3 reasons why logistics is the key to ACFTA’s success

The provisions of the African Continental Free Trade Agreement are now in force after the Gambia became the 22nd African country to ratify the agreement in April 2019. The stage is now set for the formation of the world’s largest trade bloc.

The AU is spearheading the ambitious goal of forming one trading bloc for the continents 54 countries. This will create a massive market of more than 1 billion people and a collective GDP of USD 2.5 trillion. The United Nations Economic Commission for Africa expects that this will boost intra-African trade by more than half by 2022.

This is great news for the continent with the fastest growing population. Nonetheless, a lot of work still needs to be done to realize the vision of free trade on the continent. Negotiations are ongoing to create annexes to ACFTA that will dictate the movement of goods, services and labour within Africa.

Tariffs are not the biggest problem

Although much of the conversation has been focussed on eliminating tariffs and streamlining rules on competition, intellectual property, logistics is actually the biggest barrier to integrating African trade.

In the past 30 years, African countries have made multiple attempts at trade integration. Regional trading blocs such as ECOWAS, EAC, COMESA and SADC were formed for this exact same purpose although with a less ambitious scope. However, results have been inconsistent. In fact, in some instances, trade worsened despite these arrangements. According to a report by the London School of Economics, the amount of trade between some African countries in some of these trading blocs actually regressed!

The extent of implementation of these free trade agreements was questionable. However, logistics costs within Africa still remains the highest in the world. According to research, in some parts of the continent can be as high as 3to 5 times that of developed countries.

Here is why.

  1. Time

A trailer moving from Mombasa port to Kigali Rwanda, 1600 km will take 18 days on the road on average. Over that time the truck will have to stop at tens of roadblocks and get inspected at 2 border points. A similar trip from Rotterdam to Budapest would only take a day.

Moving goods within the African content is often unpredictable and unreliable. Long queues at border posts and cumbersome clearance procedures at ports have seen the time taken to get exports to market to be 50 per cent more than south-east Asia.

Take the example of Kenya. Kenya has made significant strides in improving its competitiveness and ease of doing business ranking 61 globally according to the World Bank. Despite this, it still lags behind in logistics in terms of customs and timeliness. Customs processing delays common and import and export rules are unclear, time-consuming and expensive. Local agencies are also overwhelmed by the volume of cargo coming into the country.

The country’s Logistics performance has dropped from 48 to 64th place worldwide between 2016 and 2018 as a result. According to the World Bank Ease of Doing Business Report, imports take an average of 180 hours to clear customs while exports take 16 hours. The cost of documentary compliance is 10 and 5 times that of OECD countries respectively. The rest of sub-Saharan Africa does not do much better.

2. Infrastructure

Only 34 per cent of Africans has road access according to the AU. Transport infrastructure connecting African countries with each other is wanting. In 1970, the United Nations Economic Council on Africa came up with the idea of building a continent-wide road network to connect its biggest cities and ports. You know it as the Trans-Africa Highway. Only one of the 9 highways conceptualized was ever completed.

Overall, the infrastructure gap has caused logistics cost on the continent to be 50% higher than in Europe or the United States. African countries are increasingly investing in their logistics infrastructure but growth is still slow.

3. Barriers to entry

However, building better roads, getting rid of tariffs and streamlining customs is not enough to fix logistics in Africa. There is still a myriad of systemic issues that plague the logistics sector. Barriers to entry for new players are a good example. Logistics, especially in Africa is a capital intensive business. Regulation and corruption have also slowed down the growth of logistics on the continent.

The existing capacity of local logistics providers is not being fully utilized. Some routes are underserved. Often trucks carry a load that is less than their capacity over long distances. This makes economies of scale difficult to achieve keeping logistics costs high. Something else to note is Africa’s logistics sector is largely informal and fragmented further exacerbating the sector’s inefficiency.

However, technology might prove the key to solving this challenge. Sendy, for instance, takes advantage of the already existing capacity in the logistics sector. The online platform connects fragmented third-party logistics providers with businesses that need to move goods across East Africa. This eliminates the need for large capital investments in logistics by these businesses. It also enables logistics service providers to get more businesses and use their capacity fully.

