July Newsletter 2020/02

  1. Yebo Fresh: Township delivery is revving up

Yebo Fresh is a food delivery startup servicing Cape Town township customers. The company started with fresh produce, but has since expanded its product range to meat, fish and general groceries. Goods can be ordered on WhatsApp, online, or by phone with a call-back service.

Local knowledge: Delivery teams have local knowledge of the communities that they serve, speak the language, and are familiar with the area. Street signs are often lacking, and they frequently have to communicate via mobile phone for directions to the delivery point.

Increased demand: Yebo Fresh’s deliveries have grown significantly since the South African lockdown due to Covid-19. Social distancing requirements have increased the wait time at local spaza shops or groceries, and many township residents in Cape Town have been unable to travel to local shopping malls to stock up on supplies. Townships consumers often complain about higher prices at spaza shops, and the need to travel long distances for lower-priced goods.

Care packages: The company has seen a shift away from household focused purchases, to customers buying care packages and hampers for family members and employees.

Traditional trade: Traditional trade is estimated to contribute around 35% to 40% of total grocery sales in South Africa, with 50% of South Africa’s urban population living in townships.

2. Twiga Foods – solving Africa’s fragmented agriculture markets with technology

The business-to-business (B2B) ecommerce startup aggregates vendors’ demand — saving them a trip to the market by delivering produce to their doorstep.

The middleman challenge: Africa’s agricultural supply chain is highly fragmented, and the market is disorganised. Agriculture fresh produce passes through many intermediaries before it reaches the market. It is often the intermediary brokers that are the largest beneficiaries, and not the farmers. Brokers are often unwilling to trade with farmers during periods of supply surplus.

Optimised delivery: Twiga provides free delivery within 24 hours. It uses a geographic information system (GIS) and an AI-enabled distribution platform to deliver to vendors. The platform takes into consideration road conditions and network design to maximise delivery efficiency.

Partnership: The startup has partnered with ecommerce retailer Jumia in Kenya, and launched the Twiga Fresh Bundle on Jumia’s platform. Vegetables and non-perishable items are priced around 50% cheaper than a comparable basket at supermarkets.

Buying power: Twiga is the largest buyer of fresh produce in Kenya, servicing over 4,000 farmers and 35,000 Mama mbogas or vegetable traders, and shopkeepers.

3. South African municipalities: The power to create new street trading sites

Leif Petersen from the Sustainable Livelihoods Foundation, writes that municipalities have the power to establish new street trading sites in each middle-class suburb in South Africa — creating thousands of new business opportunities for informal businesses and street hawkers.

Shopping malls: South Africa has an estimated 2,000 shopping malls and has the potential to accommodate at least five informal traders within each mall — adding 10,000 secure and viable trading locations.

Integration: Not all suburban shopping needs to take place in modern trade outlets. By integrating fruit, vegetable, and grocery traders into suburbs and malls, municipalities could create a more inclusive society and help establish new business connections between traders and middle-class shoppers.

4. Other News

Mexico Tienditas: Mexico’s National Chambers of Commerce, Services and Tourism ( Concanaco Servytur) and the National Association of Department Stores (Antad) announced the launch of a new B2B tech platform called Mándamelo, targeting the country’s numerous tienditas or small groceries. The platform works through WhatsApp and Messenger chats.

Mexico e-payments: New research indicates that commission fees and “sharing a cut” of each sale, are major barriers for shop owners considering to adopt e-payments in tenditas or small groceries.

Rwanda: Sokowatch’s Patrick Musana writes how technology can play an important part in Rwanda during Covid-19 — with the distribution of e-vouchers to low-income families and redeeming it at local grocery shops.

India: Flipkart has launched a hyperlocal delivery service in Bengaluru. Hyperlocal delivery is a distribution model that uses kirana or local groceries and supermarkets as collection points. The Covid-19 pandemic has led to increased collaboration between online and offline retailers.

Vietnam’s cử a hàng tạp hóa: Telio is a Vietnamese ecommerce B2B startup that connects micro-retailers with brands and distributors on a centralised platform.

Township-mapping: South African mapping startup Eneodata, provides location intelligence data to fast-moving consumer goods (FMCG) — helping them to better service informal markets. Current maps such as Google, are built around search business models, and cover townships, peri-urban and rural locations poorly.

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