.

SoleRebels has also been canny in seeking Fair Trade certification (http://www.fairtrade.org.uk) to help with marketing and selling the shoes.

To increase the market for the shoes, Alemu bombarded American retailers with emails and shoe samples to pique their interest. Because of the U.S. African Growth and Opportunity Act (http://www.agoa.gov), soleRebels’ shoes can be imported into the United States duty-free: a big price advantage in the U.S. marketplace which has helped grab the interest of retailers like Whole Foods and Urban Outfitters.

This interest soon snowballed, and people were placing orders through the soleRebels website (http://solerebelsfootwear.weebly.com/index.html). Orders come by courier from Ethiopia in about a week to the United States.

With all this interest building, Amazon, the leviathan online retailer, decided to become a customer for the shoes. Online retailing has been a huge boost to the growth of soleRebels. According to Alemu, it has enabled the company “to understand the market needs and demands in real time” — a huge advantage to a start-up company far away from its markets.

There is another advantage to using the web to grow a business: it has enabled soleRebels to take greater control of the whole process. The company negotiates directly with retailers, handling orders and credit collection, and this makes sure most of the profits of the business return to Ethiopia.

Making soleRebels quickly profitable has been a benefit to its workers. Starters at the company make US $1.92 a day, while experienced shoe-makers earn US $11 a day (a good wage in Ethiopia).

“In Ethiopia we have become used to taking money from the West, to always getting help,” Alemu told the Guardian. “That does not make for a sustainable economy. We need to solve our own problems.” And what does success enable them to do? SoleRebels are now building a solar-powered factory to replace their current workshop. And there is a steely pride in the firm’s success: “People buy soleRebels because they are good, not just because they are green or from Ethiopia,” Alemu said. “Our product speaks for itself.”

By David South, Development Challenges, South-South Solutions

Published: January 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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African Culture as Big Business

In the last decade the world’s creative industries (including crafts, fashion and design) have gained greater respect for being the spark that drives economic development and entrepreneurship. They are seen as fast growers and good job creators, and importantly, the lynch pin in cultural identity and cultural diversity. UNESCO, through its Global Alliance for Cultural Diversity, has been in the forefront of helping African countries re-shape their policies to take this into consideration. The promotion of cultural industries also has been incorporated into the New Partnership for Africa’s Development (NEPAD).

The global clothing industry is estimated to be worth US $900 billion a year. Culture and creativity are big businesses: according to UNESCO, in 2002 the UK exported US $8.5 billion in cultural goods, the United States US $7.6 billion, and China US $5.2 billion. The UK’s Burberry fashion label alone made £157 million in 2006.

This is good news for Africa’s growing fashion industry, which is finally getting the attention and respect it deserves. Entrepreneurs are tapping into this awareness as a great way to make money. Well-known Nigerian fashion designer Alphadi says the continent’s fashion industry is “giving Africa a chance to show its true self, its solidarity, its huge generosity and its greatness.”

Africa’s fashion entrepreneurs are showing more and more confidence and striding with pride across catwalks around the world. And despite the problems faced by black models – as highlighted by supermodel Naomi Campbell in her recent press conference in Kenya – some African models have a growing international profile: these include Alek Wek from southern Sudan, and Waris Dirie from Somalia. Campbell has said she plans to set up a modelling agency in Kenya to increase opportunities.

Just as African music has fans around the world, the continent’s growing fashion scene is gaining fans and more attention. From Hollywood stars to European catwalks, African fashion designers and apparel makers are feeding the industry’s hunger for novelty and new ideas.

African entrepreneurs, from village craftsmen to ambitious and creative urbanites, are finding ways to cash in on this rising awareness.

The rising stars of South Africa were on full display at this August’s Cape Town Fashion Week. David Tlale, who produces glamorous haute couture creations, places community empowerment in his hometown of Johannesburg at the centre of his business. Tlale was joined by rising stars Thabani Mavundla, Thula Sindi, and Craig Jacobs.

Creator and founder of the Fundudzi label of Johannesburg, Jacobs presented a couture collection at Paris Fashion Week in July. A former TV presenter-turned-fashion designer, Jacobs sees a renewed pride in African creativity and a new dialogue about Africa’s place in the world. His motto is: “Africa reworked…Africa re-inspired… Africa renewed”.

Established in 2004, his clothing company for women strives to be socially and environmentally responsible: “Fundudzi is also an eco-conscious label, utilizing materials such as organic cottons, soy and bamboo as well as cashmere produced in Africa which is not harmful to the environment,” he said. “The message which we want to resonate with the rest of the world is that Africa has always been organic.”

“Our label has grown out of the desire to help change the perception of our home, Africa, by presenting clothing designed and created here which can compete on the world stage.”

Jacob benefited from support from various organizations in South Africa to get his business plans sorted out. The country’s tourism body has focused on fashion with its C’est Couture campaign. But he has also struggled with the complexities of exporting his designs and navigating global customs regulations.

“There has been a lot of interest internationally in our collection, but I am not sure what the rules and regulations are … We need an over-riding body to help assist us young entrepreneurs. My experience in Paris, in July, has been that we do have something new and fresh to say in fashion, and we can produce at the same standard as the rest of the world.

There was validation of that. But we as Africans need to follow our own signature, look internally to come up with inspiration, and show that to the rest of the world. “The global village environment, and the access that technologies such as the Internet have provided, means that we can tune into the same stimuli in terms of trends and fashion directions to ensure that we are on par with the rest of the planet. I do believe that the world, bored with the same trends they have been exposed to for so long, are looking for a new guard of inspiration – and we need to empower ourselves with the right tools to answer that call.

