Delivery

African eComm Firm Taps Local Agents, Businesses To Streamline Logistics 

African eComm Firm Aims To Streamline Logistics

Of Africa’s one billion-plus population, some 400 million use the internet, putting the continent among the most digitally connected populations worldwide. Yet, the lack of an address system in most cities can make logistics an expensive nightmare.

The two main eCommerce players are Copia (which has faster delivery) and Jumia (which has more market share. Both have been helped by the increase in logistics companies across the continent. Other online marketplaces include Sky.Garden, Kilimall, MallforAfrica, My Big Order, Masoko, Ubuy, Shopit, Cheki, MamaMikes and Electro Hub.

Copia caters to a little more than one-fifth of Kenya’s rural population, Bloomberg reported on Sunday (March 1). Tim Steel, its CEO, points to Africa’s 750 million mid- and low-income consumers- who spend $680 billion a year – as its main target market.

“The biggest problem of Africa is always the logistics,” said Christophe Meunier, a partner at telecommunications advisory firm Delta Partners. “It is likely to take time and financial resources to be able to build those routes that are under-served and not well-established at scale.”

Steel has started expanding into Uganda, Rwanda and Tanzania; he anticipates having 18,000 agents within 18 months and expects that Copia will be profitable within two years.

“We are able to deliver a package at one-sixth of the price of any other best-in-class eCommerce business in the world,” Steel said. “We aggregate multiple orders, rather than having a one-on-one delivery system that prices a lot of customers out.”

Jumia, which was founded by two Frenchmen in 2012, operates in 11 African countries, from Morocco to Nigeria and Kenya, and has been referred to as Africa’s version of Amazon. In 2016, the startup became Africa’s first unicorn, and in April 2019, its stock opened on the New York Stock Exchange (NYSE) at $14.50. The stock has since slumped 71 percent since the IPO.

Copia makes free deliveries to remote areas of Kenya in roughly 48 hours at no extra cost. The startup has hired about 6,000 local delivery agents and taps local businesses to serve as central hubs.

By way of example, in the three years that general store owner Samuel Kihara has been a Copia agent, revenue at his shop has increased fivefold. He was able to open a second shop, buy land and a truck, and send his children to private school. “The commission I earn as a Copia agent has been my working capital,” said Kihara, 48. His small shop is in Kawaida, a village about 14 miles north of Kenya’s capital, Nairobi. “All this has been possible due to money from the business.”

Copia was founded in 2013 by American social entrepreneurs Tracey Turner and Jonathan Lewis. Although the company is still operating at a loss, its sales are growing at a rate of 15 percent a month in Kenya.

DHL said in May that it is expanding its eCommerce platform into nine additional African markets, bringing its total reach to 20 African countries.

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