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Why Airbnb Failed in Africa: Bongalo’s Bold Approach

Daniel Kim Views  

A new accommodation platform targeting the African market has emerged. It remains to be seen whether this startup can succeed in Africa, where even the global accommodation platform Airbnb has not firmly established itself.

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Bongalo, the accommodation platform established in 2019, aims to become the Airbnb of Africa. The founder from Cameroon, Nghombombong Minuifuong, has worked to create a platform that reflects Africa’s unique characteristics and differentiates itself from Airbnb. In an interview with CNN, he said, “My vision is to build a platform that … enhances travel across Africa by connecting people to affordable places to stay.”

Bongalo
Airbnb

Africa is considered the only continent where Airbnb has not made significant inroads. Since its launch in 2008, Airbnb has connected more than 6 million accommodations in over 200 countries. However, it has not achieved substantial success despite targeting the African market since the mid-2010s. According to 2018 statistics, approximately 130,000 Airbnb accommodations are registered in Africa. This is significantly lower than the over 80,000 accommodations registered in London alone. Moreover, most of these are concentrated in the South African region.

Bongalo has analyzed Airbnb’s failure in the African market and developed a differentiated strategy. They explain that the problem is not a lack of demand or supply for accommodation platforms in Africa. However, they pointed out that Airbnb’s payment system does not align with Africa’s financial infrastructure. In Africa, many areas lack internet accessibility, and a significant portion of the population does not have bank accounts, making online payments like those on Airbnb infeasible.

Unsplash
Unsplash

Bongalo has sought to overcome these issues by utilizing mobile money. Mobile money, a popular payment method in Africa, allows for monetary transactions without a bank account. Moreover, it can be used with 2G phones, not just smartphones, making it widely used in Africa. Bongalo’s guests and hosts can directly exchange money using mobile money.

Currently, Bongalo offers its services in Cameroon and Rwanda, boasting over 1,000 accommodations and more than 5,000 users in both countries. As travel in Africa becomes more accessible post-pandemic, the demand for accommodation services is expected to rise. The founder, Minuifuong, is working hard to expand Bongalo to other African regions such as Côte d’Ivoire and Kenya. His goal is for Bongalo to be used across the entire African continent. Recognizing the potential of Bongalo, Google invested approximately $320,000 through its Black Founders Fund in Africa initiative. Meanwhile, Airbnb has also started to allow mobile money payments, targeting the African market.

“Competing with Airbnb is very possible because we understand how the market operates,” he said.

Daniel Kim
content@viewusglobal.com

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