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Narrator: In February 2018, while serving as the chief operating officer of a Lagos-based tech startup, Adeshina Adewunmi found that he struggled to maintain a work-life balance.
Adeshina Adewunmi: “My wife was actually ill and basically, I had to do all the grocery shopping. I had to also combine leading a tech startup.”
Narrator: To ease the pressure, Adeshina went in search of online grocery delivery platforms but, according to him, he couldn’t find any that could deliver to his part of Lagos within the same day.
Amidst all this, Adeshina observed the turbulence within the Nigerian eCommerce industry at the time. Most notably, Naspers, one of the most active tech investors in Africa, announced exiting Konga and OLX, its 2 biggest eCommerce plays in Nigeria, within the space of 3 days. None of the exits were under favourable conditions.
This got Adeshina thinking about the obstacles preventing eCommerce from taking off in Nigeria
Adeshina Adewunmi: “I started researching, alongside a few friends, to say ‘what can we do differently’? You know, Africa is very unique, copy and paste doesn’t work. You need to look at what works then readapt that model to fit our economy”
Narrator: On this episode of Built in Africa, we spotlight how Lagos-based eCommerce startup, One Kiosk Africa, is exploring the hyperlocal model to achieve sustainability in a struggling market.
In the course of his research, Adeshina examined how foreign companies, like US-based Instacart, operate a hyperlocal grocery delivery and pick-up service in over 5,000 cities.
Adeshina Adewunmi: “I stumbled on Instacart, stumbled on Cornershop, stumbled on some other few platforms and I said, ‘this is it’”
Narrator: Adeshina’s certainty stemmed from his previous experience running something similar, albeit unstructured, about 2 years earlier.
Adeshina Adewunmi: “Far back in 2016, I decided to leave the financial sector, whereby I was working with Stanbic IBTC, to start up and to pursue my passion which is business. I started out Home Tutors Nigeria and I was privileged to always visit some of our clients in the popular Eko Market. As you know, Eko Market is one of the biggest, busiest markets in Lagos.
Everytime I go in there, I see the opportunities. I see how people exchange value for money and I decided, ‘why don’t we leverage on existing platforms to help them scale more?’”
Narrator: He went around stores in the market, and began taking and uploading photos of on-demand items on online classifieds platforms like OLX and Jiji
Adeshina Adewunmi: “I saw that averagely, in a week, I was making at least… you know, in sales volume… I was doing close to about ₦300,000 averagely”.
Narrator: That was in 2016. Three years later, in 2019, One Kiosk Africa was registered. Using a one-page site with Google Forms to gauge user feedback, the company launched its pilot, offering the stores the option to connect with buyers locally.
Adeshina Adewunmi: “And viola! With just food in the initial stage, we saw how the numbers rose and then we knew that, yes, it’s time to expand and to build on this niche market
Narrator: The value proposition? Hyperlocal proxy-shopping for busy people, with promised same-day delivery within 59 minutes.
Narrator: So how does One Kiosk Africa deliver on its promise?
Adeshina Adewunmi: “We programmed our system, especially if you are using the neighbourhood shopping flow on our web app, to be able to time the whole flow. So, if you place an order, it is expected that the merchant that you are placing an order from actually accepts your order within 10 minutes.
This translates even up to the time that this stuff is picked up, and then it trickles down to the average time that it takes to deliver this to you. And because obviously we have trusted logistics partners, who are very efficient, averagely they do between 30 minutes to a cap of about 45 minutes, anywhere across Lagos, which is like where we started from in that sense.“
Narrator: In places like Ikeja, Lagos’ capital city, the eCommerce startup delivers products from popular stores like SPAR and ShopRite. However, its main focus is on the informal Brick and Mortar stores in these vicinities.
Food and grocery items top the list of One Kiosk Africa’s hyperlocal delivery. For the latter, cases exist where the items a customer wants are not accessible in grocery stores within that locality. To address this, they designed a ‘market list’ feature.
