E-commerce delivery service disrupts Africa's mobile technology space
Movemeback, meet Tayo…
Meet Adetayo Bamiduro or ‘Tayo’ – the man transforming Nigeria’s logistics industry through mobile technology. After speaking with Tayo for an hour or so, I believe in his potential and am impressed by the size of his vision.
According to him “the beginning of the transformation of Africa [in recent years] started with the introduction of mobile tech.” I believe him… He’s an expert; a Nigerian entrepreneur earning an MBA at the world-renowned Massachusetts Institute of Technology (MIT) and a Computer Science graduate, who created a start-up, specialising in ‘mobile asset tracking’, straight after university. He’s an ex-PWC consultant and has worked in Tech-Enterprise for Nigerian oil company, LNG. Whilst studying for his MBA, he’s had two start-up ideas. One, he says, is currently ‘in the cooler’ and the other, which he plans to launch soon, is called Metro Africa Xpress. We speak over Skype the day before he returns to Boston, after spending a semester at the London Business School.
“The beginning of the transformation of Africa [in recent years] started with the introduction of mobile tech.”
Metro Africa Xpress
“Why mobile?” I ask him… “The moment mobile tech companies came into Africa and rolled out these services”, he says, “It unlocked the latent energy that had been logged up for so long in Sub-Saharan Africa. It’s not just mobile. It’s the opportunities that it unlocks.”
I couldn’t agree more, especially after he outlines the premise of his start-up due to go live in July. In Lagos, in the past 2 to 3 years, e-commerce and online retailers have really taken off. “That space has grown from virtually nothing, to now crossing $0.5 billion in Nigeria alone.”
With the scale at which this industry is increasing and due to lack of delivery vehicles, of course it has been difficult for suppliers to scale up. Since “Urban planning isn’t the best”, he says, it’s hard for delivery agents to get around and find addresses. As a result, delivery times can range from anywhere between 1 to 6 days, causing uncertainty for online shoppers.
Intense traffic is also a major issue in the congested city of Lagos. Consequently, an increase of even more vehicles by way of delivery trucks would put even more pressure on an already strained transport system.
In Lagos, in the past 2 to 3 years, e-commerce and online retailers have really taken off. “That space has grown from virtually nothing, to now crossing $0.5 billion in Nigeria alone.”
Tayo calls his idea a cross between Uber and UPS.
Metro Africa Xpress (MAX) comes in by using existing taxi and delivery drivers to deliver packages alongside their usual duties. It’s efficient, as it does not increase traffic volume and companies can be more flexible when scaling up. Taxi drivers usually have great local knowledge, so despite the Urban Planning issues, they can get deliveries to clients on time.
MAX guarantees faster delivery times which will only fuel a faster uptake of online shopping. He has already secured his first client, Konga, one of the largest online retailers in Nigeria. And, he predicts, it will be relatively easy to secure new clients as a result of only having to convince online retailers to offer his delivery service.
His objective is to create an efficient logistical platform for the entire e-commerce ecosystem in the region.
What’s more, MAX is positioning itself as a social venture, aiming to increase income for un- or undereducated people in Nigeria. Youth unemployment there is almost as high as 50%. “As the economy becomes more modern and sophisticated, these cohorts will become more and more disenfranchised.”
Like Uber, MAX delivery agents would stand to make twice as much as drivers from competitors or other taxi drivers. As e-commerce, and therefore the potential client base, grows, MAX could employ thousands of uneducated or unemployed people and give them a sustainable income- a win-win all round.
This impact would not be restricted to Lagos alone. He wishes to eventually expand this local delivery service to “50 other African cities in the next 5 years”.
Metro Africa Xpress (MAX) comes in by using existing taxi and delivery drivers to deliver packages alongside their usual duties
According to Tayo, there are now 15-20 e-commerce platforms across sub-Saharan Africa. With plenty of potential clients, this will give MAX the potential to grow rapidly.
Tayo would eventually like to expand his service to the C2C market as well. He envisions an app people could use-again like Uber- to find a local delivery agent, who can come and pick up a parcel for delivery. This could be used in a myriad of ways by people with a sharp enterprising mind. It could be a huge advantage for people who run micro or small-scale businesses.
