🎁 Doubling SA E-Commerces' Customers
Bit of a jolt? It’s official, scientists have found the sizzling secret to building muscle and getting ripped: You have to give yourself electric shocks while training. So, who’s starting SA’s first electro gym?
In this Open Letter:
- Last-mile magic: Helping double SA e-commerce customers.
- PnP’s data leak, Trump saves TikTok & nomading to CT.
- Building smart: The right time to involve a lawyer in your plans.
- An SA startup clean sweep: The poll results are in.
- Short on ideas? Share this and get 100+ SA startup ideas.
Together with:
Did someone forward you this email? Join {{active_subscriber_count}} South Africans reading The Open Letter by signing up here.
TRENDING NOW
Helping SA E-Commerce Double Their Customers
In today’s Tuesday Deep Dive, we examine the impact of inefficient deliveries on e-commerce margins and an innovative startup using algorithms to optimise routes and make deliveries cheaper than ever. Let’s go…
It felt like it took forever and then it happened. Covid was the catalyst that finally made SA e-commerce accelerate towards its potential.
It started with optimised home food and grocery deliveries, followed by other products. These products greased the country’s e-commerce wheels, making people much more comfortable shopping (and, most importantly, paying) online during lockdown.
In 2023, SA’s online shopping sector hit R71 billion (a 29% increase from the year before), and it’s expected to reach the R100 billion mark as soon as this year.
And consumers and retailers alike love the convenience of home deliveries (not to mention the sales it brings retailers). In the 2nd half of 2023, Shoprite Checkers’ Sixty60’s sales grew by 63%, Pick n Pay’s online sales grew by 76%, and Woolies grew by 47% in online sales.
Not to mention the sheer number of delivery drivers on bikes and other delivery vehicles zipping around the highways and byways of SA. Some say there are over 50k lightweight delivery bikes alone, with this number predicted to double by 2027.
What makes up a delivery?
With SA’s average e-commerce spend around R430, and an average delivery fee between R50 and R80 per order, roughly 15% of a transaction goes to delivery costs.
And with the retailers offering free delivery when you spend over a certain amount (for those that do it’s around R500), this % drops ever so slightly.
Interestingly, about half of SA’s online shoppers would prefer the cost of delivery for their items to be part of the cost of goods – so retailers are having to pick their battles carefully.
So, how do you maximise what you can get out of that delivery fee?
Well, a delivery has various parts that make up its cost but by far the most expensive is the salary of the driver (hence the major investment in self-driving vehicles and drone deliveries globally – but that’s a story for another day).
If a single driver can deliver 11 parcels a day as opposed to 10, that’s almost a 10% saving in delivery cost per delivery. Crazy.
But just how can one deliver more with the same people, same equipment, same traffic?
Using intelligence, live traffic data, historical patterns and a rules-based engine, driver delivery routes can be optimised to ensure maximum deliveries per day, while still maintaining the quality and service standards of the retailer and courier company to maximise your delivery efficiency, and minimise your cost.
Powering some of SA’s biggest last-mile deliveries…
Loop is a local delivery management platform powering the delivery capabilities of some of SA’s biggest delivery players: OneCart, The Courier Guy, Pingo (the team handling Checkers Sixty60), Nandos, and more.
The cloud-based delivery platform manages your deliveries (sans driver) from business to driver, to customer; all in – as the name suggests – a loop, providing route optimisation, and real-time driver tracking and performance metrics, so that both the business and their end customer know where the goods are at (125 metres at a time).
Loop makes trips more cost-effective, shorter, and efficient using intelligence. And shorter trips mean less money spent on delivery, etc.
We chatted to Loop’s founder, Kimberley Taylor, who explained she’d been writing an algorithm to solve “The Travelling Salesman Problem” (a math problem of finding the shortest route between several points without crossing the same point twice) in 2016 when she noticed a whole host of inefficiencies in the space and developed the Loop ecosystem to work on 3 key components:
- The business has a web-based platform giving it visibility on orders, drivers, and the various statuses of the delivery. All of Loop’s intelligence magic like route optimisation and planning sits on this side.
- Drivers access either an Android or iOS app to receive their orders/deliveries, get delivery details, submit delivery proof, use a sign-on glass feature, etc.
- Lastly, the end customer has a web-based tracking page to see where their order is and when it’s set to arrive. With Loop’s API, they’re able to make it so that tracking info can be embedded directly into the business application for a seamless customer experience.
The impact? Loop tries hard to make itself accessible to smaller companies (16 deliveries/tasks per day) as well as the big guys. It helps most businesses increase their average delivery volume by 30%, reduce travel distances by 20%, and serve twice as many customers every month. Nice.