Adeshina Adewunmi: “We have a market list via our Web App platform whereby you could just submit a list of all your groceries. We have a lot of top leaders who constantly use this platform for this because they trust us, obviously, to deliver.”
Narrator: Adeshina affirms that based on a survey the startup recently carried out, the market list service has saved users about 25% of their monthly spend, compared to if they went to the market themselves. In addition, over 4,000 paying users in Lagos make use of the hyperlocal shopping and market list services. According to Adeshina, the merchants listed on One Kiosk Africa exceed 14,000.
One Kiosk Africa runs a commission-based model with said merchants. For hyperlocal shopping, it earns 10% on any product ordered while collecting an average transaction fee of ₦2,750.00, about $7, for market list items.
Aware that the commission model might not suffice, the startup has plans to introduce a subscription model for merchants who wish to appear atop every region where they have a store.
With its current business model, One Kiosk has raked in over $200,000 in transactional value since July 2019. Additionally, Adeshina says when the startup ended its pilot phase in December, it declared a $3,000 profit before tax. This, he emphasises, is despite playing in an inherently loss-making market
Adeshina Adewunmi: “One of our unique selling points is the fact that we operate a zero-inventory eCommerce model. Everybody will agree with me, especially those that are very familiar with the eCommerce space, that logistics around warehousing, inventory management in terms of having personal stock, is one of those things that cause overhead. It is very cumbersome, especially whereby we do not even have adequate infrastructure to build or bridge that gap, here in Africa.
So basically, for us, we have told ourselves it’s going to be totally a zero-inventory model.”
Narrator: Like most startups, One Kiosk Africa started out self-funded. Not long after its pilot phase, it secured an angel investment from Niche Capital and Aptive Capital, a US-based VC firm where Adeshina is a partner.
According to him, there are plans to secure a funding round which will help scale across Lagos.
Just as important as funding in a startup’s journey is finding the right talent; one area the startup has found challenging.
Adeshina Adewunmi: “Getting extra-skilled tech hands to join our team in the initial phase was a bit tough, especially because we were very lean. So it was a bit of a challenge but we have a very strong founding team. I am basically sharing the vision, sharing our passion, sharing what we’ve been able to achieve over the last few months. And showing people where we are going has gradually helped them to embrace us; we are like one of the top go-tos for people to want to work with us right now.
So we have experience cutting across those who have worked within the financial sector. We’ve also had a good representation in the retail space operations whereby even our CTO has been privileged to work in a bank and engage with a lot of MSMEs. I also, in the course of my working experience, have been privileged to work and engage directly with most of these MSMEs to understand their pain point, to understand how technology can actually improve their lives. Our COO comes with experience in operations, as well as also having a human touch; she’s very strong in human capacity development, so she’s able to coordinate end-to-end of the whole flow.”
Narrator: Onboarding popular stores has also proven difficult. According to Adeshina, when pitching to these stores, they prefer to digitise their sales channels rather than work with the startup. However, he believes that as long as users keep increasing they will come around.
The eCommerce market in Nigeria remains nascent but players like One Kiosk Africa continue to create a niche for themselves, in preparation for a ready market. Adeshina is confident that if they are able to engage informal retail players to adopt online models, they can win the mass market.
In bringing informal retail online, One Kiosk Africa also intends to help them connect to financial partners that can use their sales data to grant them access to credit for expansion.
In the immediate future, Adeshina looks to deepen One Kiosk Africa’s presence in Nigeria within the next 12 months. After that, the goal is to get into Ghana, Kenya, South Africa, and Egypt over the next five years.
Thank you for listening to Built In Africa.
This script was adapted by Muyiwa Matuluko
Research and interview by Heritage Kene-Okafor
Sound design by Oghenekaro Obrutu
This is a production of Techpoint Africa
I am Muyiwa Matuluko.
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