Sami Al-Helwah took his time to enter the Saudi retail market with his Nana Direct grocery shopping application. The young Saudi entrepreneur carefully studied the market and its needs, with the help of his two partners Ahmed Al Samaani and Bakr Al Sharif. Together, they researched for 18 months, tested everything from customer engagement, to user experience when buying groceries online.
Nana Direct wants to provide a full online grocery service, from diversity of payment methods to scheduled deliveries. But the logistics behind it are rather complicated.
With a business model based on the sharing economy, Nana has three apps that work simultaneously. One is for grocery shoppers on both Apple and Android. The second is for online store owners, allowing them to monitor the sale of their product and update them. And the third is for delivery team who take the orders to the customer.
“Nana Direct depends on freelancers that are looking for an extra income. The customer orders groceries from one of Nana’s online stores. The order goes to the shop owners app where the products prepared. Once done, a notification is sent to the delivery team that will deliver the groceries to the customer’s house and get paid in cash or through mobile payment,” said Sami Al-Helwah.
In order to avoid issues, such as buying rotten products or delivering wrong ones, “those who want to work with Nana, take part in a training program on standard quality requirements. Based on the evaluation at the end of this program, they are divided into those who prepare orders and those who deliver them. Some of them may do both exceptionally,” he added.
Nana Direct makes money by taking a cut of the product cost and delivery charge. The delivery team gets a percentage from each successful delivery, while those who prepare the orders get paid per hour.
Challenges and fierce competition
The first challenge Nana faced is the culture of the Saudi community, where only the husband usually buys the groceries. Al-Helwah plans on changing this culture and making the process “simple, fun and smooth” through ecommerce.
Choosing which city in Saudi to launch in first, marketing, and pushing people to use the app were the hardest parts to do, according to Al-Helwah.
In then end, the founders chose Riyadh to be the first city they launch in. Their choice was based on the city’s strong purchasing power and large population, despite fierce competition from well-known brands like Carrefour, Danube, Othaim Markets and startups like To Doorstep and Salatty.com.
Ecommerce platform Souq.com recently announced entering the grocery business through Souq Super Market.
Al-Helwah believes competition is a positive factor for the future of the company. But this competition may be what stopped the founders from disclosing the details of the investment deal they received.
“We prefer not to disclose this information especially in this critical stage of the investment. What we can say, however, is that we are in talks with more than three entities for the next investment round,” Al-Helwah said.
Nana Direct was worth more than 20 million Saudi riyals (US$5.4 million) in 2015, said the founder of Rqmnh, Yazeed Altaweel, in a talk about food apps which Al-Helwah took part in.
Scaling to new cities
“Nana Direct’s saw a rise in downloads by 30 percent these past months,” said Alaa Saqer, the company’s program manager. He added that the current number of users is at 30 thousand users, with more than 190,000 downloads.
Nana Direct is planning on scaling to new major cities in Saudi Arabia after covering 80 percent of Riyadh.
Passion from the start
Al-Helwah’s journey started in high school when his math teacher introduced him to programming. They started a computer maintenance shop together. Though it soon failed, that did not stop him from building a program to help the Saudi national passport office staff.
Al-Helwah developed the first Arabic search engine he called Dook. He then started Exahost for hosting websites. In 2009, this company had five thousand websites from the private and public sector.
Considering the small size of the hosting service market, this young entrepreneur wanted to work in a bigger market. He had his eye on the Saudi retail market that was estimated for 75 billion Saudi riyals (US$20.3 billion) in 2015, and that was when Nana Direct was born.
Feature image via Nana Direct.