With the big e-commerce players doubling down on the local market, more retailers wanting a piece of the pie, and solutions like Loop driving intelligent innovation in deliveries, we’re watching this space…
CHECK THIS OUT
The Right Time to Involve a Lawyer
A Harvard Business School study found that startups that seek legal advice are 4 times more likely to succeed than those that don’t.
And, if you are raising funding (now or down the line), a National Venture Capital Association (NVCA) survey says 90% of VCs take a startup’s legal preparedness very seriously when considering investment.
The reality is most founders and business owners avoid involving lawyers because they assume it’ll be too expensive. But not all legal services should cost you the farm.
Dommisse Attorneys have been helping South African startups with:
- MoI’s and shareholder agreements – helping to navigate co-founder and shareholder relationships.
- Offshoring IP and setting up abroad to make it attractive for foreign investors.
- Sale of shares and fundraising – get a great team on your side to help you avoid blind spots and protect your interests.
Need legal advice for your startup?
Get in touch with Dommisse Attorneys today to explore how they can set up your startup for success.
IN SHORT
Strike up a conversation…
🐺 Funding the Wolf. Local crowdsourcing security platform CommunityWolf raised $100k from Baobab Network. ICYMI, we recently covered them in a Fast Five Friday segment here.
👩💻 Mother City Nomads. Cape Town is gearing up to host digital nomads and industry leaders from around the world at the first Nomad Week from the 9th to the 15th of March as it looks to position itself as the leading remote working destination. What a great way to introduce more lekker people into the startup ecosystem.
🕺The 11th Hour. TikTok’s services in the US have been restored after a (very) brief ban on the eve of Donald Trump’s inauguration. It seems like The Don may be responsible for getting the short video-sharing app back up and running, saying that it’s important to save TikTok as it saves jobs and businesses. But will Trump’s Gen Z haters change their mind on him now he’s restored their precious TikTok?
✂️ Swooping In. On Sunday, as CapCut (ByteDance’s video editing app) was getting booted off the App & Play Stores, Meta announced its very own video editing app, Edits, set to launch in Feb on iOS and later on Android. Gotta wonder if it’ll head the same way as Threads if the CapCut ban gets resolved by Trump…
🥸 Leak n Pay. Claim Expert, a company local retailer Pick n Pay used to renew vehicle license discs for its customers between 2022 and 2023 has apparently had over 56’000 PnP’s clients’ data leaked on the dark web after a “potential information security incident” that happened on 18 July 2024. Data includes names, surnames, ID numbers, cellphone numbers and email addresses. Eina.
🎯 The Stack. Founders need trustworthy tools and suppliers. Our Founder’s Stack includes an easy-to-apply R5M business facility from Lula, next-level authority building with Stream, and loads more vital startup tools and services.
BUILDING TOGETHER
Happening over at The Open Collab
In the last few days alone, in our online community, we…
- Had another incredible Sales session with Sebastian 🤯.
- Celebrated a successful funding round with Priaash, Estelle and Shaziah!
- Helped Jo spread the word that they’re hiring.
- Discussed the efficacy of network-building on LinkedIn VS in-person, or a bit of both…
- Gawked at Gustav’s text-to-speech & AI voice generator.
- Helped Andy source a host of awesome notetaker options.
- Welcomed so many new members, it’s starting to hum in here… 💃🏻🕺🏽
Thinking about joining The Open Collab?
- Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
- Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
- Join all our online and in-person events for free!
- Exclusive 1-on-1 sessions with startup consultants.
SA’s only dedicated tech startup and scale-up founder community.
HAPPENING SOON
Upcoming Events
24 January 2025 — Chat Roullete: Get to know some of the coolest founders in SA at the collab’s exclusive members-only jam session — exclusive to members of The Open Collab community.
31 January 2025 — Fundraising 101 — AMA: We’ve invited founders and teams who’ve recently raised funding to give you the ins and outs of securing investment —exclusive to members of The Open Collab community.
View all our upcoming events here.
WHAT YOU SAID
A clean game…
We gave you a riddle last Friday and asked if you recognised the startup — and, yeah, most of us know Sweepsouth…
🟨🟨⬜️⬜️⬜️⬜️ OfferZen (25%)
🟨⬜️⬜️⬜️⬜️⬜️ Sorbet (17%)
🟩🟩🟩🟩🟩🟩 Sweepsouth (58%)
Your 2 cents…
Lekker to have you here, Cheryl! 🎉
He he, ours too… ❤️
Nice one! Upward and onward 🚀