Guest Articles

Wednesday
January 5
2022

Nikhil Goel

From People to Packages: How a Nigerian Ride-Hailing Business Weathered the Pandemic by Shifting to Last-Mile Delivery

The effects of COVID-19 lockdowns and reduced disposable income have impacted business around the world, and arguably none have been affected more than companies working in consumer-focused sectors in Africa. The sector includes businesses ranging from food vendors to clothes retailers and other consumer goods providers, and as the pandemic has forced people across the region to avoid shopping centers and other crowded public spaces, these companies have faced grave challenges. This has exposed the urgent need to create and adopt a digital-first approach to work, shopping and other aspects of daily life in African countries.

Here in the continent’s largest economy, Nigeria, some of the greatest COVID-related challenges we’ve faced have been the ad-hoc regulations and constantly changing restrictions implemented to fight the pandemic. It can be hard for consumers to know which stores are open, what restrictions to expect and what goods are available. This has fueled overnight pivots into e-commerce for many small and medium-sized enterprises (SMEs) in the country – and Nigeria is not alone. In the global e-commerce sector, Visa has projected that sales will reach $7 trillion by 2024, while Nigeria’s sector is expected to achieve a market volume of over $12.4 billion by 2025.

As an immediate solution to bridge the gap between business offerings and customer needs, thousands of entrepreneurs and SMEs across Nigeria have stepped into this new realm of e-commerce. For many enterprises this pivot has included last-mile delivery, creating exponential growth in the space despite the economic headwinds caused by the pandemic. Driven by fashion and food delivery – two of the most popular sectors when it comes to online shopping in Nigeria – e-commerce and last-mile delivery are on course to outpace many sectors within the country over the coming years.

 

Transitioning from Ride-Hailing to Last-Mile Delivery

Gokada was created to make the lives of Nigerians safer and simpler while traveling, and we had established ourselves as a key player within the country’s ride-hailing industry prior to the pandemic. However, just as we were gaining momentum in the industry, we were impacted by the motorcycle ride-hailing ban that was implemented in Lagos, while also facing the knock-on effects of other COVID-19 restrictions. Like many companies, the pandemic forced us to recalibrate our priorities and evaluate the most important factors for business continuity.

Fortunately, our team’s resilience meant we were relatively well-prepared for the challenges the pandemic threw at us. And we knew that there was more we could offer our Nigerian customers – including small businesses. So in response to the combination of social distancing regulations and the state-wide ban in Lagos, we pivoted from the ride-sharing services we knew and were excelling at, to something new: last-mile delivery. Executing the transition and diversification into last-mile delivery wasn’t easy. But with most of the technology infrastructure and driver networks already in place, along with our team’s commitment and hard work, we were able to offer essential last-mile solutions to existing and new clients.

The key to this transition was that we could apply the same business model to build our new offering. With a new focus at the front of our minds, Gokada went from delivering passengers to delivering packages, and within less than a year we have been able to service tens of thousands of SMEs whose businesses were otherwise threatened by lockdown restrictions. By providing a high-quality delivery service that enabled business continuity for Lagos’ SMEs, we were able to ensure that even those without an online presence were able to remain agile and competitive within their respective industries. (We also shifted our ride-hailing services toward other markets outside of Lagos – these services are upcoming in other Nigerian cities.)

By leading our operations with a clear vision and by keeping our customers front of mind, we have been able to complete over 2 million food delivery and e-commerce orders on behalf of over 30,000 merchants since our pivot in 2020.

 

Adapting to a Shifting Business Environment

Adaptability is key to any successful business. However, a company cannot adapt effectively without listening to its customers, noticing behavioural shifts – and keeping up with industry and regulatory changes. In Nigeria, as mobility services stopped and states enacted lockdown measures, rates of internet penetration accelerated and mobile data usage increased. People began to look for fast and simple ways of continuing with life despite the restrictions. As a company, we harnessed this surge of demand and were well-placed to reach those SMEs that were in need of a provider to be the last connecting link in their supply chain.

Technology companies facilitating and “owning” the last-mile delivery market is becoming a global trend, and to differentiate ourselves, we knew we had to lift our delivery services to the next level. To do so, we listened to what our customers needed and acted. Last June, we launched our super app to reinforce our commitment to providing Nigerians with access to seamless, efficient and hassle-free last-mile delivery experiences through one streamlined platform that combines food delivery and logistics.

 

Learning the Business Lessons of the Pandemic

As digital payment and e-commerce technologies are expected to continue to grow in Africa – fueled by the challenges of the ongoing pandemic – running a successful business on the continent is a matter of being customer-centric and keeping a finger on the pulse of societal change. Where some companies may have given up, we were able to react quickly to COVID-19’s changes, recognising the gap in the market, then repurposing our existing business model and pushing forward. By being nimble while keeping our focus on remaining a key tech-enabled transportation platform within the country, we’ve emerged from the pandemic with a new business model based on providing essential last-mile logistics solutions to both businesses and consumers – despite facing a number of hurdles along the way.

Many lessons have been learnt on a global scale as a result of the pandemic, and despite the challenges, a number of businesses have been able to thrive and grow. As we transition into what is now the new normal, and as restrictions gradually ease, businesses now have the chance to learn from the lessons of COVID-19 and optimise their solutions to cater to the new, digital-first customer – not only in Africa but around the world.

 

Editor’s note: This article is part of NextBillion’s “Recovery” series, which explores how businesses, development initiatives and the communities they serve in low- and middle-income countries are building greater resilience for a post-pandemic future.

 

Nikhil Goel is CEO at Gokada.

 

Photo courtesy of Soki Briggs.

 


 

 

Categories
Coronavirus, Technology
Tags
coronavirus, distribution, e-commerce, mobile data, mobility, pandemics, small business, SMEs