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E-Commerce Solutions

Solving the African shipping problem in eCommerce

“Your phone will be delivered between seven to 10 days,” read the email. And that was the start of my nightmare after I’d ordered from a local online shop.

In fact, the following weeks were a cat and mouse chase with the delivery guy, never getting my location and timing right.

This is the experience of many online shoppers in Africa, where the delivery of goods has not been well developed. If you are lucky you will get your goods within a day, but if not, it will be a long, tiring wait. There are no set standards in place.

The lack of a national street address system in most nations has also made it difficult for eCommerce to flourish and it continues to be a major obstacle.

Boozit.co.ke, an online commerce site for beverages, knows the challenges in this space all too well. The company delivers alcoholic and non-alcoholic drinks to its users in Nairobi. And has also inked deals with beverage companies including Carlsberg in Kenya.

It was founded by Kariuki Maina, Collins Okatch and Robin Kiama under their umbrella company, Savannah Internet Group (SIG Africa). “We are thinking of having our own logistics company,” Maina said.

“The dynamics of logistics are the biggest challenge to eCommerce,” added Okatch. “You need to have a clear cut margin on return on investments because you don’t want to have deliveries being very expensive to you.”

The company currently relies on selling volumes of their goods rather than delivering one beer bottle, which is not cost effective.

“But also our main challenge is when we are doing the night deliveries we need to set out good measures in terms of security,” Okatch continued, bringing into focus the danger in most African cities.

SIG Africa is currently working with a startup that aims to ease the pain of domestic goods delivery. Sendy, which has been described as ‘Uber for motorcycles’, aims to use the many riders across Kenya to deliver goods for eCommerce players.

Sendy’s application is similar to Uber’s interface where you can order a delivery from your phone.

Even so, the street address problem in Africa is a huge barrier to those trying to solve the delivery challenge. Without a proper address system in place, most buyers have to be in contact with the riders to get their goods safely delivered.

OKHi, a Kenyan company is looking to leverage technology to give everyone a digital address that can be used in eCommerce deliveries.

“We are very committed to making sure that an ambulance isn’t lost getting to you in an emergency. When you order food [we want to ensure] it gets to you while it’s hot and that you don’t have to give friends turn-by-turn directions when they are coming to your house,” the company testifies on its website.

Still in trial mode and perfecting the platform, there are also hints that Sendy could partner with OKHi to offer clients a comprehensive solution.

The need to solve this problem is critical. The explosion of eCommerce mid last year signalled an increase of parcel deliveries according to the Communication Authority of Kenya (CA).

“The number of courier items sent expanded substantially by 96.3% to reach 937,619 items up from 477,526 sent last in the quarter. During the 2013/14 financial year, courier traffic considerably grew by 72.8% to stand at 2.6 million items,” the authority reported.

“This growth could be attributed to the increasing uptake of eCommerce which has seen more Kenyans transact online and have goods delivered through courier services,” it said.

The Postal Corporation of Kenya (PCK) delivers parcels within two to three days and the delivery rate is between Ksh 235 to Ksh 525 (US$3 to US$6) for a range of 5kgs to 20kgs, within the country. Depending on what is being shipped the price can be reasonable or outrageous, but it is not the preferred method by most eCommerce outlets.

“I am not sure if they can handle the process efficiently. eCommerce needs a logistics provider that understands the online market,” Robin Kiama of Boozit said.

“Delivering alcohol products door-to-door is more efficient than using PCK because it’s more time effective and convenient to the customer. The business process is much more flexible when handling a logistics provider who understands the business process of eCommerce,” Kiama added.

There have also been questions around safely of parcels at the hand of PCK. For many years, there have been complaints of letters and parcels never making it to the desired recipient, making door deliveries more convenient and safe.

The big need for a reliable delivery system completely dedicated to eCommerce logistics will only grow with the increase in online buying across the continent.

“eCommerce will always grow because the internet space is there right now. The market is there and needs to understand that this is more convenient,” Okatch concluded.

But to achieve that, it really does need to be convenient.

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Vincent Matinde

Vincent Matinde is an international IT Journalist highlighting African innovations in the technology scene.

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