Examining the data-driven value chains that are changing Rwanda’s tea sector

Behind the material movement that takes tea from the slopes of Rwanda’s ‘thousand hills’ to a box on a shelf in Tesco, is a growing set of less visible digital data flows. Image by pasunejen.
Production of export commodity goods like tea, coffee and chocolate is an important contributor to economies in Africa. Producers sell their goods into international markets, with the final products being sold in supermarkets, here in the UK and throughout the world. So what role is new Internet connectivity playing in changing these sectors — which are often seen as slow to adopt new technologies? As part of our work examining the impacts of growing Internet connectivity and new digital ICTs in East Africa we explored uses of the Internet and ICTs in the tea sector in Rwanda.

Tea is a sector with well-established practices and relations in the region, so we were curious if ICT might be changing it. Of course, one cannot ignore the movements of material goods when you research the tea sector. Tea is Rwanda’s main export by value, and in 2012 it moved over 21,000 tonnes of tea, accruing around $56m in value. During our fieldwork we interviewed cooperatives in remote offices surrounded by tea plantations in the temperate Southern highlands, tea processors in noisy tea factories heavy with the overpowering smell of fermenting tea leaves, and tea buyers and sellers surrounded by corridors piled high with sacks of tea.

But behind the material movement that takes tea from the slopes of Rwanda’s ‘thousand hills’ to a box on a shelf in Tesco, is a growing set of less visible digital data flows. Whilst the adoption of digital technologies is not comprehensive in the Rwandan tea sector (with, for example, very low Internet use among tea growers), we did find growing use of the Internet and ICTs. More importantly, where they were present, digital flows of information (such as tea-batch tracking, logistics and sales prices) were increasingly important to the ability of firms to improve production and ultimately to increase their profit share from tea. We have termed this a ‘data-driven value chain’ to highlight that these new digital information flows are becoming as important as the flows of material goods.

So why is tea production becoming increasingly ‘data-driven’? We found two principal drivers at work. Firstly, production of commodities like tea has shifted to private ownership. In Rwanda, tea processing factories are no longer owned by the government (as they were a decade ago) but by private firms, including several multinational tea firms. Prices for buying and selling tea are also no longer fixed by the government, but depend on the market — flat rate prices stopped at the end of 2012. Data on everything from international prices, tea quality and logistics has become increasingly important as Rwandan tea firms look to be part of the global market, by better coordinating production and improving the prices of their tea. For instance, privately owned tea factories (often in remote locations) connect via satellite or microwave Internet links to head offices, and systems integration allows multi-national tea firms the ability to track and monitor production at the touch of a button.

Secondly, we need to understand new product innovation in the tea sector. In recent years new products have particularly revolved around growing demand in the retail market for differentiated products — such as ‘environmental’, fair trade or high quality teas — for which the consumer is willing to pay more. This relates most obviously to the activities in the fields and tea processors, but digital information is also crucial in order to allow for ‘traceability’ of tea. As this guarantees that tea batches have satisfied conditions around location, food safety, chemical use, fair labour (etc.) a key component of new product innovation is therefore data — because it is integral to firms’ abilities to prove their value-added production or methods.

The idea of agricultural value chains — of analysing agricultural production from the perspective of a fragmented network of interconnected firms — has become increasingly influential in strategies and policy making supported by large donors such as the World Bank and the International Fund for Agriculture Development (IFAD), an agency of the UN.

These value chain approaches explore the amount of economic ‘value’ that different actors in the supply chain are able to capture in production. For instance, Rwandan tea farmers are only able to capture very small proportions of the final retail prices — we estimate they are paid less than 6% of the cost of the eventual retail product, and only 22% of the cost of the raw tea that is sold to retailers. Value chain analysis has been popular for policy makers and donors in that it helps them to formulate policies to support how firms in countries like Rwanda improve their value through innovation, improving processes of production, or reaching new customers.

Yet, at the moment it appears that the types of analysis being done by policy makers and donors pay very little attention to the importance of digital data, and so they are presenting an unclear picture of the ways to improve — with a tendency to focus on material matters such as machinery or business models.

Our research particularly highlighted the importance of considering how to adapt digital data flows. The ways that digital information is codified, digitised and accessed can be exclusionary, reducing the ability for smaller actors in Rwanda to compete. For instance, we found that lack of access to clear information about prices, tea quality and wider market information means that smallholders, small processors and cooperatives may not compete as well as they could, or be missing on wider innovations in tea production.

While we have focused here only on tea production, our discussions with those working in other agricultural sectors — and in other countries — suggest that our observations have significance across other agricultural sectors. In agricultural production, strategy, policy and researchers mainly focus on the material elements of production — those which are more visible and quantifiable. However, we suggest that often underlying such actions is a growing layer of digital data activity. It is only through more coherent analysis of the role of digital technologies and data that we can better analyse production — and build appropriate policy and strategies to support commodity producers in sectors like Rwandan tea.

Read the full report: Foster, C., and Graham, M. (2015) Connectivity and the Tea Sector in Rwanda. Value Chains and Networks of Connectivity-Based Enterprises in Rwanda. Project Report, Oxford Internet Institute, University of Oxford.


Chris Foster is a researcher at the Oxford Internet Institute. His research focus is on technologies and innovation in developing and emerging markets, with a particular interest on how ICTs can support development of low income groups.

Why haven’t digital platforms transformed firms in developing countries? The Rwandan tourism sector explored

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Tourism is becoming an increasingly important contributor to Rwanda’s economy. Image of Homo sapiens and Gorilla beringei beringei meeting in Rwanda’s Volcanoes National Park by Andries3.