African countries’ commitment to fully liberalizing trade will be essential if ACFTA is to realize its objectives. However, it will be more interesting to see what arrangements negotiators create to improve connections between African markets. Logistics will be crucial in creating an ecosystem for the potential of African trade to be realized.

Article by Glenn Ogolah

The legend of foo

From that day, they decided to label everything

You are walking down the street in River Road at 2 am on Saturday and you spot Foo. You might think you are too intoxicated having had fun all night. You are not wrong, you are stoned. And yes it’s crazy the person has their body parts labelled.

A little bit about FooFoo was the author of the famous engineering book Writing Documentation. Programmers followed the principles highlighted in the book by heart and at its peak, it was a bestseller. It postulated that everything is obvious. You don’t have to put signs on the road, people are intelligent enough to travel around in harmony. 

Legend has it that Bar got involved in an incident that changed their lives. From that day decided to label everything to prevent people from suffering the same fate. 

TL;DR? We recently documented our internal APIs to prevent the toaster from stabbing our faces.

Vehicle owners can now withdraw cash directly to M-Pesa

We have updated our platform to allow vehicle owners to withdraw money directly from the vehicle Sendy account through our Partner Portal. Previously, only drivers could withdraw money from the partner app. This will enable Vehicle owners to better manage their drivers as well as finances.

There are two phases to this new feature. The first is owners can withdraw funds from the partner portal directly onto their M-Pesa account. An owner simply has to use the following steps:

  1. Go to his statements page to view the amount of money earned by all drivers under his/her account
  2. Click the withdraw button. A pop up with the owner’s number will show up.
  3. Enter the amount you want to withdraw. Note that M-Pesa Transaction limits (Kes 70,000 per transaction and Kes 140,000 per day)
  4. Submit amount. A statement will pop up showing the amount and M-Pesa transaction cost.
  5. You will receive an M-Pesa confirmation message reflecting the amount you entered on your M-Pesa balance.

The second part of this new feature lets owners move money directly into their bank accounts. This feature allows owners to add up to 3 bank accounts to their Sendy account.

To add these accounts, you need to navigate to the Bank Accounts page and click on the add bank account button. To enhance security owners will receive a validation code on SMS to ensure it is them adding the accounts. All requests to add bank accounts have to be approved by our operations team first. Once approved, the accounts will be visible on a pop up when you are withdrawing funds.

To streamline the withdrawal process, we have separated the withdrawal days for different vehicles. Motorcycles will be able to withdraw funds from their Sendy accounts every Saturday. Trucks, Pickups and Vans will be able to withdraw funds every Friday. Trailers can withdraw their funds every two weeks.

By the Product Team

Partner open day 2019

We held our first ever Partner Open Day on Saturday 13th April bringing together hundreds of partners signed up on our platform at the Nairobi Show Ground. We held the event in a bid to celebrate and award Truck and Motorcycle drivers for the hard work done through the platform over the years, collect partner feedback and share our plans for the future. We also used the opportunity to engage Drivers on safety ahead of the safety compliance deadline for bodaboda(Motorcycle) riders set by the Kenyan Ministry of Transport.

We were joined by various partners including Galana Oil and Hino. Motorcycle drivers also received free service and cleaning for their bikes.

Speaking at the event, Sendy Founder and CEO, Mr Meshack Alloys said that recognizing their drivers and engaging them is part of the many initiatives they are doing to ensure that their drivers are in the know of company’s mission, vision and future plans. He noted that safety is key in ensuring that the logistics sector is formalized, being part of the reason he started Sendy.

“Our drivers are the backbone of Sendy. Recognizing their hard work is therefore very important to us. Through this event, we will be awarding our hardworking and dedicated drivers as well us reiterating the need for them to comply with safety rules ahead of the May 2019 deadline.

