Tech-enabled logistics and last-mile delivery services are the backbone of the booming e-commerce industry in Africa projected to grow by about $180 billion to the region’s GDP by 2025 according to UNCTAD. This growth is largely driven by the expansion of the mobile internet access and the penetration of smartphones. GSMA expects 61% of connections in Africa to be on smartphones by 2025 with 33% being on 4G.
The success of e-commerce beyond the projections will rely primarily on infrastructural developments related to the availability and reliability of road networks, adequate addressing systems and logistics networks. Together, these will ensure that when products are purchased, they get to the consumer in a fast, efficient and reliable way.
In this article, we will delve into the importance of tech-enabled logistics and last mile delivery services, especially for e-commerce in Africa, and highlight five promising startups that are making a significant impact.
The E-commerce Boom in Africa
Africa is no stranger to the e-commerce revolution that has been sweeping across the globe. This surge in online shopping has been facilitated by the rise of innovative logistics and last-mile delivery startups leveraging technology to bridge the gap between sellers and consumers. These startups are redefining the way goods are transported, stored, and distributed. Here are some key reasons why their role is indispensable:
- Efficiency: Advanced logistics technology optimizes route planning, reduces delivery times, and minimizes delays, resulting in faster and more reliable deliveries for e-commerce platforms.
- Cost Reduction: By optimizing supply chain operations, logistics startups help e-commerce businesses reduce operational costs, making it possible to offer competitive prices to customers.
- Real-time Tracking: Tech-driven logistics solutions provide real-time tracking and visibility, allowing both businesses and customers to monitor the status and location of their shipments, thereby enhancing trust and accountability.
- Customization: Tech-driven logistics can tailor their services to suit the specific needs of e-commerce businesses, whether it's handling perishable goods or ensuring secure delivery of high-value items.
Last mile delivery, the final leg of the delivery process from a distribution center to the customer's doorstep, is often the most challenging and costly part of the supply chain. Tech-enabled last mile delivery startups are addressing this issue with innovative solutions by reducing delivery times, expanding the reach of e-commerce businesses and improving delivery efficiencies among others.
Below are five startups enabling and facilitation e-commerce through technology-enabled logistics services.
Jetstream Africa is an e-logistics company for cross-border trade that provides technology-enabled freight forwarding, trade financing, and cargo tracking tools for businesses in Africa. Overtime, Jetstream's business model has shifted to that of a freight forwarder. The company now involves itself in the end-to-end movement of shippers’ cargo (both import and export), charges a fee and, supplies finance to those who need it.
In January 2023, they announced a pre-Series A funding of $13 million in equity and debt which will allow the startup expand into new countries and continue to develop its technology platform.
Currently headquartered in Ghana and present in 12 African countries, Jetstream Africa was founded by Miishe Addy and Solomon Togbor in 2018.
Lori Systems, an African on-demand logistics and trucking company digitizing haulage and providing shippers with solutions to manage their cargo and transporters. The platform combines technology and customer service to guarantee transport rates, cargo safety and reliability.
In August 2022, Lori was the third African startup to be funded from Google's $50 Million Africa Investment Fund announced in October 2021. Since its founding in Kenya in 2017, Lori Systems has helped thousands of shippers and carriers move over $10B of cargo across the continent.
Kobo360 was founded in 2018 in Nigeria to solve the inefficiencies in Africa’s supply chain, by creating a platform that connects manufacturers and cargo owners with truck operators, to move their goods seamlessly across the continent.
Through a user-friendly mobile and web application, Kobo360 pioneers products and solutions designed to serve all participants within the supply chain ecosystem. By leveraging the power of big data and technology, they are dedicated to minimizing supply chain vulnerabilities, eliminating logistical impediments, reducing manufacturing inefficiencies, shortening turnaround times, and curbing goods losses.
The startup is on a mission to build the Global Logistics Operating System (G-LOS) to drive efficiency and affordability in the supply chain.
GIG Logistics, founded in Nigeria in 2012, stands as a prominent logistics company renowned for its innovative use of technology in the delivery sector. Catering to a diverse clientele, they efficiently manage large corporate deliveries while also pioneering inventive solutions tailored for small businesses.
Their comprehensive service portfolio encompasses various offerings such as domestic and e-commerce logistics, freight forwarding, haulage, warehousing, distribution, mailroom services, and much more. With presence spanning over 230 locations worldwide, GIG Logistics facilitates seamless from Nigeria, offering a wide array of intra and inter-state delivery services.
In a significant stride towards enhanced customer convenience, GIG Logistics introduced the GIGGo App in 2019 - a mobile app that empowers users to create shipments effortlessly from the comfort of their homes and offices. This innovation eliminates the need for customers to wait at experience centers for their items to be dispatched, streamlining the entire delivery process.
Established in 2020, Flextock emerged as a pioneering force in Egypt, dedicated to providing tailored fulfillment solutions to the growing online business community. At its core, the company operates an on-demand warehousing and fulfillment platform that simplifies the entire supply chain process.
Flextock takes care of every aspect, commencing with inventory retrieval from businesses, followed by secure warehousing within their fulfillment centers. Once orders are placed, they process them and conclude with shipping to end-customers on behalf of the business. This solution extends a lifeline to online enterprises of all sizes, offering the opportunity to outsource their complete logistics requirements while maintaining real-time inventory oversight.
Flextock's disruptive presence in the logistics sector of the MENA region stems from its unwavering commitment to enabling businesses to scale their operations seamlessly.
Tech-enabled logistics and last-mile delivery services are pivotal to the success of e-commerce in Africa. As technology continues to evolve and startups drive innovation, the future of e-commerce in Africa looks promising, with logistics playing a central role in this digital transformation.