When we're shopping, we usually don't think about how or when products are ordered and stocked. Most times the items we need are available to us and if they're out of stock, they're likely to be replaced by the following week. This is the case for most large retailers across the globe especially in the West where most retail are multinational corporations but what about smaller shops in emerging economies? For smaller shops with limited resources and access to goods, keeping the shelves stocked with consumer goods can be a challenge.
The Kenyan startup, Sokowatch is looking to make the lives of small shops easier by connecting them to multinational suppliers via text message. According to their website, over 84% of all consumer purchases made in African cities is done through small, independent shops, a sharp contrast to consumer good purchases in the West, which are typically made from big box stores. By providing for small businesses and entrepreneurs, Sokowatch hopes to tap into potential revenue by offering access to services they wouldn't otherwise have. How important are small businesses to invest in? Well, on their website they say that each year $180 billion in sales is generated by these small, independent shops. Though many emerging economies rely on small, often family-run independent enterprises, resources for them are limited. Securing business loans, stocking shelves and expanding markets are just some of the everyday difficulties many small business owners face.
For emerging markets in East Africa, which rely heavily on small businesses but don't provide adequate services for them, Sokowatch helps by offering on-demand distribution to their individual locations meaning that retailers spend less time and money requesting orders through traditional means. Sokowatch's orders can be placed by SMS and retailers can even receive free, same-day delivery because most deliveries are completed in 2 hours. Sokowatch's delivery trucks are assigned to specific regions of the city. The vehicles, driven by experienced drivers and designed to be mobile warehouses for the retailers, service thousands of shops. The idea was not only to provide access to more resources but that drivers and shop owners would form close relationships with as well. The deliveries can be tracked and are guaranteed to be on time. In addition to using their services by text message, orders can also be processed, routed and tracked on Sokowatch's custom technology platform, which was designed by local software developers.
Our vision is to offer millions of emerging market retail shop owners access to the goods, finance, and data services that will enable them to dramatically improve their businesses and their livelihoods. By creating a unified digitized network of retail shops that rely on us for critical business services, Sokowatch is positioning itself as the leading choice for distribution, market research, and real-time data collection in the these fast-growing markets.
Currently, Sokowatch's services are available across Nairobi, Kenya and Dar es Salaam, Tanzania but they have plans to expand across the continent this year. So far they have supplied approximately 5,000 shops in Nairobi and only 3 months after expanding to Dar es Salaam reached 1,000 customers. Their future launches are planned for Mombasa, Kampala, and Kigali. This could be huge news for independent shops all over Africa, a continent where informal economies often dominate areas like retail. By providing services to act as a liaison between the customer and the retailer, talented entrepreneurs may be able to find their niche in this informal economy and there is a better chance that they can stock up on products that customers want and need at a rate that is comparable to big box stores.
To ensure that the products and services provided are appropriate for their customers, Sokowatch collects data on the orders it fulfills and additional feedback is collected by their customer service agents. New products are added to their catalog regularly, especially popular consumer goods. This way they are not only able to better suit the needs of their clients but they help customers expand their market as well.
Although such a large percentage of small retails supplied consumers with goods, there was no direct distribution system for them until Sokowatch came along. Their business model is proof that they researched and understood the East African economy well enough to provide options for an overlooked, yet critical sector of the economy. By providing basic services for these retails, they stand to become a one-stop-shop for these businesses and to capitalize on the economic neglect of other companies. Business owners of course benefit from having access to goods directly and more quickly and the benefit for customers is being able to buy their preferred products from their preferred retails, encountering fewer circumstances where they are out of stock. Competitive pricing and better deals almost exclusively depend on companies noticing this untapped market and contributing there services as well, whether or not this will happen remains unknown.