For one to qualify as a Partner on this platform they have to have a valid driving licence, certificate of good conduct and national identity card. They will also be required to undergo a rigorous onboarding session. They will then be logged in on the Sendy Partner app and allowed to make deliveries on the platform. Sendy also provides insurance coverage of all items transported through its platform while in transit.

Sendy strikes deal allowing drivers to own Hino Trucks

The move is to assist drivers who cannot afford to buy these trucks at once.

Sendy has entered into a partnership deal with Hino Kenya, the commercial vehicle division of Toyota Kenya, and Tsusho Capital to provide trucks to drivers on loan. This is in a move to enable more drivers to buy their own trucks to do business on the Sendy platform. Drivers who have worked on the platform for at least 6 months with a continuous track record and ratings of more than 4.5 stars will qualify for this deal.

The partnership is set to empower more Sendy Partners to grow their business and buy their own assets. As part of the partnership, a 10-tonne Hino truck will cost Ksh3.1 million, to be paid over 24 monthly instalments.

Speaking during the handover of the trucks at the Hino Showroom, Sendy managing director Mr Meshack Alloys said that Sendy is always looking for new ways to empower the drivers within the community. The platform has opened vast opportunities for drivers and partners. The move is to assist drivers who cannot afford to buy these trucks at once.

“We provide demand to any driver who comes to our platform through the Sendy app allowing them to make enough money effortlessly through technology. We are now empowering our loyal and hardworking drivers even more through this partnership. Drivers who wish to upgrade to bigger vehicle types or expand the fleet of vehicles can now do so. Our customers will also enjoy service from high-quality vehicles on Sendy,” said Mr Alloys.

General Manager Hino Division, Gerald Muli said the partnership will allow drivers to experience a truck that will enable them to conduct their businesses without any strain due to the durability and quality of franchise they are providing.

“We are happy to partner with Sendy and provide the drivers with a truck that has a rich history and offers quality, durability and reliability synonymous with the Toyota Group. Hino trucks have quality engines for optimal power output and unmatched fuel efficiency. Offshore and local tests have proven that Hino has the best fuel efficiency compared to other market offerings.

We will also offer training and after-sale, services to help drivers maximize on what our trucks have to offer,” he added.

Recently, Sendy partnered with Yamaha to train its motorcycle drivers on road safety, in an effort to reduce the number of road accidents related to motorbikes in Nairobi. Sendy has also partnered with over 5,000 businesses to provide demand to drivers among them being Chandaria, Bidco, Davis and Shirtliff among others.

Sendy Algorithms Oversimplified

A boy travelling back to school needs some good company on the bus. So after taking his seat he puts his backpack on the empty seat next to his and tells everyone whose company he wouldn’t enjoy that the seat is taken. As luck would have it, a girl he likes boards the bus. He picks up his backpack and puts it on his lap. When the girl nears his seat he gives her the most charming smile he could conjure. The girl sits next to him and as they say, the rest is history.

An algorithm is simply a set of rules followed in a problem solving operation.

That boy came up with an algorithm to get what he wanted. When ladies put on makeup or choose beauty products they follow an algorithm to give themselves the best look. When you follow a recipe for your favourite dish that recipe is essentially an algorithm. By now you have figured out that algorithms are part of our everyday lives. Surprise! You have been writing algorithms all your life!

An algorithm is simply a set of rules followed in a problem solving operation.

Computer algorithms are not that different. One key difference is that software engineers use code or programming languages to tell computers what to do. The same way ordinary humans (software engineers are not ordinary 🙂 ) use language to communicate procedures. Sometimes algorithms fail, just like makeups fail. But if we use the right processes this hardly happens.

Computer algorithms can be very complex. Because the problems they are meant to solve can have very many moving parts. In the same way when making a financial investment you have to keep in mind many market factors and handle many unforeseen scenarios. As engineers we always have to visualise so many connected parts of a problem. This requires good spatial reasoning skills, creativity, being systematic, thoroughness, the patience of a saint and if you are to avoid being a mental case, playfulness.

