How e-commerce is linking restaurants to customers

Breaking the fast: Muslims being served at Hotel Africana in Kampala recently as part of Centenary Bank’s corporate social responsibility to the community. With e-commerce innovations individuals and institutions can now order for food online. PHOTO BY MICHAEL KAKUMIRIZI

What you need to know:

Joe Falter quit his job as a management consultant for McKinsey in London to come to Africa to set up an e-commerce company that bridges a gap between restaurants and customers through delivering food. Technicall, Jumiafood – an online food delivery service - now has 200 employees in 11 countries in Africa. Jonathan Adengo talked to him about e-commerce and why they recently rebranded from African Internet Group to Jumia Group.

Why did you rebrand recently?
Hellofood is part of Africa Internet Group which was rebranded as Jumia group. In terms of ownership, nothing has changed. It is simply a marketing and branding decision.
We had the opportunity to create an ecosystem of services in Africa. We believe that customers use our services because they have a close relationship with our brand and they derive value from doing things online quickly that used to be done offline and very inefficiently.
The principle motive for bringing all of our services on one brand was to create deeper relationships with our customers and to create one ecosystem that they can call home for all the online services that they use. Previously, we did the same with eight or nine different brands and so we felt that it was making things simpler for the customers to be able to access those services from one brand.
For the vendors, it becomes an incredibly powerful marketing channel. They are no longer marketing one company but the whole group.
It was exciting for me. It was a decision we made very consciously which has never been done before. It’s the first time and the last time it will happen globally.

What has been the effect of the rebranding exercise?
The effect has been very powerful because at the end of the day our goal is to get a lot of utility out of our platform. The customers have a simplified ecosystem from where they can use all the online platforms they have been using in one place.
We have seen it from the customers that a much higher proportion of them now has a relationship with one of our companies. There has also been a strong increase and deepening of relationships with our customers which has resulted into an increase in business for us.
We found out that the name that a company is a very small part of the reputation that a company has, what is important is the quality of the service the customers who receive it get. That plays a huge role in building the personality and functionality of the brand.

You have been around for three years now. How has Jumiafood been able to grasp the concept of e-commerce in a country like Uganda? Uganda is a dream place to operate. Since we started three years ago, we have grown on average 20 per cent per month. We have an incredible restaurant scene in Kampala and Entebbe and Ugandans are very open to trying out new things.
We had a great restaurant scene but there was no proper delivery service which was a huge gap missing in the market. What we have discovered is when you have a great restaurant scene and a great delivery channel, the industry grows.

How have you been able to run your e-commerce model in a country with a small internet penetration and no clear mapping system?
According to the Uganda Communications Commission, the internet penetration in Uganda is estimated at 13 million users up from 8.5 million in 2013. This is relatively low compared to other countries such as Nigeria. The low internet penetration is a huge opportunity for us because by simply more people getting on to the internet creates a great market growth potential.
We have set up a robust dispatch system which has helped us to map out our own delivery system. Our riders also have a tracking system which helps us save the location and delivery address using GPS coordinates.
We have also been able to map out our own delivery system using GPS, by customers using the locations on our system and also saving customer location with GPS coordinates rather use Google maps.
The biggest challenge we have faced was getting people to adopt the service and change their behaviour because most people could not believe that they could actually order their food from a restaurant and receive from where they are. With our e-commerce model, one can just use their phone to access the internet and order for food from their favourite restaurant and they get their food delivered efficiently.

What is the future of e-commerce business in Uganda compared to other countries such as Nigeria which have a much bigger population.?
There is a lot of potential for growth in Uganda. A lot of people are appreciating the service and ordering for their goods and food on line. Uganda recently beat Nigeria in terms of number of food orders in a day. Some countries in Africa already have a proper food delivery system while others do not have any yet.

What are your future plans for the Ugandan market?
I have very high hopes for Uganda. The internet penetration is very positive for me because a huge part of the population is still untapped. We expect the internet penetration to double in the next two to three years which is a huge business potential for us. The restaurant scene is evolving and as that increases, we see a lot of opportunities for our business.
We have also secured funding from Goldman and Sachs to expand our operations and improve our service. We are constantly carrying out research and we hope to keep on improving our service and bring down the delivery time.