Dear Quartz Africa Members,
Large retailers have struggled to compete with the vast number of small shops and stores in African countries. For example, it represents the informal retail sector in Nigeria and Uganda 90% of retail price Fast Moving Consumer Goods (FMCG). In a continent where distributing products is expensive and complex, how do large manufacturers ensure that their goods reach the places where customers will buy them?
A lack of information in the supply chain means FMCG manufacturers struggle to inform sales strategies and expansion plans. Also, the poor Infrastructure It makes product distribution very expensive in many parts of Africa.
This picture becomes even more complicated when you consider the third-party logistics market, whose overall revenue in Africa has been hit. 27.9 billion dollars In the year By 2020, small players, especially individual truck owners and transporters; They usually dominate Compared to logistics companies, the transportation of goods, which operates with less protection. But Now, several startups are innovating in various areas of the supply chain, from finance to inventory management, warehousing and distribution.
Every supply chain participant has a role in the transformation. The key is to achieve this Increase infrastructure fund and adopting new technologies.
Please note that this is the last issue of the Quartz Africa Member Brief you will receive. We value your membership. Check your inbox for guidance from the marketing team on next steps.
Cheat sheet.
💡 Opportunity:- Supply chain startups in Africa have many gaps to plug—be it in finance, logistics, warehousing, or distribution.
🤔 Test: Weak infrastructure, fragmented markets and regulatory hurdles can raise the cost of doing business for supply chain startups.
🗺️ The roadmap:- Supply chain startups must build products that address the unique challenges of manufacturers, traders and transporters in Africa.
💰 Stakeholders:- Manufacturers, startups, governments, regulators, financiers, traders, etc Distributors
in digits
90% Share of informal retailers in retail prices in Nigeria
27.9 billion dollars. The total revenue generated by the third party logistics industry in Africa in 2020
100 billion dollars. The infrastructure funding gap in Africa
80%: Jobs created by SMEs in Africa
51% The proportion of SMEs in Africa that require more money than they can currently afford
Case study
Start: Maps
Headquarters: Dar es Salaam, Tanzania
Originally established as a distribution platform with its own shipping fleet, Ramani has developed logistics software that helps distributors manage inventory, process payments and gain sales insights. The Tanzanian company works with clients including Coca-Cola, Dangote Group, Serengeti Breweries and Vivo Energy.
In technology and financial education, Ramani’s three co-founders—Ian Usiri, Calvin Usiri and Martin Kibet—left their jobs in the US three years ago to create a startup in Tanzania.
“We felt it would make more sense if we could succeed here at home. So we took our savings, booked one-way flights and headed here,” CEO Ian, a former Salesforce product manager, told Quartz.
Ramani offers inventory management and procurement software, as well as point of sale (POS) software and handheld POS devices. The biggest benefit you get from the service is fast access to sales and inventory information of FMCG brands and distributors. FMCG brands and distributors can use insights, including heat maps – visual displays to see at a glance high and low selling areas – to identify opportunities to increase sales.
Their participation in the US startup accelerator Y Combinator, the company’s software pillar, allowed them to explore new models for the company.
In the year If the central bank gets its lending license in 2022, Ramani is now also a way to help small businesses grow by lending to those who use its services. While Inventory financing was a key component of Ramani. $32 million Series A The funding round was announced in November, Ian said, however, explaining that the company’s main objective is to become a software-powered distribution engine.
In a conversation with Ramani CEO Ian Usiri
🤑 Why introduce inventory financing:
“Microdistributors are SMEs in Africa and SMEs struggle to get financing from banks. They cannot get credit and have to buy goods with cash on hand, which makes it difficult for them to grow with the increasing demand.”
🏢 Going beyond inventory finance startups:
“What we are building is not an inventory finance business. We are digitizing independent third-party micro-distributors and building financial software.
🚗 How the out of circulation pillar affected Ramani:-
We were distributors ourselves…[and] Our data or heat maps show where products are sold – we provide information Brands are used to make decisions.
Supply chain discounts for 👀
Nigerian B2B business startup OmniBiz announced a $15 million pre-Series A August 2022 funding round. OmniBiz connects FMCG manufacturers with retailers, allowing retailers to order goods through the platform and have them delivered for free.
ChariThe Moroccan B2B business startup raised a bridge round evaluating the company in January. 100 million dollars. Founded in 2020, it allows retailers to order items and have them delivered to their stores. In August 2022, Chary acquired Karny.ma, a mobile credit book app that allows retailers to monitor their customers’ credit.
Cairo-based B2B business launch in October 2022 Max AB Closed a 40 million dollars While the pre-Series B equity round could expand into North Africa and the Middle East. The platform enables food and grocery retailers to easily source goods from various suppliers.
More from Quartz Africa
😃 More than half of Jumia’s deliveries are now delivered within 24 hours
🙌 One of Nigeria’s largest grocery distributors has bought its Ghanaian counterpart
🤔 There is still work to be done in e-commerce in Africa.
📱 Social business is becoming an important business model in Africa.
📹 African diplomats are broadcasting live to Chinese consumers.
🇲🇦 Morocco’s e-commerce development has passed the lock
🛒 Why is Central Africa lagging behind in e-commerce?
🤝🏽 Why B2B is the key to unlocking Africa’s e-commerce potential
This member’s briefing was prepared during the hearing. “Kuna Kuna” By Vic West, Brandi Minaj, Fathermoh, Savara and You Out Band. 🇰🇪. Have a wonderful week!
—Martin Siele, Nairobi-based contributor
🤯 One thing
Informal retailers are among the largest lenders in Africa. In Kenya in 2019, the number of households borrowing from shopkeepers showed a 10-year high 29.7% Mostly taking loans from shopkeepers for basic food items and other essentials.
