Posts Tagged ‘supply chain’

Carrefour in Cote D’Ivoire: Thinking global; acting local

Unusually, for a global retail brand like the French Carrefour chain, their range of products in Abidjan, Cote D’Ivoire include numerous locally sourced products. News has it that they signed as many as 170 different supplier agreements in their bid to source indigenously.

…local products like pineapple from Bonoua (south-east), yam from Bondoukou (east), rice from Danané (west) tomato and outfits designed by local seamstresses in Ivory Coast.

This doesn’t seem like a one off deal either, but a comprehensive sourcing strategy. From the material available on the CFAO website, it seems they’re working closely to train local suppliers and integrate them into their supply chain. The relationship has the potential to go regional, as Carrefour and their local partner CFAO expand their modern retail footprint.

retail francophonieThe retailer will work with local SMEs and farmers to improve quality standards, logistics and management ahead store openings and mall development.

The potential for greater impact is apparent in this strategy, as opposed to the more conventional approach taken by other transnational retailers, particularly those from South Africa. They tend to source from their long established suppliers, even if it means shipping in produce from halfway across the continent.

This will be interesting to watch, particularly from the perspective of the informal sector.

 

 

Quality of service at the last mile will make or break African e-commerce startups

Photo: Techpoint.ng

Photo Credit: Techpoint.ng

With new e-commerce startups sprouting up everyday, competitive advantage in the urban African context will boil down to their quality of delivery and logistics managment. Given the lack of infrastructure such as home addresses, post codes with embedded information, or  as is the case in India – the last mile of delivery in the form of the village postman – the responsibility for ensuring customer satisfaction lies squarely on the shoulders of the online businesses themselves.

Online stores in more developed operating environments can focus on the aesthetics of their web presence, the design of an order form, or building a loyal community of users. Their business models emphasize the way they will distinguish themselves in a crowded marketplace and build brand awareness to gain a critical mass of customers.

But for the slew of  startups in emerging markets such as Nigeria’s or in the Cote d’Ivoire, it will be their distribution strategy and logistics management in the last mile that will differentiate the winners from the losers. Does the business plan have a viable solution for addressing this challenge?

New players are emerging who see this distribution need as an opportunity space, one such is ACE in Nigeria, whose last mile solution has been documented in detail by Techpoint.ng today. Others eyeing this lucrative space include the global courier behemoth DHL, whose forecasts are rubbing their hands with glee. Big or small, their ability to serve their customers’ needs will have impact on the entire value chain, both online and in the real world.

A matter of strategy: In house delivery or third party support?

With so much dependent on the quality of the customer experience at the moment of fulfilment – timely delivery, ease of payment, courteous service, receiving the correct order, etc – the decision to invest in building in house operations, like the well-funded Kongas and Jumias, or to outsource to third parties becomes a critical component of corporate strategy.

  • Which approach will allow you the opportunity to offer the best customer experience for your brand’s needs?
  • What happens when the still nascent market matures enough for potential conflict of interest with competing brands being delivered by the same service?
  • How important is your branding in the real world as compared to the virtual experience?

These are all the questions and more besides that startups will need to ask themselves, before their potential investors ask it of them. Word of mouth travels as fast the smartphones that are fuelling the internet boom and no amount of PR will help with ensuring quality of service that will make customers return for more.