London — Going
into the vacuum left by Jumia's pull-out in 2019, inalipa has over a
short period built up both a B2C and B2B customer base in Dar es Salaam
and has ambitions to roll-out into other Tanzanian cities. Russell Southwood looks at whether a local contender can crack the difficult nut of African e-commerce.
Inalipa's launch had two roots. Firstly, the founders run a digital agency called AIMS and deal with
large consumer brands who were always looking for more effective ways to get to market. Secondly, Tanzania has many Instapreneurs who use the Instagram and WhatsApp platforms to hook up with customers to sell mainly imported brands:"Initially the idea was to cater to these micro vendors. That was going to be the original market."When the first wave of the Covid-19 crisis came along, things pivoted and the launch date was accelerated to 21 April 2020:"Suddenly a number of consumers were worried about where they were going to get their goods from and suppliers didn't know how to get to consumers. So we shifted to focus on large-scale suppliers, manufacturers and importers."
It had two types of business model in mind: the megastore with everything supplied end-to-end with its own warehouses and fleet and a Partners Store, where it would only handle payment and delivery, similar to Amazon's marketplace:"The Partner Store was for those who had inventory that was so diverse it would be impossible to warehouse. We picked up quite a number of these suppliers."
It has 90 suppliers, 5000 product SKUs (Stock Keeping Units), 3000 of which it warehouses. The B2C volume products are groceries (meat, poultry, fruit and vegetables, household essentials and cleaning products. The high-value B2C products are sometimes very niche, hardware products like power tools, toys and baby-related items like diapers, infant formula and pacifiers.
Its own fleet consists of a number of 2 and 3 wheeler bikes and a 2-ton truck for really large pick-ups and dekliveries:"The reason that we have our own fleet is that a number of e-commerce players in the market have a big reliance on third party logistics. This poses three challenges. Firstly, it's very difficult to control QoS and SLAs; secondly, we want get our model right first and it involves multi-stop route-planning and pickups; thirdly, it takes larger up-front capital but we can keep delivery costs down. We don't charge for delivery."
Payment is cash on the doorstep, Visa/Mastercard or mobile money: it has direct integrations for credit cards and mobile money:"Initially we didn't take cash on delivery but we launched it in July and it's 50% of our orders with the balance split between credit cards and mobile money. The majority of the latter is M-Pesa. There's been no fraud. Once in a while when you deliver a cash on delivery order, there's no-one there.
In October, after talking to suppliers about their major challenges, it decided to add B2B to its offer, delivering to places like Dukas, bars and restaurants:"The businesses can make their own orders online and we have sales reps. Early this year we rolled out Version 2, with an enhanced user experience with improved product discovery. It's also now on IoS and Android and has been continuously growing month-on-month. B2B is now the largest segment, 3:1 against B2C but the latter has the greatest margins." On the B2C side it has been taking 1,200 orders a month and each customer makes about 1.5 orders a month and monthly growth is 15-20%.
On the B2B side it was initially alcohol only and it created a GPS mapping of all the outlets: 800 in Dar es Salaam. It is able to make daily deliveries, something appreciated by small outlets that often lack the capital to hold large amounts of stock:"Dar is a tier one city and within our growth plan we want to add three additional cities by the end of 2022."
Jumia pulled out of Tanzania in December 2019 and a number of players emerged in the vacuum it left behind:"A lot of them are focused on takeaway food delivery and we do not operate in that space but most of these players have added other products." These competitors include Duka Direct (operated by local payments aggregator Selcom) and Pika (launched by a former Jumia manager).
Its B2C deliveries have thrown up some interesting anomalies. A beer like Budweiser is seen as a premium product and usually only distributed. in premium neighborhoods:"Products typically seen as premium are not just being purchased in premium neighborhoods."
It has its own back-office call centre that follows up on orders that are not completed:"When you call, you increase their trust in the system. Before they were worried about whether it was a real business. 7 out of ten convert to becoming customers.
In Brief
Angola: Africell will launch as the fourth mobile operator later this year. It has said that it would invest 'several hundred million dollars' in infrastructure and services during the first phase of the project, estimating that it will create 6,500 jobs in the next five years. Meanwhile the privatization of TV Cabo, Multitel and Net One are scheduled for privatization by June of this year.
Ukheshe, a digital fintech platform provider, has announced the appointment of Prins Mhlanga, CEO of Ocean on 76 Group, as a non-executive director. Since launching two years ago, Ukheshe has established itself as a leading payment technology specialist successfully collaborating with several blue-chip payment brands. One of those agreements with KCB Bank Kenya will sponsor Ukheshe's Bank Identification Number (BIN) number, which will allow Ukheshe to immediately issue both physical and virtual cards across East Africa where KCB has an extensive footprint.
South Africa: MTN is challenging ICASA's decision to implement an auction structure that creates two categories of mobile operators, namely Tier 1 and Tier 2, and the use of an opt-in auction round in which Tier 1 operators will not be allowed to participate.
The pressures on the collapsing mobile market in Ghana continues. Telegeography reports that Vodafone is looking at all options for the business, including selling its 70% stake to Vodacom. Meanwhile in a desk-cleaning moment, MTN Ghana has received the go-ahead from the Securities and Exchange Commission (SEC) to buy back over one million shares from applicants who failed to provide sufficient personal information to complete their Know Your Customer (KYC) requirements under the company's IPO in 2018, reports Ghana Business News. In a statement, MTN said such applicants would receive a refund at the original IPO price of GHS0.75 (USD0.13) per share, as well as any dividends accrued since the listing. Applicants who did not provide sufficient KYC information have been requested to check the status of their account to update their records and upload a copy of their valid ID card before 23 February 2021.
Pula, a Pan-African insurtech startup specializing in derisking millions of smallholder farmers across the continent, has today announced a $6mn Series A fundraise led by TLcom Capital with participation from Women's World Banking. After impacting more than 4.3mn farmers across its existing 13 African markets (which include Kenya, Nigeria, Rwanda & Uganda), Pula is set to break into new territory with an expansion into Asia, which would make them one of the few African tech startups operating on the continent.
South Africa: As part of its ongoing commitment to prevent Gender-Based Violence (GBV), Vodacom has zero-rated its Bright Sky SA app, which was launched in November last year. This ensures that Vodacom users will not incur any data costs when downloading the app or accessing many of the referral links to GBV support services found in the app.
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