That is it for now. In another article, I will walk you through how we use Algorithms at Sendy. Stay tuned. 🙂

By Samuel Omondi, Developer

Sendy: Balance for better

We got some of the women of the Sendy family so they could share their experiences working in a tech startup in East Africa. Here is what they had to say. 

Malaika Judd, CFO

I love my job because Sendy is growing so fast that every year it feels like I’m getting an MBA. Every year, our growth rate goes up, the number of deliveries that we do, the size of the business, our reach regionally. Every year is a new challenge and I have to keep up. One of the challenges we have with equality in the workplace is how do we make sure we are not just equally split 50/50 male and female but that we are equal across different departments. Like, how do I make sure tech is not all male and customer support is not all female?

Actually one of our KPIs this year is to make sure we have more female developers. As the CFO and Co-founder for Sendy, one of my jobs is to raise money for the business. A challenge as a female cofounder is statistically it is shown that female co-founders raise less than 10 per cent of what male co-founders raise. That means that I have to hustle extra-hard to raise money for the business. Sendy makes my life easier because Sendy is like a family. Its fun coming to work. It is fun hanging out here. I know everyone here, if I have an issue, will step up to help me.

Sandra Buyole, Marketing Manager Merchant

I have been given the opportunity that women can also run the tech space and we are definitely going to take the next big tech company to the next level. I think the challenge we women face is having to work twice as hard to get recognized at our job. At Sendy, everything is very data-driven and it’s easier to show our work and successes. It reduces bias and subjectivity. There’s a stereotype that women in tech have to look a certain way. FOr you to pass to be a techie woman you have to have geeky specs on and sneakers. I feel at Sendy it is different because you can come to work looking amazing and gorgeous but still put in the work. It gives you the opportunity to be feminine without having to be stereotyped for you to fit in. As a mother of a 3-month old baby, I get flexi hours so I can still work and deliver without having to worry. I still have time to go home and take care of my child.

Mitchelle Korir, IoS Developer

I love my job because, for me, it feels like being part of a family. I would around people who care about my development. I think women face a number of challenges in the workplace. One of the challenges women face at the workplace is people trying to put you in a box that you’re supposed to do this or look like this for you to accomplish anything. People have opinions about what you should look like. For instance, as a techie, you should have baggy jeans which is not the case. People want you to fit into a box where there are some things you should not do. Women are not supposed to do sciences and leave the ‘hard’ things to the men. But I feel here you are free to be who you are. You are judged by your skills and what you can do.

If Sendy sounds like the place for you, then check out our careers pages. You could be exactly what we are looking for too.

Voice search and AI the future of e-commerce

The future of retail is no doubt e-commerce. With the growth of internet and mobile, it has become simpler for consumers to purchase goods at the touch of a button. Most retailers are waking up to this possibility setting up their own e-commerce website or signing up their businesses on existing e-commerce platforms such as Sky Garden and Masoko.

Right now you need to get online or get eaten. However, there is more to being online than simply being present. Here are three big trends we see shaping e-commerce.

  1. Voice search

When Apple launched Siri in 2011 it was a novelty. Talking to your phone and having it understand and answer you seemed like something straight out of a sci-fi movie. Now, virtual assistants and voice search have become a part of almost every new device. Google assistant and voice search is accessible to anyone with an Android smartphone. Amazon’s Alexa is millions of homes today. Google assistant can even make and take calls on your behalf now.

According to a sales report, in 2017, 40 per cent of millennials in the United States used voice-activated virtual assistants to look up products just before a purchase. According to Google, 20 per cent of search queries on mobile in 2017 were voice. The world’s only (or was that largest) search engine expects this to grow to half of all search by 2020.

While global statistics may not immediately translate directly into local statistics they are an indicator of the future. As it stands, being voice search friendly affects the SEO ranking of your website and it is not unlikely that Google will continue pushing this. Optimizing for voice search will a little different from normal SEO. Searches tend to be longer and inform of questions. Remember, people are having conversations with their devices. Most voice search queries were for local content. “Find me a restaurant” or “Petrol station.” It will be even more important to list your business with Google.

