February 10, 2015
Open air food markets in Nigeria are often bustling with crowds and a variety of offerings. Nonetheless, retaining customers is still a problem for vendors and farmers, according to lawyer Uchay Ariolu, founder and CEO of online food marketplace Foodstantly.
The website which allows restaurateurs, farmers and market vendors to build client bases also provides ordering services for consumers who want to source food that is ‘ready to cook’ or ‘ready to eat.’ Fast food services and caterers can also create a profile on the site, where the basic requirements are to have a mobile phone and a legitimate address.
Though many food sellers have found their way to Foodstantly’s online marketplace, there are some farmers who have not transitioned to digital point-of-sales. This hasn’t stopped Ariolu from finding them and putting them directly in front of potential customers.
Locking Down Reliable Food Sources
“We had to meet them one-on-one. We physically meet sellers to sign them up and show them how it works. These people are still not sure that business can be transacted online and that payments can be received online,” Ariolu told AFKInsider, stressing that it is “imperative” that he and his team get to know and give assurance to apprehensive vendors.
“We have a growing number signing up to sell on our platform without our meeting them….With time we shall have more sellers who sign up online than those we physically meet,” he said.
For Foodstantly — which earns money through website commission sales and fees charged upon delivery — buying from farmers, sending products to sorting centers, then selling directly to customers is a revenue model that makes sense and keeps expenditures for farmers within a tighter realm.
“We help the farmers sell direct to consumers and at a very reasonable rate,” he said.
This method is also most profitable.
Getting Things Cooking
Shopping for food in Nigeria, Ariolu said, can sometimes be a hectic, inconvenient process. While some open air markets are disorganized, Foodstantly interjects the highlighted online options to buy in bulk, buy from farmers, order from a restaurant or caterer, buy from a trader or market — and of course to purchase ready to cook/eat meals.
Knowing that some customers have to deal with horrible traffic and commuting long distances just to get to Lagos’ Oyingbo, Mile 12 or Oniru markets helped Ariolu and his team foster relationships with food traders.
And while the company is in the early stages, Ariolu believes that he’s latched onto a revenue model that he, traders and farmers can appreciate. The online crossing of buyers and sellers is Foodstantly’s strong point as layers of middlemen are cut out of the equation.
“In Africa there are several chains of middle men in the food supply chain. These middle men add costs to food. Each adds their own cost — by the time it gets to cities or to the end consumer it becomes expensive,” Ariolu explained. “Also most farmers — since they can’t access consumers — are at the mercy of the middlemen who give them peanuts for their produce.”
Pushing Business For Other Food Startups
He noted that through his company, farmers view their products as the backbone of a “money making venture,” instead of a struggling agricultural enterprise. By taking advantage of the product management, tracking and discount features, sellers have the opportunity to grow their businesses without creating additional websites or delivery services.
According to a Business Monitor report, Nigeria’s grocery retail sales were projected to experience a compound annual growth rate of 38.7 percent between 2013 and 2018. Many restaurants and commercial businesses that count on the country’s grocers fall in line with Foodstantly’s marketplace model — which gives participating vendors further promise for growth.
As Foodstantly is an online business, continental and international expansion depends on a solid technical team. As of now Ariolu’s priority is gathering up more ICT business partners, a task he says is surprisingly difficult.
“It’s actually hard getting skilled manpower who understand how an ICT startup works, especially in the nascent ICT Industry in Africa.”
Launching last year at DEMO Africa, Foodstantly was chosen as one of the top 40 most promising startups in Africa. Describing himself as a serial entrepreneur, this isn’t Ariolu’s first venture. He also dabbled in the entertainment industry founding Ticket My Pal.
A larger interest and concern over the trouble and price hikes farmers face when trying to get their products to markets pulled Ariolu back around to the food industry.
“I have been in the food industry for a long while and am passionate about it. I noticed the difficulty people experience in accessing food,” he added. “There is need to disrupt the way Africans buy and sell food and farm produce. Food is a universal basic necessity of life — so food has initially been the product.”
Source: AFK Insider