Lagos’s infamous back-to-back traffic can turn a simple trip to the grocery store into a time-consuming ordeal. This is one of the reasons, believes Raphael Afaedor, co-founder and CEO of Supermart.ng, that his online grocery retailer has been growing 15% month-on-month for the last two years.
Afaedor is arguably one Nigeria’s e-commerce pioneers. In 2012 he co-founded Jumia, the Rocket Internet-backed online shopping site, which he led for almost two years before leaving to start Supermart. Today Jumia is a market leader, selling fashion, electronics and homeware.
Supermart, however, is focused on online grocery shopping in Lagos. The company is currently making about 100 deliveries a day via its own fleet of drivers. It claims to be the largest online grocery store in Nigeria.
Drawing on his years of experience, Afaedor shares how Supermart’s model differs from Jumia’s –and what this can tell us about e-commerce in Nigeria.
Upfront payment versus cash on delivery
Because internet scams and fraud are prevalent in the country, many Nigerians have become distrustful of online payments. This is why, with Jumia, Afaedor and his team decided to allow cash-on-delivery as a payment option for goods.
With Supermart, however, he took a different approach. The online store delivers goods only once payments have been made online. Afaedor says that this reduces operational costs considerably as the cash-on-delivery option exposes e-commerce companies to insincere buyers and failed deliveries, wasting time and transport costs.
Consumers who have not paid upfront have little incentive to follow through with transactions in a timely manner – or even at all. Afaedor estimates that half of the customers in Nigeria who opt to pay cash on delivery do not end up actually buying the product.
“The drivers are then taught bad behaviours, because a customer that is not interested in receiving the product won’t tell the driver [this]… They tell him to wait. The driver will wait for 15-30 minutes and then start calling the customer. When the customer stops [answering], the driver knows they have to leave,” he explains.
“However, somebody who actually intended to pay for the product might tell the driver to wait for five minutes, but the driver then drives away thinking it is just another [dud delivery]. So it is almost like it leads into a downward spiral in terms of service delivery, where bad customer behaviour leads to bad customer experience because they are teaching the drivers bad habits.”
For this reason, Supermart’s policy of upfront payment goes hand in hand with developing a reputation for quality service that customers trust, says Afaedor.
Convenient delivery options
Supermart delivers seven days a week, between midday and 9pm. Customers select the delivery window period that most suits them, and deliveries can be made within three hours.
“The people who use our service are busy – they are professionals, homemakers and moms… A typical e-commerce site, for example, will call you and say they are coming [to deliver] now. We don’t do that – we use a very specific delivery window which you select, so that you will go about your day knowing that we will come at the specific time.”
Supermart’s shoppers can also pay a monthly delivery service fee, where they are charged ₦1,899 (US$6) once-off for multiple grocery deliveries for the month. Afaedor say this method is suitable for grocery shopping, which typically happens more frequently than buying fashion or electronics.
“Once or twice a month people do a big grocery shop, but the rest of the month they do all sorts of top-ups, like when they realise there is no more cooking oil in their house… So they come back regularly and it makes sense to have that subscription.”
However, a per-delivery service fee of ₦899 ($2.85) is also an option.
Using existing retailer infrastructure
While many e-commerce sites own warehouses – which need their own stock management solutions – Supermart has a much simpler approach. It has partnered with grocery retailers – which already store and manage stock – and simply deploys delivery personnel to go into these stores to collect groceries as orders are made. In this way, the platform leverages on retailers’ existing infrastructure (such as refrigerators and storage facilities) as well as their competencies in dealing with suppliers and managing inventory.
Supermart does have its own small deployment centre, however, where it stocks frequently purchased items. By having its own stock of these products, Supermart can reduce unnecessary trips to retailers for small daily purchases and deliveries.