Ethiopian-American entrepreneur Abai Schulze spent her formative years in an orphanage in Addis Ababa before being adopted at age 11 by an American family. During her schooling in the US, she travelled back to Ethiopia for summer holidays to volunteer in hospitals and orphanages.
These trips enabled her to reconnect culturally with Ethiopia and to witness the economic transformation taking place. Although she hoped to return some day, Schulze planned to first further her studies and build her career in the US. But in 2013, aged 24, she moved to Addis Ababa to start ZAAF, a company that produces handcrafted luxury leather handbags and accessories.
“I don’t think business school was going to teach me how to run a business in Ethiopia. You don’t go by the book when you are running a business here. You just have to jump into it and learn as you go.”
After graduating with a degree in economics and fine arts, she worked with a government agency and then Ashoka, an NGO that promotes social entrepreneurship. It is while there she interacted with many entrepreneurs and got the inspiration to start her own business.
“I was behind the scenes pushing paper and I realised I wanted to be them,” says Schulze. “The buzz is happening right now in Ethiopia, and I aimed to tap into it as fast as I could.”
ZAAF, which means “tree” in the Amharic language, produces high-end leather items such as laptop cases, handbags and weekender luggage.
The bags are sold online via the ZAAF website and in select stores in Austria, the UK and the US. Although mostly sold abroad, local consumers include Ethiopia’s rich and middle class, and the expat and diplomatic community in Addis Ababa.
“We want to make ZAAF a gift shopping destination. If you have a guest and you really want to show them what Ethiopia can do, you buy them a ZAAF bag,” explains Schulze.
ZAAF now plans to open a showroom in Addis Ababa to cater to growing demand.
“We receive numerous emails from people visiting from abroad asking if we have a showroom in Addis Ababa. Even here there is a certain class willing to buy quality, locally-made products instead of flying to London to buy Gucci. It is quite encouraging,” she says.
Big potential in manufacturing
Growing up Schulze always had an interest in creative arts. For her thesis, she wrote about Ethiopia’s potential to be a destination for textile and garments factories. Because large-scale manufacturing is capital intensive, she decided to go into production of bags.
“I was never really into bags. But I always wanted to be in the manufacturing sector. Ethiopia has an advantage in terms of abundant raw material, plenty of manpower and there was a gap in the production of bags. There are a lot of factories that produce shoes, mens’ shoes in fact, but very few produce bags,” she says.
Although she has encountered the typical challenges entrepreneurs face everywhere else, Schulze says doing business in Ethiopia comes with some unique hurdles such as accessing foreign currency – which is always in shortage – and adapting to the country’s different work ethic.
“We also face difficulties importing zippers, and that affects our delivery time. Although a very small detail, they make a big difference in the product.”
Personal relationships are crucial
She says that breaking into the market required investment of time and money, and a willingness to learn. In the early days, Schulze had to make calls, visit tanneries and cement personal relationships with other stakeholders in the industry.
She notes that business and friendships go hand in hand, and that failure to connect with other stakeholders can be costly.
“Business here is very much relationship-based. You have to be genuine in ways you work with people and create win-win situations. The way you work with people is so important that if it isn’t good the whole thing will blow up. You have to prioritise whatever they value.
“In the early days it is best to meet people in the sector you are joining, because at that point anyone you meet is way better than you. You never know if they are useful or not, but you just go for it and learn as much as you can.”