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Dellyman sees future of e-commerce in same-day delivery, but can it control riders?

Dellyman sees future of e-commerce in same-day delivery, but can it control riders?

Nigeria’s e-commerce space saw significant activities in terms of investments, new entrants, and consumer adoption in 2020, largely driven by the lockdown across the country because of the COVID-19 pandemic.

Among the newcomers are Paystack and Flutterwave, while Interswitch and Unified Payment are completing plans to launch before the first quarter of 2021.

But while it attracted new monies, old enemies like delayed deliveries, high volume of returned items, yearning gaps in logistics, inconsistent and rent-seeking approach to policy formulation continue to bug the growth trajectory of the $17 billion e-commerce space. These challenges are mostly responsible for the exit of not fewer than 10 operators from the market. The likes of OLX, Effritin.com, DealDay, Gloo.ng, Buyam.com.ng, Cribpark, Gingerbox, Buyright Africa.com, among others are some of the notable exits from the market. Konga nearly caved in until it was bought over by the Zinox Group.

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“There used to be a time when I thought a massive scale was going to come to sub-Saharan Africa e-commerce. Not anymore, not in my generation,” Olumide Olusanya, founder of Gloo.ng said recently. “My reboot as an entrepreneur will be to build the biggest brick and mortar supermarket in Nigeria.”

Dare Ojo-Bello, managing director and chief executive officer of Dellyman has a different view of the market. He sees a market with a lot of potentials and could be a major earner for the Nigerian economy if the fundamentals are addressed. The logistics segment of e-commerce remains the biggest obstacle to scale in the market.

Founded in 2018, Dellyman, a transport logistics technology provider has spent nearly 30 months iterating its strategy and garnering feedback from customers and partners. In that period, Ojo-Bello said the real challenge it wants to address is same-day delivery as it holds the future of e-commerce.

With same-day delivery, online retailers are expected to benefit from reduced delivery time. Imagine placing an order for a new pair of shoes or groceries for dinner in the morning and receiving the goods when you return home from work in the evening. Some of the world’s largest retailers like Walmart and Amazon have been experimenting with innovative delivery concepts to ultimately arrive at the goal of delivering on the same day.

In Nigeria, when you place an order on Jumia or Konga, it could take up to five days or more to arrive. However, some Instagram retailers are even doing better by delivering within 48 hours the order is made. Ojo-Bello said the most ideal e-commerce solution will be one in which customers are able to get their orders within hours of placing them.

“I think the minimum we should offer to customers today for a good experience, as far as e-commerce is concerned, will be same-day delivery. You can begin to break that down to can we even do it in a matter of hours depending on the logistic company’s ability to respond very quickly plus the time at which the order was booked as well,” Ojo-Bello said.

Riders are however the biggest setback to same-day delivery.

Although logistics companies have been using riders before the ride-hailing companies came along, the majority of the riders today are former employees of the latter. Prior to the ban by the Lagos State government in 2019, ride-hailing companies employed a large number of riders either directly or as partners. The partners were often allowed to ride with their own bikes but they are branded by the companies partnering with them and they are meant to submit a percentage of profit.

Due to the size of the riders, many of the ride-hailing companies made little effort to enforce standards.

“As long as the major player in the industry then, just wanted a return of N1,500 –N2000 per day whatever you make on top of that is your sales, there were no background checks, even on whether the riders could ride, no safety checks, no psychometric test to check the mind of the riders. For the time it lasted some riders were making as much as N300,000 even after remitting their N2000 a day,” Ojo-Bello told BusinessDay.

He says this was partly responsible for the move to ban the ride-hailing companies as the riders engaged in all manner of illegal activities including driving in a hurry to make money which often led to accidents, insecurities issues, among others.

Following the ban, logistics and delivery companies inherited most of the riders. The transition to logistics is not going as planned as many riders are unable to earn as much as they did while with ride-hailing companies. Also subjecting the riders to new standards as platforms like Dellyman is attempting to do often meets with resistance.

“For most riders, they think as long as I get it delivered then the job is done but in this industry, timeliness is very critical. It is not just timeliness in terms of when you deliver, a customer may feel dissatisfied just because you did not pick up at the right time and the reason is simple,” Ojo-Bello said.

He says getting the riders fully committed to same-day vision requires patience and investment in human capital development. Already the Dellyman platform is attempting through its geofencing strategy that helps riders earn more by ensuring that they always have items to deliver as long as they are within the location of the delivery request.

“Commerce, fintech, and social verticals will converge on the logistics/supply chain space: there’s no more room for big growth in the market without removing the cap on total addressable market (TAM) from the lack of infrastructure in SSA. To grow now, they’ve got to get their hands dirty in the “real” world,” Olusanya said.