Glovo in Kenya has built a network of local producers to promote the made in Kenya products on its platform – Photo courtesy of Glovo – RR
Analysis: while the example of Jumia reveals the difficulty of achieving the same profitability of their model, the future of these delivery platforms is very much at stake in their “local” dimension. Do they help promote Made in Africa products? That’s what is at stake. Part three (final).
While platforms such as Glovo have allowed some local producers, primarily supermarkets, to maintain their business despite the restrictions, the closure of restaurants or curfews in place, for example, have not allowed the development of food delivery and offer a real alternative to restaurants.
Consequently, a question arises as to whether these platforms contribute to the promotion of made in Africa products, or, conversely, by offering mostly imported products, do they bring them new competition? Priscilla MUHIU, General Manager of Glovo Kenya is adamant that Glovo works with local producers. “In Kenya, for example, we have integrated typical local restaurants, rather than big chains like KFC, Burger King, Pizza Hut, etc. Local businesses as well. If you go to the application, you will see what you call Kibanda Xpress, which means a small shop where we aggregate all these small producers into that brand and then we support them in campaigns, by helping promote their orders. We have given them a brand identity called Kibanda Xpress. We are doing the same with MamaBoga Express. It means a small shack selling vegetables, small stores selling vegetables. We aggregated all of them. If customers place orders in a MamaBoga Xpress, they will be matched with the closest MamaBoga to them. We also work with artisans, we have Maasai Market on the application. You are able to order artifacts, jewelry made by local traders.”
Promotion of Made in Africa products or unfair competition?
The experience of Jumia, which is struggling to achieve profitability despite its dazzling start, shows that the future of these platforms lies in promoting Made in Africa products. In order to survive and stand out in a highly competitive sector, these platforms will have to integrate local producers and provide alternatives to the logistical problems they encounter, allowing them to access not only the local market but also to enter new regional and international markets. Gounou MOUTAWAKILOU, founder of the young but ambitious brand of spreads and other related 100% made in Benin products, expects no less.
“Indeed, we have seen a certain change in the market logic, and not only because of the health crisis”, says Gounou MOUTAWAKILOU, founder of Gounou. “At Gounou, we had anticipated this since 2017. The environment is changing, due to professional, sociological factors… Before, the market logic was that the consumer goes to see the offer and then buys it. For a while now, this has started to change. Consumers have new needs and now want to receive their products rather than to go and buy them. The health crisis has generalized this trend. So, for players like us, there is either the opportunity to work with these platforms or to develop an in-house delivery service.”
“It is easier and cheaper to deliver from EU countries to the USA or Asia than to African countries”
The young entrepreneur initially chose the first option. It was a disappointing experience. “Some came to us, we agreed to test with one of these platforms whose offer seemed most relevant, but their service did not live up to the promises. For example, they have a platform on which consumers can order online, with a guarantee of delivery in two hours maximum. However, very quickly, our customers complained about the delivery time and the cost, which was advertised at 500 FCFA maximum but could reach 2000 FCFA. And, when the customer complains about the service, it is with us and, in the end, it is our brand that is harmed. Despite several reminders to correct the deficiencies, the structure did not follow up, so we stopped the idea of being delivered. We continue to distribute our products with partners, supermarkets in particular, while waiting to find better alternatives or if we believe that the need is important and profitable, we will develop an in-house solution.”
Meanwhile, the entrepreneur points out, it is easier for him to deliver his products outside the continent. “It is indeed a paradox. By working with an international transport company that is starting to do “door to door” delivery and allows us to serve certain markets internationally, it is easier and cheaper to deliver to EU countries or the USA and Asia than to African countries.” The local and regional market remains the challenge. And, according to the entrepreneur, the existing delivery platforms have not yet met the expectations of local producers in this area.
“These platforms prefer to import made in China products and distribute them locally rather than working with local producers”
“The problem with these platforms is that they have no vision as to working with African actors. When we talk to them, we realize that there is a problem, incomprehensible for us, because they prefer to import made in China products and distribute them locally rather than work with producers like us. The problem does not only come from them. Overall, actors on the ground lack professionalism and real structure for local management, even if some are making huge efforts to meet standards and have qualified services.”
Also, the entry into force of the African Free Continental Trade Area, AfCFTA, is of much interest. “Even if I remain doubtful about the implementation of agreements. For example, in the WAEMU area, which remains the best area in terms of integration, if people travel normally, it is not yet the case for goods. When you cross Cotonou-Lomé, less than 80 km, you have to pay at least 300 FCFA in taxes per unit. This is more than 50% of the cost of production! If our leaders apply free trade agreements, this will really facilitate intra-African trade.”And attract more investment in delivery platforms, in other words more services and market opportunities for local producers…
Source: Author: Digital Africa | www. resilient.digital-africa.co