  1. Last mile logistics

E-commerce is simply the business of convenience. I want to get exactly what I want when I want it and where I am. This needs two components to work: trust and efficient logistics. The way things are set up now both have been hard to achieve. It is one of the main reasons e-commerce in Arica is lagging behind.

Getting products to consumers’ doorsteps is a challenge for a number of reasons. . First, is the lack of an addressing system? Think about, for most people, the streets they live in have no name. It is just a road somewhere in the middle of a large neighbourhood attached to another road. Imagine trying to give directions to a delivery guy using schools and transformers as reference points. It is hilarious but not easy.

Logistics in Africa is highly fragmented and informal. More than 90 per cent of the market is served by informal providers. You probably have a few motorcyclists or pickup on speed dial when things need to get somewhere fast. For most people accompanying stuff with the pickup is entirely natural. However, you can clearly there is a lack of trust in such a transaction. It is not unlikely that the driver might disappear or damage your cargo. Being highly fragmented also means that it is hard to find good Logistics Providers. The ones you do find charge high prices to cover their downtime.

Logistics is inefficient and there is little trust as a result. Many e-commerce platforms have tried to work around this by having fixed hubs where consumers can pick up their purchases. This isn’t really convenience though.

Fortunately, technology has the answers. All smartphones come equipped with GPS making it a lot easier to locate customers. Instant communication also helps link customers and drivers who would have otherwise never met. Sendy is a great example of last mile logistics fixing this problem. The service uses smartphones and the internet to link customers and drivers. It provides real-time tracking and insurance just to take care of the trust factor.

You cannot build e-commerce without last mile logistics. In fact, you can describe e-commerce as the business of getting goods to customers’ doorsteps without them having to physically be present when buying. It’s a business of convenience.

  1. Artificial intelligence

You are probably familiar with the Netflix series, House of Card. The first Netflix original, the show has AI largely to thank for its success. Before a single episode of house of cards had even been shot, Netflix committed USD 100 million to buy right for two seasons of the show. I’m a big fan personally but it was also a hit for most users of the platform. Eighty-six per cent of users said they were less likely to cancel their Netflix subscription because of the show. Why was Netflix so willing to take the bet? A deep learning AI algorithm predicted its success based on an analysis of most-watched TV shows.

Artificial intelligence is sales new best friend. AI can give your sales team the ultimate cheat sheet on what customers want. Using artificial intelligence, you can predict what products the customer likes, what kind of discounts are likely to work. AI tools can also help you forecast your sales more accurately. Machine learning techniques can also help sales teams identify leads that are most likely to convert. Many modern sales tools such as Salesforce and nudge already employ AI.

You have already encountered recommendation engines in how you see ads on social media or google. Most e-commerce platforms use recommendation machines, to tell you what others with the same interests also bought.

Chatbots are artificial intelligence programs built to communicate with customers in a personalized way. E-commerce home pages and apps have been using them to improve customer service but with social media platforms jumping onto the bandwagon, chatbots are set to grow at an exponential rate. This will make the technology more accessible to small businesses and e-commerce entrepreneurs doing running completely on social media. Telegram was one of the first to offer chatbots on its messaging app, enabling businesses to automate parts of their customer service. Zuku bot is a great example of this.

However, with most Kenyan e-commerce businesses east Africa relying on Facebook, Instagram and WhatsApp, Facebook’s entry into the space will have a more significant benefit for local businesses.  Already, Facebook Messenger’s chatbots are making inroad but many still are not so familiar with WhatsApp chatbots. Bots reduce the number of people you would need to man customer service lines, respond immediately to customers and help with fairly predictable queries.

Of course, e-commerce is still expanding rapidly, especially in Africa and it will be interesting to see how it shapes up in the coming year.

Article by Glenn Ogolah

Using actionable metrics to grow your e-commerce

Unlike vanity metrics, an actionable metric tells you what needs to be done so you can attain your goals. Actionable metrics provide a scientific way of determining what exactly to change to get a better result.

