Segway and similar transportation options for delivering groceries are increasingly being used in countries such as the US, where one in 10 millennials and Gen Xers shopped online for groceries in 2016 (up from eight percent and almost seven percent respectively, in 2014).
In Egypt, the trend is now gaining traction. Though the country may be enduring a period of blistering heat and agricultural hiccups, the popularity of having things delivered has helped set in motion a significant surge in grocery ecommerce solutions in major cities across the country.
Internet retailing is booming in Egypt thanks to the increasing number of fixed-line and mobile internet users. Many of the country’s existing store-based retailers have expanded their businesses by including an internet retailing option on their websites, presenting their products and even selling their products to customers.
Today, there are at least six grocery ecommerce platforms and apps in Egypt, from Knock Mart and Dakakyn to Goodsmart and Fakahany.
A nocturnal niche
Goodsmart is an online grocery market designed by brothers Amr and Rami Fawzi along with technical whiz Ahmed Sudan, to deliver items to customers in Sheikh Zayed, an affluent Cairo suburb, between midnight and 6am to avoid the heat and guarantee products freshness.
Clients order and pay online, then items are sourced, packaged, and delivered to the client’s address, where they are placed in a previously installed box.
At first, convincing people that deliveries at all hours of the night would proceed smoothly posed a bit of a challenge for the startup, which is now four years old. Yet, the Goodsmart team figured out how to allay potential customers’ concerns. “We designed an insulated, lockable, [and] completely heatproof box that is installed [on] each customer’s doorstep upon signing up for a Goodsmart membership,” Amr Fawzi told Wamda. The box and the membership subscription fees costs less than $80 per year. The startup has now 1,000 subscriptions.
The startup has the same selling prices as regular vendors. However, it makes incomes through deals with vendors to get the products at a cheaper cost, in addition to the subscription fees. It caters to an affluent market as the wealthy can afford the subscription, and only them live in compounds secure enough to install the boxes.
Reasons behind the success
After recently securing funding to the tune of $750,000 from Algebra Ventures, Goodsmart has stepped into the limelight as Egypt’s first automated niche grocery delivery platform.
Fawzi pinpointed the main reason for Goodsmart’s success. “If your family consumes one loaf of bread every single day, you have two options: either you buy one loaf a day or order seven [in one go] a week, so you are either compromising freshness and quality or time and effort.”
Enter Goodsmart. “Goodsmart was...designed for repeated purchases,” recalled Fawzi. “You have a standing request for one fresh loaf of bread and you wake up to find it at your door: what could be better?”
Fawzi doesn’t believe there are direct competitors for Goodsmart in the region, since the startup’s business model and high-end target clients are in his estimation entirely different from those of other companies.
Goodsmart has plans to cover the Egyptian market, prior to extending its services outside the country. Following the capital increase it got following Algebra Ventures’ fund, the startup is expanding its services beyond just grocery delivery. “Goodsmart is becoming within less than three months an online mall delivering everything from stationery to groceries and even fresh produce.”
Speaking of fresh produce
Fresh on the market is Fakahany, Arabic for ‘fruitseller’, a tech platform launched last spring, that aims at revolutionizing the growing, harvesting, storing, and delivery of fresh produce all over Egypt.
The brainchild of veteran entrepreneur and investor Waleed Khalil of investment firm Endure Capital and longtime friend Ahmed Attia, Fakahany isn’t merely about the delivery of fruit, but ensuring its quality and affordability.
The startup has several storage warehouses, and handles the transfer from the farm to the warehouse to the client.
Aiming for a hybrid model like that of Amazon Fresh, which combines physical stores and online portals, Fakahany focuses on optimizing all tech components as well as the lengthy growth-to-delivery process for fresh produce in a country plagued by poor agricultural practices.
“Since the top three focus points of the consumer are consistency, freshness, and affordability, Khalil told Wamda, “Fakahany’s tech solution cuts [out] all the middlemen in the logistics process to cut cost, and transfers produce directly from certified farms to guarantee consistency and freshness.” Though costs are not revealed, the startup is still testing the model and so far they have a lot of satisfied customers, according to Khalil.
As they aspire to cover all market segments, including tech-savvy clients, and those who prefer the brick and mortar model, Fakhany will soon launch its signature outlet in Sheikh Zayed.
Fakahany is also planning to open more branches in other districts of Greater Cairo to make its fruits and veggies widely available to consumers. “I estimate Egypt consumes 150 billion Egyptian pounds (over US$ 8.3 billion) worth of fruits and vegetables, so there is definitely space for technology to enter this arena,” said Khalil.
For him, the future is promising. “Every single doctor recommends more fruits and veggies in one’s diet,” he pointed out. “Fakahany applies technology to cater to every single mobile-enabled Egyptian looking for healthy fresh produce on a daily basis.”