Start-up: Foodstantly, Nigeria
Foodstantly is a Nigerian online marketplace where users can buy and sell pre-cooked food and fresh farm produce. The company then acts as the means of delivery for all goods purchased.
The platform hosts a variety of sellers (over 1000), formal and informal; they include open-air markets and smallholder farmers to restaurants and fast-food outlets.
Founder Uche Ariolu provided us with an overview of the business and highlighted some of the challenges of running an e-commerce business.
1. Give us your elevator pitch.
One of our goals is to reduce or eliminate the multiple middlemen in the agriculture and food supply chain. These middlemen contribute to the high cost of food and farm produce in most African cities. An average food item passes from the farm gate through three to four middlemen, each adding their own cost.
The food and agriculture chain in Africa is also highly fragmented, made up of several small and medium players scattered across a city or country.
Our solution solves all that by aggregating all the open-air markets, farmers, grocery shops, eateries and food vendors or manufacturers in one single platform. And further provides them with all the technology and support to sell and reach more customers online.
For the sellers we provide a free online store front, and payment integration (card, banks, pay on delivery and online payment for each shop). Also business solutions, a dashboard to manage their stores and track orders, customer support, SMS integration for taking orders, online ordering system, delivery system, and more customers. The buyers can use their phones or computers to discover any food item or farm produce, regardless of location, within Nigeria.
Right now we are focused on the local market but expanding across Africa and the Middle East is within our middle-term plan.
2. How did you finance your start-up?
We bootstrapped up until now, however currently we are seeking investment.
3. If you were given US$1m to invest in your company now, where would it go?
The first thing is to engage in aggressive marketing using channels that work for us. We will hire more talent, increase our reach in Nigeria, acquire more sellers and buyers, expand to other countries, and of course boost our delivery/logistics system.
4. What risks does your business face?
We face the risk of lack of funding. Believe me, you cannot scale fast or run an e-commerce business to its full potential without funding. Regarding the operational aspects, people are still distrustful of online business or online shopping in Africa. However, the payment on delivery model helps to alleviate this hesitation to an extent. Equally, we face the risk in logistics, which plagues all e-commerce business. However, we have learnt a lot, and have strategies and models to tackle these or at least reduce their impact.
5. So far, what has proven to be the most successful form of marketing?
Direct marketing, referrals and social media. Nothing beats a good referral; referrals are the cheapest form of marketing and, in my opinion, retain more customers than if acquired through other means. Also we get numerous customers and enquiries from our social media platforms. We have also noticed direct marketing by our sales team is proving very effective. When you are small and running on a low, even no budget, you have to look at the marketing approaches that work for you. These work for us, but we are still evolving.
6. Describe your most exciting entrepreneurial moment.
We have had a few. One was when someone called us from Ghana, another from the UK, and another from the UAE (United Arab Emirates), to place orders for a large quantity of a food item here in Nigeria. Another was when we got a very large order from a customer who was referred to us by a very satisfied customer. And thirdly, when we were placed among the top tech start-ups in DEMO Africa 2014.
7. What has been the biggest mistake you have made in your start-up, and what have you learnt from it?
Initially when we started, we made some mistakes with regard to hiring. We learnt that you need to hire right, and surround yourself with people who share your vision – and are ready to go the last mile with you.