Kenya’s Copia plans to expand e-commerce in Rwanda, Tanzania

The company’s business model is determined by population density, which makes the Lake Victoria region the next logical step, says Steele from Nairobi. Copia, already present in Uganda, is also interested in West African markets like Nigeria, Ghana and Ivory Coast, as well as South Africa, he adds.

The speed with which other sizes are reached in Kenya and Uganda will determine how quickly Copia opens up new East African markets, says Steele. It is “very possible” that entry into Rwanda and Tanzania will take place in 2022, subject to the progression of Covid-19, he added.

Copia’s model aims to extend the availability of e-commerce to people who do not have internet access. This is done over a network of 30,000 agents, often shopkeepers and local grocers who have product catalogs and can place orders online. Copia says that 77% of the agents are women. According to the company, the commissions it pays increase their income by more than 30% and increase traffic to their stores by more than 25%.

Africa has approximately 750 million potential middle to low income consumers who have been poorly served. According to Steele, Copia can serve these types of consumers profitably and with an urban level of service. The company can deliver anything that can be bought in the supermarket or building trade, he adds. Steele contrasts Copia’s approach with that of Jumi, which he describes as the “Western e-commerce model” aimed at middle to upper income groups.

Customers can also place orders online, by phone, or through USSD messages. The expenses for Last mile delivery are reduced for Copia, as the customer usually goes to the agent to pick up the goods. Returns make up less than 1% of purchases, says Steele. That is because he sells essential goods to people with modest incomes.

  • Price awareness has become even more important during the pandemic. “People don’t buy speculatively. They know what they want and buy carefully. “

Warehouse logistics

The company was founded in 2013 by Tracey Turner, the chairman remains, and Jonathan Lewis. Steele joined in 2017. Investors include the Bill and Melinda Gates Foundation, that Mastercard Foundation Fund for Rural Prosperity and the Savannah Fund. No single investor has a majority.

Copia has 1.2 million unique customers and has generated enormous amounts of customer data that it can share with agents, says Steele. The company has a 6,000 square meter warehouse north of Nairobi. As Copia enters new markets, it will use new dedicated warehouses, he adds.

  • Agents have benefited from this ability during Covid-19 because they can wait for deliveries instead of trying to source goods themselves in crowded markets, Steele argues.
  • Copias Unified economy is profitable and it’s nearing break-even, he adds.
  • The business has to hold up Raise funds in the medium termsays Steele. The most recent investment will likely be limited to certain markets and will likely be a mix of debt and equity.

Bottom line

Copia sees agent networks as a way to crack B2C e-commerce across Africa.

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