Dellyman, the pioneer of asset-free logistics marketplace in Nigeria, has seen record growth in all major indices, including a 45 percent increase in the number of active customers to 1,586 between March and April.
While this represents a 91 percent increase from growth in January, it is coming in a period when businesses in other sectors battle with the devastating impact of COVID-19 pandemic.
Logistics is an old sector that has grown over the years to contribute about 3.5 percent to the GDP of 2019. McKinsey in 2018 puts the eCommerce market in Africa at $25 billion and expected to grow to $75bn by 2025. In 2019, Nigeria’s eCommerce market was estimated at about $17 billion. Using an average basket size of $50 and 2 items in a basket, this could easily translate to about 170 million deliveries annually. Today, the average cost of a last-mile delivery is about $2.70 (N1,200) putting the value of the last mile logistics industry in Nigeria at $460 million.
Asset-free logistics marketplace is a new territory at least in Nigeria. To be sure, a marketplace is an online platform where customers and vendors or owners of products can transact business. Customers are able to access products from multiple merchants or vendors from this single platform.
In that sense, a logistics marketplace is an online space where customers looking for logistics services are able to access the assets of multiple logistics companies in one online market. The logistics marketplace aggregates logistics companies and their assets on a platform so that buyers of logistics services can find logistics services with ease.
Launched in March 2019, Dellyman set out to solve same-day, an age-long problem in the logistics sector that has had dire repercussions on the profit margins of players in the sector and ecommerce.
“Last-mile delivery is complex and tough and only an understanding of the deep problems faced by the market and service providers can help increase the possibility of same-day or even a next day delivery,” Dare Ojo-Bello, founder and CEO of Dellyman told BusinessDay.
Beyond impacting the downline of providers, failures in meeting same-day delivery have also left many individuals, retailers and organisations that placed orders frustrated. According to a survey by Convey, of more than 1,500 shoppers in 2018, about 98 percent said that shipping affects brand loyalty, and 84 percent said they are unlikely to return to a retailer after just one negative experience, a 34 percent increase from 2017.
“The model leverages cutting edge technology that guarantees quick pick up and same-day delivery; provides increased access to logistics assets through aggregation; delivers an on-demand delivery service while offering a delivery infrastructure to retailers and e-commerce platforms so they don’t have to own logistics assets or technologies,” Ojo-Bello said.
Dellyman’s focus on the challenge has seen it grow its revenue 20 times between January and April 2020 with average monthly growth within the same period averaging 145 percent. The company now targets over 5,000 orders in May alone.
The platform has seen 20 average daily customer acquisition, with at about 38 per cent of the total active customers placing at least one order since coming onboard.
“The numbers we have seen within the past two months is a concrete validation of our business model. We had initially assumed that it is because of the lockdown alone, but we continue to see even a more increased adoption after the phased easing of the lockdown started. We are now looking to even expand our capacity to be able to keep up with the growing demand,” Ojo-Bello said.
Dellyman also secured a major partnership with fintech firm OPay, to boost its delivery assets by deploying some of the idle motorcycle assets from ORide. This saw an increase in the number of riders on the platform and over 3,000 orders completed by the first week of May 2020 – a 93 percent increase from February 2020.
Dellyman plans to expand its physical locations to Ibadan, Port Harcourt and Abuja immediately after the lifting of travel restrictions due to the COVID-19 pandemic. It hopes to complete roll out in five major cities by the end of 2020 and 20 major cities in Nigeria and at least 2 Africa countries by 2021. The expansion is to sensitise customers as well as onboard local logistics partners that will guarantee the supply of and availability of assets on the platform.