Mobile’s Impact
I was impressed by his idea and the potential impact of it… ‘In the cooler’ is another product inspired by the ‘Internet of Things’. For those unfamiliar with the the term, it proposes a future in which, a variety of objects such as fridges, walls, wearable technology or self-driving cars and even people will be digitally connected. To some, this ideas can seem far off and futuristic but the Internet of Things is already somewhat a reality and one that Adetayo is keen to be part of.
This ‘internet of things’ start-up is “in the cooler” for now. Although his idea is not implausible or super-high tech, he argues that “Nigeria isn’t ready for it yet’’. It is an app-based product, so to be successful, there would need to be a large amount of people possessing sophisticated devices. After hearing more about it, I initial thought that this idea would be kept locked away for years or decades maybe. However, Tayo plans on revisiting the start-up in a few years as he believes that, “within a year from now it will be a totally different market.”
“A year?”
“A year! Now that Asian companies like Xiao Mi are coming out with super cheap but really good smart phones, you’re going to see a much more rapid adoption of smart phones in developing countries including Nigeria.”
Tayo would eventually like to expand his service to the C2C market as well. He envisions an app people could use-again like Uber- to find a local delivery agent, who can come and pick up a parcel for delivery.
If you live in the West, it would be no surprise that you’ve never heard of Xiao Mi phones. I’ve seen one in the flesh and was stunned that some of these iPhone look-alikes cost around £100. With Asian products popular in Africa, Xiao Mi phones are the perfect -and equal in quality-alternatives to Apple products.
However, good connectivity to make the best use of smart phones is a huge issue in some areas of Africa. Nonetheless, Tayo argues that this isn’t as big a problem in Nigeria. “Broadband services, especially mobile 3G services, are forecasted to have a much stronger penetration in the next one year. 50% of the country will have access to 3G services.”
The uptake of mobile technology is extremely rapid and overshadows at home devices such as desktops and laptops by a wide margin. This is because the barrier to entry is extremely low. “The cheapest 2G smart phones from Asia can be as low as $20, or less.”
When the opportunities that this uptake opens up are considered and exploited, the positive impact it could have on the country is amazing. The rapid rise of e-commerce is one of the first success stories.
As mentioned earlier, e-commerce is currently worth about $0.5 billion. But according to Tayo, “it is nowhere near its tipping point.” He has forecasted that, “by 2030 e-commerce in Nigeria alone would have crossed $10 billion – 20 times its current worth.”
He carries on, reeling off a list of dizzying statistics.
“Look at a country like Brazil which has a population of just about 200 million people, slightly more than Nigeria. Brazil’s economy at the moment is worth $2.3 trillion per annum. By comparison, Nigeria’s economy is valued at $510 billion, which is about a quarter of Brazil. And Brazil is still considered to be an emerging market. It’s nowhere near potential. …and Nigeria has more natural resources than Brazil. The picture that I am trying to paint here is that Nigeria is still extremely far from potential. And also if you look at the demographics, 40 years from now, Nigeria’s population would have grown to almost half a billion people. It’s even been forecasted that in the next 100 years, Nigeria will be the third largest country by population in the world with almost a billion people. So you see that the market will continue to accelerate, you’ll continue to have a much younger population.”
“Broadband services, especially mobile 3G services, are forecasted to have a much stronger penetration in the next one year. 50% of the country will have access to 3G services.”
This younger, more digitally literate population will demand, improve and innovate using ever advancing mobile technology. With such a large population, it has the people power and the potential consumer base to make a brilliant idea grow exponentially.
Tayo believes that [mobile] technology will inspire people to earn more.
Although Nigeria and the rest of Africa is full of potential, of course there are plenty of challenges that need to be overcome. Mobile technology can help do this. “Tech provides the best solutions for many issues such as Urban Planning, Logistics, Housing, you name it…” Mobile tech can leverage added social value, just like Tayo’s Metro Africa Xpress intends to.
For Africa, mobile tech is an extremely powerful force that should not be taken lightly. His positive vision for the future of the continent in terms of technology and otherwise is contagious and I can’t help but to see it too.
“Any company that doesn’t have a solid Africa strategy is probably making a big mistake.”