Why Global Delivery and Logistics Startups like Glovo, Swvl are Coming to Nigeria

Why Global Delivery and Logistics Startups like Glovo, Swvl are Coming to Nigeria

Glovo, a Spanish delivery startup, is expanding into Nigeria in few months, TC Daily notes. Glovo which has raised a total of $346 million with the last round of $169 million this April 2019 competes with Delivery Hero. As Glovo arrives, Gozem from Singapore is also coming even as many local players are getting ready. Simply, logistics is going to be the sector that will deliver the highest number of winners over the next few years in Nigeria; you can add fintech also. Yes, logistics is supply chain, and supply chain is commerce.

The firm has announced it’s setting up shop in Nigeria and Ghana in a few months after setting up successfully in Nairobi, Kenya. Like Glovo Kenya, food delivery will be Glovo Nigeria’s key product for its first few months of operation.

Nigeria is an interestingly important market for anyone who wants to conquer the continent. With a population of over 200m and counting, Nigeria is like a small India or China, or a mix of both. India and Nigeria have massive populations which are good for its labour force and customer base. Glovo needs Nigeria to succeed in Africa. Glovo is now the most downloaded food delivery app in Kenya and its once major competition Sendy, sees food delivery as a very small fraction of core B2B business.

For Nigeria to thrive in the ecommerce sector, logistics must advance. Entities like Glovo and Gozem will first do well before we can have serious penetration in the ecommerce sector. These companies understand that they will be connecting the pieces, and that is why Nigeria is very exciting in this space. Along with the local peers, they will emerge as the postal services.

From Uber Eats to equivalent of Bolt, we will see many elements of companies plugging into intra-city delivery and logistics, not just for ecommerce firms but any sector. Matatu is using keke (tricycle) to play the last-mile game. I expect Gokada, the motorcycle ride-hailing startup to have a division for logistics in coming months.

As Glovo arrives, Cairo-based transportation startup Swvl is also making Nigeria home.

Swvl will be launching in Lagos by mid-July with 50 buses initially, a Swvl representative confirmed, in a conversation with MENAbytes, without sharing further details.

Nigeria will be the third country for Swvl to launch its services after Egypt and Kenya. Some previous reports had also suggested that the Egyptian startup is looking to expand into Uganda but there was no confirmation. The startup last year had said that it plans to be in seven megacities by the end of 2019 including many in Southeast Asia but has apparently changed its plans to focus on Africa for now.

Founded in 2017 by Mostafa Kandil who was previously with Careem, Ahmed Sabbah and Mahmoud Nouh, Swvl that connects commuters with private buses, allowing them to reserve seats on these buses and pay the fare through company’s mobile app, is currently available in Cairo, Alexandria & Nairobi.

SWVL bus

No matter the format or style, all of them are collectively pursuing two connected things: reduction of marginal cost for companies and simplification of transportation for citizens. Those are the main frictions in Nigeria where there is neither a functioning public postal service nor an efficient public transportation system.

They are coming, and they have a reason – Nigeria is the largest country on earth, by population, with the highest logistical marginal cost paralysis. Add human mobility, you will get the picture.

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4 thoughts on “Why Global Delivery and Logistics Startups like Glovo, Swvl are Coming to Nigeria

  1. Great post. There is no doubt to the enormous opportunities in Nigeria. I am beginning to think how can I as a supply chain profesaional take advantage and help scale down supply chain cost for organisations.

    I will be following up from here.
    Regards,

    Reply
  2. Curious to know whether Swvl Nigeria would provide intra city or inter city transport services. Indeed Nigeria is very exciting at the moment and I only see it getting better and better.

    Reply

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