Internationalization Challenges of Sharing Economy Firms: An Emerging African Markets Perspective

Abstract: There has been an increase in research on the internationalization of sharing economy firms. However most of this research has largely focused on mature markets. Very little attention has been given to the internationalization of sharing economy firms in emerging markets particularly those from Africa. The African continent is different from mature markets and the internationalization challenges of sharing economy firms are therefore dissimilar.  This study seeks to fill the existing knowledge gap by exploring the internationalization challenges faced by sharing economy firms from an emerging African market perspective. We also seek to understand the internationalization process of African sharing economy firms. Finally we seek to provide solutions on how African sharing economy firms can manage the challenges they face. This research was conducted using qualitative case studies of eight companies. Two have internationalized within and beyond Africa. Four have internationalized within Africa while two are yet to internationalize. Semi-structured interviews were conducted with founders and operations managers of the different sharing economy firms.  The empirical findings show that African sharecoms can internationalize in a unique internationalization sequence, which starts with gradual internationalization to a “foreign gateway market” followed by rapid internationalization to other foreign markets. The study identified funding as the greatest challenge faced by African sharing economy firms while low adoption rates and mindset were the dominant psychic distance obstacles. The study also revealed that in Africa, technology is solely not enough by itself and extra effort needs to be undertaken to ensure successful internationalization of sharing economy firms. The research concluded that regulatory challenges are industry-specific rather than targeting sharing economy firms. Further, networks were an important combining factor facilitating the internationalization process and overcoming some challenges.