One of the great hopes for new Internet connectivity in the developing world is that it will allow those in developing countries who offer products and services to link to and profit from global customers. With the landing of undersea Internet infrastructure in East Africa, there have been hopes that as firms begin to use the Internet more extensively that improved links to markets will positively impact them.

Central to enabling new customer transactions is the emergence of platforms — digital services, websites and online exchanges — that allow more direct customer-producer interactions to occur. As part of our work exploring the impacts of growing internet connectivity and digital ICTs in East Africa, we wanted to explore how digital platforms were affecting Rwandan firms. Have Rwandan firms been able to access online platforms? What impact has access to these platforms had on firms?

Tourism is becoming an increasingly important contributor to Rwanda’s economy, with 3.1% direct contribution to GDP, and representing 7% of employment. Tourism is typically focused on affluent international tourists who come to explore the wildlife of the country, most notably as the most accessible location to see the mountain gorilla. Rwandan policy makers see tourism as a potential area for expansion, and new connectivity could be one key driver in making the country more accessible to customers.

Tourist service providers in Rwanda have a very high Internet adoption, and even the smallest hotel or tour agency is likely to have at least one mobile Internet-connected laptop. Many of the global platforms also have a presence in the region: online travel agents such as Expedia and Hotels.com work with Rwandan hotels, common social media used by tourists such as TripAdvisor and Facebook are also well-known, and firms have been encouraged by the government to integrate into payment platforms like Visa.

So, in the case of Rwandan tourism, Internet connectivity, Internet access and sector-wide platforms are certainly available for tourism firms. During our fieldwork, however (and to our surprise) we found adoption of digital tourism platforms to be low, and the impact on Rwandan tourism minimal. Why? This came down to three mismatches – essentially to do with integration, with fit, and with interactions.

Global tourism platforms offer the potential for Rwandan firms to seamlessly reach a wider range of potential tourists around the globe. However, we found that the requirements for integration into global platforms were often unclear for Rwandan firms, and there was a poor fit with the existing systems and skills. For example, hotels and lodges normally integrate into online travel agencies through integration of internal information systems, which track bookings and availability within hotels. However, in Rwanda, whilst a few larger hotels used booking systems, even the medium-sized hotels lacked internal booking systems, with booking based on custom Excel spreadsheets, or even paper diaries. When tourism firms attempted to integrate into online services they thus ran into problems, and only the large (international) hotel chains tended to be fully integrated.

Integration of East African tourism service providers into global platforms was also limited by the nature of the activities in the region. Global platforms have typically focused on providing facilities for online information, booking and payment for discrete tourism components — a hotel, a flight, a review of an attraction. However, in East Africa much international tourism is ‘packaged’, meaning a third-party (normally a tour operator) will build an itinerary and make all the bookings for customers. This means that online tourism platforms don’t provide a particularly good fit, either for tourists or Rwandan service providers. A tourist will not want the complication of booking a full itinerary online, and a small lodge that gets most of its bookings through tour operators will see little potential in integrating into a global online platform.

Interaction of Rwandan tourism service providers with online platforms is inevitably undertaken over digital networks, based on remote interactions, payments and information flows. This arms-length relationship often becomes problematic where the skills and ability of service providers are lower. For example, Rwandan tourism service providers often require additional information, help or even training on how best to use platforms which are frequently changing. In contexts where lower cost Internet can at times be inconsistent, and payment systems can be busy, having the ability to connect to local help and discuss issues is important. Yet, this is the very element that global platforms like online travel agents are often trying to remove.

So in general, we found that tourism platforms supported the large international hotels and resorts where systems and structures were already in place for seamless integration into platforms. Indeed, as the Rwandan government looks to expand the tourism sector (such as through new national parks and regional integration), there is a risk that the digital domain will support generic international chains entering the country — over the expansion of local firms.

There are potential ways forward, though. Ironically, the most successful online travel agency in Rwanda is one that has contracted a local firm in the capital Kigali to allow for ‘thicker’ interactions between Rwandan service providers and platform providers. There are also a number of South African and Kenyan online platforms in the early stages of development that are more attuned to the regional contexts of tourism (for example Safari Now, a dynamic Safari scheduling platform; Nights Bridge, an online platform for smaller hotels; and WETU, an itinerary sharing platform for service providers), and these may eventually offer a better solution for Rwandan tourism service providers.

We came to similar conclusions in the other sectors we examined as part of our research in East Africa (looking at tea production and Business Process Outsourcing) — that is, that use of online platforms faces limitations in the region. Even as firms find themselves able to access the Internet, the way these global platforms are designed presents a poor fit to the facilities, activities and needs of firms in developing countries. Indeed, in globalised sectors (such as tourism and business outsourcing) platforms can be actively exclusionary, aiding international firms entering developing countries over those local firms seeking to expand outwards.

For platform owners and developers focusing on such developing markets, the impacts of greater access to the Internet are therefore liable to come when platforms are able to balance between global reach and standards — while also being able to integrate some of the specific needs and contexts of developing countries.

Read the full report: Foster, C., and Graham, M. (2015) The Internet and Tourism in Rwanda. Value Chains and Networks of Connectivity-Based Enterprises in Rwanda. Project Report, Oxford Internet Institute, University of Oxford.


Chris Foster is a researcher at the Oxford Internet Institute. His research focus is on technologies and innovation in developing and emerging markets, with a particular interest on how ICTs can support development of low income groups.