BY VICTOR ADAR
Everyone reaches a point in their profession where the best thing to do is to branch out. It is seemingly not easy to see it coming but one Peter Ndiang’ui made the most out of a similar transition. Arguing that you don’t need to step back from an idea whose time has come, his was a big gamble. He started off as a tech and strategy consultant in Australia mainly focussed on media, financial services, telcoms and energy.
At the tail end of his consulting career Mr Ndiang’ui got more involved in formulating growth strategies for organizations that were experiencing digital disruption at the advent of the internet, from media houses to banks. This experience shaped his next move where he would step out of employment and go ahead to find online classifieds businesses focussed on real estate and jobs.
Later, he joined the Naspers Group, the investor behind OLX globally where he was the general manager and Sub-Sahara Africa expansion lead for about six years tasked with building the business from scratch in a number of African markets. The beauty of this growth came when he teamed up with a former Amazon head of product. And that is how GoBEBA, an on demand ecommerce logistics business that is focussed on everyday consumer goods like cooking gas and groceries was born in October 2018.
“The journey to digitize consumer goods distribution in Africa has just started,” he says. “This was manifested in our lives as co-founders where a shopping run can take you over 2 hours as you pierce through near standstill traffic and long queues in supermarkets. We wanted to find a way to solve this to give back some hours to consumers while improving distribution efficiency,” he says, adding that the high growth company aims at helping customers discover essential products, purchase them and get them delivered in less than an hour.
Initially, there was distinction of pure play e-commerce and brick and mortar retail distribution. As retail goes through this transformation, these lines will blurr in what Jack Ma likes to call “New Retail”, a new way of distributing consumer goods at scale powered by various digital technologies from GPS-based smartphones to drones, artificial intelligence to voice search, and even through block chain.
Ndiang’ui is behind a company whose place as a key player in this ecosystem’s journey has just began with a toehold of on-demand delivery of a few key frequently used items like cooking gas and groceries. At the moment, the firm’s target market is largely consumers and vendors looking for convenience and efficiency within urban settings. He says: “In the next two years we will be expanding our digital footprint across a number of cities in Kenya and a selection of a few sub-Sahara Africa cities.”
With the firm’s customer acquisition channels ranging from online to offline, depending on the cost of acquisition and how it compares to the long term value of each customer who is acquired, it seems business is booming. But every winner has scars. And nothing comes easy too.
“We experience a couple of hurdles largely related to logistics such as the location of the customer, expensive payment mediation and training of our crowd sourced logistics partners but they are not challenges that cannot be solved,” he says.
In Sub-Saharan Africa as a whole, the consumer spend sits at about $2 trillion. A significant chunk of this goes to the basics. At the same time, around 40 % of consumer spend is in food and beverages. Yet distributing these goods has been a significant challenge for both consumers and vendors. It is also because of these gaps that for the over 10 years that Ndiang’ui has been winging it, he has been able to study the market trends – between him and the co-founder of GoBEBA (a former Amazon head of product) they have about 30 years combined in tech and e-commerce.
People abreast with online business, for example, say that there is a silver lining so much that if you are yet to join the online business arena, you don’t know what you are missing. Firstly, the urbanization rate of most of the African economies has been way faster than their urban infrastructure growth rate leading to crowded cities and highly trafficked urban centres.
Next to this, the retail is still largely informal and fragmented making the discovery of goods by customers as well as their distribution by manufacturers and distributors significantly challenging. This is probably why Mr Ndiang’ui is betting that the e-commerce and tech industry is still hot, arguing that on demand sector is not a fad but a fundamental shift in how delivery and convenience works especially in a tough time.
With fairly good background, he admits that the high growth firm serves thousands of active customers.
“We have gone from a handful of customers to thousands of active customers in a month… We have at least 50 people who regularly depend on us directly as logistics partners but we have a host of other indirect impact as vendors grow their businesses,” he says.