“Our positioning is quite simple – our label is dedicated to creating jobs in Africa, thereby reducing our dependency on aid in securing our future …I wanted to create a label which is rooted in Africa, which tells African stories, but which is not tradition or museum curio – rather, intelligent pieces which can fit seamlessly into the global firmament of fashion. The label is focused on redressing the prejudices about the “dark continent” – each collection is designed as a travelogue, informing the world about the rich tapestry of life in Africa.”

Another hub of dynamism in the African fashion scene is Nairobi, Kenya. Kikoromeo connects its catwalk fashion designs with the principle of community development. The label uses mostly Kenyan materials – cotton, silk and wool – and works with local artisans, including women’s groups. Its bags are woven with Kenyan Sisal by Machakos women’s groups, and the beadwork is done by Maasai women’s groups.

Anna Trezbinski of Nairobi, who is popular in Hollywood and has contracts to provide items to top designers like Paul Smith, employs 800 people – mostly Masai women in her workshop in the Great Rift Valley.

This new wave of African fashion designers is proving that anyone with talent, a website and a fan base can puncture the bubble of the European and New York catwalks and make a splash.

“Africa is a haven of inspiration,” says the Tanzanian-born, Nairobi-based designer and collector Lisa Christofferson, who has clothed Ralph Fiennes, Rachel Weiss and Jane Seymour. “Africa for many years now has been the flavour of fashion,” she says. “It has really opened the door for us.”

She believes the internet has expanded her business and her brand. It gives clients and boutiques around the world the ability to import her hand-painted, African-inspired cashmere sweaters, bedspreads and throws. Many are ceremonial cloths of the Kuba Kingdom in Congo.

Another designer based in Kenya, Annabelle Thom, believes changes in the last seven years are responsible: access to TV and film, music channels and a burgeoning middle class with money. “People care more about fashion and if you look around in Nairobi, the average person is beautifully dressed – people are spending money on themselves,” she said.

Ethiopia has also been identified as a bubbling fashion hot spot for its indigenous raw cotton and potential to produce other natural fibres. Ethiopian designer Guenet Fresenbet launched Ethiopia’s first fashion magazine, Gigi, to help take the lead.

By David South, Development Challenges, South-South Solutions

Published: October 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Youth Surge in the South: A Great Business Opportunity

The world’s youth population (those between the ages of 12 and 24) has now reached a historical high of 1.5 billion – 1.3 billion of whom are in developing countries (World Development Report 2007). Nearly half of the world’s unemployed are youth, and the Middle East and North Africa alone must create 100 million jobs by 2020 to meet demand for work.

Some 130 million people between the ages of 15 and 24 cannot read or write. This enormous cohort of talent and energy in many countries of the South goes untapped. Many youths lack access to quality employment and education opportunities. Yet knowledge of business could make the difference between success and failure for these young people, especially when they come from poor families with few choices. Business is also a great way to help harder-to-reach young people such as child soldiers, young girls, youth affected by HIV/AIDS, gang members, and orphans.

“The youth bulge is happening and it is an enormous opportunity or an enormous challenge: how are all these young people going to have productive and valuable livelihoods and contribute to their communities?,” said Fiona Macauley, founder and president of US-based consulting firm working with entrepreneurs, Making Cents International. “Policy makers are only just realizing they need a change of perspective on health issues, issues of poverty, the education system – all of it needs to respond.”

Micro-entrepreneurship, where risk is low and the amount invested small, offers the most realistic route into business for youth in countries where more formal opportunities are absent. While concepts like micro-credit and social lending have taken off, youth have not received the attention they deserve, according to Macauley. She has also found financial services need to change to encourage youth to save, while also opening up to give them access to credit for micro-entrepreneurship.

To address this problem, Making Cents is organizing a Youth Microenterprise Conference on September 1-12, 2007 in Washington D.C. in order to start building the links and networks between groups working with youth businesses, and to build a global movement for youth economic development. It will tackle three themes: the role of youth, sector strategies, and building partnerships.

“It is important that entrepreneurship is mainstreamed into the school system,” continues Macauley. ”That youth are getting good skills the private sector are looking for: how to budget, costing and pricing, developing entrepreneurial mind sets, problem solving, leading groups, researching, how to be problem solvers. If we can get this into the high school and the elementary school level, imagine how different the workforce would be?”

Other initiatives that are focusing on youth entrepreneurship:

South African Breweries Limited has been providing seed capital to youth businesses run by 18 to 35 year olds through its KickStart program. Successful youth enterprises to come out of the program have included Golden Sunset Fresh Produce, started by 27-year-old Alwyn Jepha to help pay for his law school studies. Starting on a small scale producing vegetables and fruit, the business has grown substantially, making in a month what it once made in a year. The KickStart grant enabled Jepha to buy irrigation equipment and to scale up his operations. At Zanopt, Khetla Leqola has been producing afro-centric optical frame styles, meeting a market need not being met by the global brands. KickStart enabled Leqola to buy the equipment required to produce the frames and run his office.

The Barbados Youth Business Trust has an excellent web portal for youth, with practical tips on starting a youth business and good examples of young people actually doing it. At 29, youth entrepreneur Ailene Harrison-Malcolm found herself unemployed. She had long noticed the lack of clothing for full-bodied women in Barbados, and decided to open her own store, Full Elegance Boutique in 2002. She was able to tap into a mentoring scheme run by the government’s Youth Entrepreneurship Scheme toget a loan. It is this kind of joined up support that youth need.

By David South, Development Challenges, South-South Solutions

Published: May 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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