Technology companies are transforming product distribution business across the globe.

The mention of e-commerce often brings to mind global players such as Amazon and eBay in the United States, Alibaba in China, and perhaps Jumia in Africa.

However, on the local scene, there is an increasing number of start-ups in Rwanda that have spotted a business opportunity in the food distribution. Grocewheels, Store2door, Park and Pick, and Get It Rwanda, are among them.

Most of these companies, however, are using a different e-commerce model.

Unlike the likes of Amazon, Alibaba and eBay, ‘Park and Pick’ and Store2door are not fully-fledged e-commerce services.

"What we found out is that many people here are not used to e-commerce platforms. People prefer texting and calling than spending hours on a website scrolling through a series of products,” says Egide Butare, an entrepreneur behind Store2door (www.store2door.rw).

The entrepreneur says that they neither enable online payments nor own a stock, so they don’t depend on orders through their e-commerce platforms.

Instead, they use the platform to post a catalogue of the products and to allow more options for those who might want to order online.

"What we do really is to reach out to individual households and businesses directly. Something interesting also is that our customers recommend other people to our business,” he notes.

It is barely six months after Butare established his company with an aim to tap into the growing consumer segment whose preferences are rapidly changing.

He targets a segment of people who no longer want to spend a lot of time going to shop grocery in traditional street markets.

Already, there are some 10 restaurants that are subscribed to Butare’s grocery delivery service who make orders on a daily basis, as well as 15 individual households that order on a regular basis.

He revealed that his customer base has been increasing significantly.

"When I started out five months ago, I was making between Rwf200,000 and Rwf300,000 from deliveries. Looking at my revenue numbers last month, my total sales are about Rwf 24 million in a month,” he says.

Butare was previously working with an e-commerce business during which he gained insights on food distribution business and sparked his interest to start a similar business.

"When I was working with an e-commerce business we used to have a cold room where we’d stock vegetables. But they would lose their quality. We always got feedback from clients saying that products we gave were not tasty; they tasted different and weird because they were not fresh,” he recalls.

This, he says, taught him the critical importance of working directly with reliable farmers to source fresh products.

Segond Fidens Iragena, a young Rwandan entrepreneur is the brain behind ‘Park and Pick’, a three-month-old grocery service targeting customers in Kigali city.

What they do is simple; buy fresh grocery from local producers, clean, package and timely deliver them to subscribing customers. They don’t own an online store.

He asserts that those that have tried operating as full e-commerce platforms have closed or continue to struggle, pointing out to the closure of Jumia Rwanda’s online shopping platform.

"This is because it is hard to maintain those platforms and equally expensive to integrate payment gateways,” he adds.

His argument is that: "We need to first build operations and digitise Rwandan mindsets, instead of rushing to copy and paste what was built elsewhere”.

Every week, ‘Park and Pick’ share a products’ list on their social media accounts and get people to place their orders through these platforms. Like store2door, they also rely on customers’ recommendations.

Unique marketing strategy

A common thing, however, is that all of them are leveraging social networking sites like Facebook, Twitter, Instagram and WhatsApp to market their products.

It is a strategy that both entrepreneurs say has not taken off but they are optimistic that it could pay off in the medium or long-term as the online consumer population continue rising.

Park and Pick is one of the major services that North Harvest, a company that Iragena opened in 2013, offers.

"I started my company in 2013 but I didn’t really get to operationalise it. It’s just recently that I realised there is so much value to be harnessed in distribution,” he says.

The Rwandan entrepreneur has a target of structuring the agricultural value chains and bringing on board more female street vendors, most of who deal in grocery products.

At the moment, he says they get between 30 to 40 mixed customers, with a target of reaching 200 customers at the end of this month.

To achieve this, the entrepreneur has a data company that will work to understand the consumption patterns of people in Kigali. He also holds a culinary workshop every week where different people come to experience the different kinds of food products that they deliver.

Victor Nkindi, a technology and business analyst, who is also a regular customer at Park and Pick, says that such services are unique from the common e-commerce services.

"What we have learnt is that they use data to track clients’ habits. They know I buy Kinigi potatoes even if the price go up, so they will send me discount offers of 10-20 per cent,” he says.

Both store2door and ‘Park and Pick’ came in joining GroceWheels and Get It Rwanda, both in distribution businesses.

GroceWheels was recently acquired by Japanese investors, boosting its operations. Previously, it wasn’t accepting online card payments. After Japanese investors invested in the startup, they started accepting them.

On the other hand, there is ‘Get It’ which initially focused on what its Founder, Lauren Nkuranga, calls an SMS-to-order model. A similar model to that used by store2door and Park and Pick.

However, Nkuranga has shifted her e-commerce model to targeting high-end food service clientele like hotels and restaurants. She believes that the previous model involves a lot of work that startups can hardly manage to deal with.

Nkindi says that e-commerce model ought to be inspired by existing ecosystem realities as opposed to replication of international models.

This means e-commerce players will have to rely on existing boutiques, grocery stores and traditional markets that are able to understand customers better and personalise their orders depending on seasons.

editorial@newtimes.co.rw