Olumide Fayankin is the co-founder and chief operating officer of Vendease. In this interview with Feyishola Jaiyesimi, he spoke on how his organisation’s model addresses the needs of price-sensitive customers.
How has the recent economic hardship and record inflation in Nigeria influenced the operations and goals of Vendease?
The economic hardship and high inflation rates in Nigeria have created significant challenges for both food businesses and individual consumers. Food businesses are feeling the pinch with rising costs and unstable market conditions as they face significant operational challenges. On the other hand, consumers are finding it hard to stretch their budgets as food prices keep increasing.
We’ve witnessed firsthand how these issues have intensified the need for affordable and reliable food sources. We know how important it is for both businesses and consumers to find affordable and reliable food options right now. Our goal is to help food businesses grow and also alleviate some of the burden by offering a more cost-effective alternative to traditional market prices.
We’ve set up our platform to tackle these problems head-on. Thanks to our network and resources, we can offer food products at much more affordable prices. For instance, our platform enables us to offer tomatoes at 17 percent lower than the open market price, which directly benefits our users by reducing their operational costs and easing financial strain.
That’s not just a discount—it means real savings for our users. For food businesses, it helps cut down on costs and keep their profit margins intact despite the tough conditions. Likewise for individual customers, it means lower grocery bills and some relief from the financial strain.
Can you elaborate on how your organisation’s model addresses the needs of price-sensitive customers in Africa?
We’ve designed our model with a deep understanding of price sensitivity, particularly important in regions like Africa where inflation can significantly impact food prices. Our approach utilises advanced technology to streamline and optimise the entire supply chain, allowing us to reduce operational costs and pass those savings directly on to our customers.
This model serves as a strategic response to the economic pressures faced by both food businesses and individual consumers. Our volume-tiered pricing and technology-driven solutions work together to stabilise costs, enabling customers to save more as they buy more. This not only helps in managing expenses but also simplifies budgeting and financial planning for everyone.
In addition, we recognise that cash flow management can be a major challenge for food businesses. To help with this, our platform provides financial access and credit options tailored to support smooth operations. So far, we have issued a total of $72 million in credit.
With these financial tools, businesses can manage their expenses more effectively, make timely purchases, and keep their inventory well-stocked without the pressure of immediate financial strain.
For consumers, this financial support translates into more consistent access to affordable food. By ensuring that businesses have the resources they need, we help maintain a steady supply of essential items at prices that are easier to manage, even when inflation hits hard.
Overall, our model aims to create a more resilient food ecosystem, where both businesses and consumers can navigate economic challenges with greater ease and stability.
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In what ways does your organisation support food businesses in managing their finances amid the current economic challenges?
We aim to be a reliable partner for food businesses, offering not just a platform for purchasing but a comprehensive suite of financial tools and support systems to help them thrive even in tough economic conditions. We’re committed to supporting food businesses through a range of financial solutions and credit facilities designed to ease cash flow management.
One of our standout offerings is the “Buy Now, Pay Later” service, which provides businesses with the flexibility to acquire the food products they need immediately while deferring payment to a later date. This option is especially valuable for businesses that may experience seasonal fluctuations in revenue or need to manage unexpected expenses without compromising their inventory levels.
We also offer flexible payment terms and opportunities for bulk purchasing, having facilitated the movement of over 1.5 million metric tons of food to support this. By buying in larger quantities, businesses can realize significant cost savings compared to smaller orders.
This strategy not only reduces overall expenses but also stabilizes costs and pricing, making financial planning more predictable. So far, we’ve helped restaurants save $12 million on procurement costs.
As consumers demand for quality products, we facilitate connections between food businesses and reliable suppliers, ensuring that they have access to consistent, high-quality products at stable prices.
This helps businesses avoid the unpredictable fluctuations often seen in open market conditions, where prices can vary widely from one day to the next. By maintaining stable pricing and reliable supply sources, we provide businesses with the stability they need to plan and sustain their operations effectively.
What impact do you anticipate will have on the broader food supply chain in Nigeria and Africa?
We believe that we have the potential to create a positive ripple effect across the food supply chain in Nigeria and beyond. By driving down prices and improving efficiency, we can help stabilise the market and make food more accessible to a larger population.
Our approach to integrating technology and financial services not only benefits individual businesses but also strengthens the entire supply chain. We believe this model could be replicated in other countries facing similar economic challenges, thereby contributing to regional food security and economic stability.
What future innovations or expansions do you plan to further address the challenges posed by inflation and price sensitivity?
We are continuously exploring innovations to enhance our platform and better serve our users. In the future, we plan to introduce advanced data analytics to offer more tailored pricing and purchasing options. Additionally, we are working on expanding our range of products and services to meet diverse needs within the food industry.
Our goal is to integrate more financial tools and resources that provide even greater support to businesses and individuals facing economic challenges. We are also considering expanding our solutions to other countries where similar issues are prevalent.
