SECTIONS

Logistics start-up charts a digital way to ease customer deliveries

Sendy founders, from left, Don Okoth, Malaika Judd, Mesh Alloys and Evanson Biwott. [File, Standard]

In under a decade, Sendy has positioned itself as a pan-African start-up facilitating trade for thousands of businesses across the region through its fulfilment infrastructure.

“The question we keep asking our customers is how we can help them sell more,” says Sendy co-founder and CEO Mesh Alloys.

But what exactly is fulfilment infrastructure?

For trade to happen, there needs to be a market, a logistics hub and financial services solutions to deliver goods and pay for them.

“We aggregate all these into one, enabling a small business to do commerce seamlessly. This is now the infrastructure that is fulfilment for these businesses,” explains Alloys.

“With the push of a button, businesses can sell to their customers. And they don't have to worry about how products get to their customers or their storage, payments and we also sometimes finance them so that customers can buy more goods.”

Sendy, which services over 10,000 businesses is now in Kenya, Uganda, Cote d’Ivoire, and Nigeria. In the next eight months, the logistics firm is eyeing into Egypt and South Africa as part of expansion plans.

As it expands across the continent, it’s looking at how to help cross-border businesses, which means working with regulators and customs officials.

Sendy has four founding members - Alloys, the chief executive, Malaika Judd as the chief financial officer, Evanson Biwott as the engineering research and development lead and Don Okoth, the general manager, supply.

The firm has grown to tap into financial services such as lending to businesses based on the volumes moved.

The tech firm, which doesn’t own the network of riders or fulfilment centres, now has a 360 view of commerce from the ordering, delivery, and storage to financing. 

The lightbulb moment for them was during their consulting work for multinationals in the Fast-moving consumer goods (FMCG) sector where they were helping the companies establish their sales and distribution systems.

Alloys says, for example, in the Kenyan market, it’s hard to get a local logistics provider big enough to deliver to customers and cover all aspects of the trade.

Meshack Alloys (left) with Kenyatta Market trader John Mutinda during the launch of Sendy Go home delivery. [James Wanzala, Standard]

Businesses were also on and off in their relationships with logistics providers.

 “This was a lightbulb moment for us. The assets already exist and we thought what if we brought these guys together under one platform so that as a business, you don't have to have to deal with all those relationships? And also bring transparency, efficiency and eventually make it affordable,” says Alloys.

Kenya has an underdeveloped national addressing system making things such as last-mile deliveries difficult but through data, Sendy has been able to make it efficient and work for them. “We save locations of unfamiliar places so that next time deliveries can be seamless,” he said.

The aim is to make deliveries affordable. Alloys notes that the average basket value of a Kenyan shopper online is between Sh1,000 and Sh3,000.

“For us, the question we’re answering is if that's the amount being spent, what is going to be the delivery fee for a customer to be able to get that product at an affordable price?”

And how do they deliver a product worth Sh100? “There’s no point in buying something worth Sh100 and then the merchant is telling you, you'll pay Sh300 for delivery. It makes no sense. So we're trying to answer that question.”

“That for Sh100, can we deliver it for maybe Sh45 or Sh20 based on the consolidation, the network and the volumes that we have,” says Alloys.

However, Sendy also provides express services to customers who want products the same day but at a premium.

They first consolidate the huge volumes and then deliver them - making a product affordable. Mr Alloys says the plan is to cut delivery costs by for example having a customer to buy peanut butter or honey online for Sh500 and get charged Sh50 for delivery - unlocking opportunities for merchants.

Through their infrastructure, they enable mechants to know the similar locations that riders will deliver to via machine learning techniques. This aids them find the most efficient way to deliver the courier - bringing down the cost.

Sendy’s competition is mostly the informal sector including boda boda riders as the start-up concentrates on the last mile market.

The delivery and logistics market is also segmented and has big players doing the first-mile heavy lifting for example driving goods from the Mombasa Port to the hinterland and others like courier companies.

In a way, Sendy has helped formalise the boda bodas through partnerships with the riders.

At the start of the business, Alloys says, they faced challenges. “We call them (challenges) school fees internally. We learnt something because there's no one who was here before Sendy that we could actually learn from. We had to make those mistakes to be able to get to where we are.”

Sendy co-founder and CEO Mesh Alloys. [File, Standard]

Their model works because they are solving a problem in a key economic sector which is underdeveloped. “As a business, if you start operating you want to sell to your customers. In the developed world, the infrastructure is there for you and you don't have to worry about that. But here you find businesses will have to build their own or try and manage it themselves.”

The real milestone for Sendy which was started in 2014, he says, will be hitting ten years. “In the last seven years that we've been in existence, I would say the key highlight is the impact that we have created amongst the logistics ecosystem.”

“When their systems are down, one can see the ripple effect which shows the importance our infrastructure has for small businesses."

Sendy wants to impact Kenya and Africa the way e-commerce giant Alibaba has done for China.

E-commerce in Kenya was accelerated by the pandemic and is set to keep growing with lots of businesses being created to sell primarily online. Alloys says the firm has stayed ahead of the game by talking to their customers.

His typical day involves making sure that Sendy’s strategy and vision are on track, looking for resources, nurturing a company culture and rallying a great team to success. 

The business mostly deals in fast-moving goods. “When income levels go up, we’ll see new dynamics. For now, people are eating, living and looking good,” he says.