Stories
Nigeria is vast. 213.4 million people. 923,768 square kilometers. 36 states. Over 3 million registered companies. The opportunity seems massive. As a business owner, tapping into that potential market could be a gold mine.
But let’s teleport ourselves into that business owner’s shoes for a moment. Musa, the hypothetical owner of a Nigerian business that produces supplements, has spent the past 4 years making his business bullet-proof. He has his product, has streamlined his supply chain, and built a solid team and solid tech platform through which he sells it. He is located in Lagos, while he outsources production to a factory in Idu.
You would think a typical day for Musa would be to ensure that the quality of his product remains intact, brainstorm on how to expand his product offering and customer base, and check in with the team on the latest KPIs that the company has achieved.
But instead, Musa is juggling phone calls, WhatsApp messages and Excel sheets to make sure that his customers actually receive his product. He gets a call from a courier delivering an order to Lagos, to make sure that he has the correct package. He then receives a voice note on WhatsApp from the logistics company handling his Enugu deliveries, saying that it won’t be able to ship the agreed on number of orders today. The customer service chatbot keeps pinging about a customer in Abia, enraged that she hasn’t received her supplements. And then he still has to chase the logistics company covering Sokoto to settle some outstanding payments. Above all, he has to manually track the orders sent out yesterday to make sure they were delivered safely. And in the end, the cost of sending out the shipments is almost as high as the cost Musa bears to manufacture his product.
Being a business owner on its own is stressful. But growing a business amidst Nigeria’s fragmented logistics ecosystem surely just adds more stress. That is why everyday Musa asks himself over and over again: How do I ensure, after I’ve spent years building my product, that it smoothly reaches my end-customer?
Seun Alley has witnessed this first-hand. She has over 10 years of experience in Nigeria’s banking sector, including First Bank of Nigeria, OPay and Bloc, in which she mainly was in charge of operations. And that is where she learned quite a few lessons about Nigeria’s e-commerce delivery market.
Lesson 1: There are over 120 million e-commerce orders conducted annually in Nigeria, and while multinational logistics companies operate across Nigeria, they rarely complete delivery services outside of major cities.
Lesson 2: While SMEs contribute 48% to the country’s GDP, delivery fees by large corporations are fixed and extremely high, and are therefore unfavorable to SMEs.
Lesson 3: Nigeria’s logistics scene is a highly fragmented delivery ecosystem, characterized by unprofessional front line personnel and inadequate means of feedback on delivery activities.
That is why Seun, along with her cofounder Femi Jose launched Fez Delivery, a last-mile delivery platform that covers all of Nigeria’s 36 states + FCT. Fez also fills the cost gap through a flexible pricing model based on the distance traveled and the type of item sent. “We don’t want SMEs to stress over logistics,” Seun says. “Through Fez, they can seamlessly upload their items, make and receive payments, track the items and get data on their customer behavior.”
Today, the company has a customer base of 14,000 individuals, SMEs and corporations and completed over 500,000 orders to date, with a customer retention rate of 81%. One of their major achievements was being a part of clearing a local bank’s backlog of 400,000 debit cards that needed to be sent out and delivered to customers, within just three months.
And this is essential for SMEs. “Tapping into parcel delivery across the whole of Nigeria, as opposed to just big cities, enables SMEs to compete with national players by providing them with last-mile delivery services that suit the nature of their operations,” Acasia Ventures General Partner Biola Alabi explains.
