Newsletter 2021/04

  1. Favo’s community group buying platform in Latin America

What is Favo? It is a community group buying platform focused on micro-locations that enables participants to make purchases through social media. By registering as a seller on Favo’s platform, partners or community leaders have access to a personalised online store that offers a product catalogue comprising 2,000 retail items.The startup aims to change the way Latin Americans shop for consumer goods and simplify logistics and delivery services. The company was founded in Peru and expanded to Brazil — servicing 3,000 partners in the two countries.

Role of the community leader: The community leader is central to the success of the model and responsible for promoting their site, receiving the goods, and fulfilling last-mile delivery services or providing a pick-up point for goods. Community leaders set up a WhatsApp group or Facebook page, and share links with their network. Community leaders could be stay-at-home moms or local neighbourhood stores, who act as influencers and community marketers and earn a commission. Community leaders could earn between 500 Peruvian Sol ($135) and 1,000 Sol ($270), depending on their sales.

Community platforms in China: Community platforms have been very successful in China, and research by eMarketer/Insider Intelligence indicates that sales for his business model could reach $363 billion in 2021 in China, an increase of 36% over the previous year. Sales on social commerce platforms account for 13% of total ecommerce sales in the country. Pinduoduo is the third-largest ecommerce player in China behind Alibaba and JD.com, and is growing faster than its major rivals. Average monthly active users rose to 643 million in 2020, according to Bloomberg. Shihuituan is another Chinese company that is tapping into the success of social ecommerce or group buying. Like Pinduoduo, Shihuituan sells consumer goods such as fresh fruits, vegetables, and packaged goods — targeting lower-tier Chinese cities with less competition.

2. Amazon to expand financial services to kirana stores in India

Amazon pay &  kirana stores: Amazon Pay, an online payments processing service owned by Amazon, is planning to provide financial services such as loans and insurance to India’s kirana shops or mom-and-pop groceries. Amazon plans to service about a million offline retailers under its Local Shops programme.

Connect to ecommerce: The loan facility of Amazon Pay will not only provide financial services but also connect kirana stores to Amazon’s e-commerce network.

Areas of focus: Amazon Pay aims to digitise payments and scale its credit offering. The company later plans to expand their services to the customers on the programme.

3. Other news

Copia model in Kenya: HWMiiA reports on Copia Global’s ecommerce model tailored for low- and middle-income consumers in Kenya, working through a network of over 30,000 third-party agents or informal retailers such as hairdressers or mom-and-pop shops.

Digital transportation in Nigeria: The BBC reports (video) on how delivering cargo in Nigeria requires a lot of patience, as on-time is uncertain. It looks at how digital startup Kobo360 is revolutionising cargo delivery, linking everyone in the delivery supply chain, from the cargo owners, to the drivers and the recipients.

Freight hijacking in South Africa: An unprecedented surge in freight rates in South Africa is putting many companies under enormous pressure. In South Africa, the number of reported truck hijackings has increased by 32 per cent. According to Statista Research Department, 1,202 truck hijackings occurred between April 2019 and March 2020, often ending with violent attacks on drivers.

Funding: KitaBeli, an Indonesian social commerce app for group buying, announced that it has raised a $10 million Series A. The round was led by Go Ventures, with participation from returning investors AC Ventures and East Ventures.

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