One of the best examples of this would be the results of an AB test. In an AB test, you use a specific variable to compare how two different alternatives improve your results. Let us say you have a landing page and are not sure what call to action to use on the button under the product. You could settle on two alternatives, Buy Now, or Buy here. The variable here is the call to action. You can use a metric such as clicks on the button for either alternative. You can decide instead to measure actual sales from each.

The click-through rate is an actionable metric because from measuring it, you can decide which Call to Action works best.

You don’t necessarily have to be comparing two alternatives but these metrics must be relevant to your goals. You can never go wrong with measuring changes in sales or conversion rate because ultimately, sales are why your business exists. Return on Investment, Churn, customer value are examples of other actionable metrics. You can also measure steps in the customer purchase process from the time customers are aware of you to the time they make a purchase.

There are a number of things that make it easy to spot actionable metrics:

  1. Focus on the ‘macro’ metrics. Ideally, your metrics should move you closer to business goals. These goals should be directly related to your business. Let us say you are measuring button clicks. If more customers click on one button more than the other but no one actually buys anything, then the experiment is a waste. A good Macro metric would be sales.
  2. Create simple reports. Fancy multicoloured graphs, spreadsheet and presentations are overrated. Keep reports simple enough that any user can look at it once and see what is needed. There are a number of useful ways to do this. Funnel reports summarize data according to your customer lifecycle. Any drop-offs are immediately apparent. Cohort analysis will help you compare different groups of users over the long term. AB test results are great for showing effects of short-term changes to specific variables
  3. Talk to people. Ultimately, metrics only get you are far as the actions of your consumers. Their motivations and reasoning are something else entirely. Actionable metrics should preferably be traceable to the people who generated them. If your funnel report shows that 100 out of 300 people signed up but did not make a purchase, you should be able to generate a list and get in touch. This is especially important for startups when qualitative information is important in improving the product.

There is a learning curve to this but it is absolutely necessary for getting value from your data. Once you get started, you will also get a better idea of what tools to use to get the right information from your data. Don’t get caught in the vanity metrics trap this 2019.

Article by

Glenn Ogolah.

Avoid the vanity metric trap this 2019

Not all data is born equal. With all the graphs and analytical tools available, one might be forgiven for getting carried away.

You’ve probably heard that data in the new oil. The whole world seems to be going nuts over it. Marketers want to understand their consumers. Customer service wants to get a handle on user experience. Finance needs to track efficiency. Logistics managers want to cut back on delivery time and cost. Every department is at least trying to use data to get better. More than ever, it is possible to collect and process massive amounts of data.

However, not all data is born equal. With all the graphs and analytical tools available, one might be forgiven for getting carried away. Vanity metrics are statistics that look good on paper but are in reality meaningless. More scientifically put, they are measures that show improvement but are unrelated to your business goals and mission.

A great example of a vanity metric would be web traffic. Let us say you are running a display ads campaign driving people to your website. Your website will definitely receive higher traffic. The campaign is a success, right?

Well, not really.

If your website is selling something, the traffic is not very relevant if your sales don’t change. If you are showing content, the number of repeat visits might be more relevant unless you plan to run search campaigns perpetually. Maybe you need more subscribers to grow the website audience?

How to tell if your metrics are vain

The most important thing to keep in mind here is context. Whether a metric is a vanity metric or not entirely depends on what success is for the business. In this situation, does measuring website traffic help you measure the effectiveness of your campaign? If your goal was simply awareness, then perhaps. If you are comparing different types of ads the metric could be useful. But for goals like sales, conversions, subscribers or actual web audience, you need to dig deeper.

There are multiple other examples of metrics that might be considered vain. The number of visits to a shop, likes on your Facebook page, visitors to your stand even number of customers. There is a simple rule to avoiding vanity metrics in your data. Ask yourself, will this information help me make better decisions in meeting my business goal? If the answer is no, then your just being vain. If the answer is yes, then you are on the right track with actionable metrics.

Article by Glenn Ogolah.