How transformation of African postal services help Jumia in last-mile
Apoorva Kumar of Jumia recently laid out the story of how they collaborated with Egypt Post, Ghana Post and Kenya Post.
Postal organisations across Africa are transforming into logistics firms for the last mile deliveries. While building on their strengths like proximity to people, governments and presence, they are becoming more customer-centric, IT savvy, willing to adapt and ready to collaborate with private companies. The leading African e-commerce marketplace Jumia can bring this transformation into perspective.
Jumia announced two important partnerships in April 2022. First with the courier giant UPS and second with one of the biggest Chinese logistics companies 4PX. The common element among the two partnerships is that both UPS and 4PX will use the last mile infrastructure and capabilities of Jumia in Africa which shows the marketplace's ability to move shipments to the hinterland of the African continent. Present across 11 markets with more than 3000 pickup points, 700 to 800 partners other than its sellers use this network to move goods. But what powers Jumia's last mile deliveries. One of the recent answers lies in their collaborations with postal authorities across Africa.
Apoorva Kumar, EVP Group supply chain and cross border business, Jumia recently laid out the story of how their cross border e-commerce logistics evolved since he joined the company in 2013 and informed that the postal authorities Egypt Post, Ghana Post and Postal Corporation of Kenya have been doing the customs for their shipments in the three respective countries for about four months now.
"And they do it better than anybody," as he puts it. He also cited lower cost and customer experience as two reasons for partnering with the postal agencies for their last mile deliveries in Africa. He was talking in a panel during the recent virtual summit Limitless Logistics Tech Summit organised by Shipsy, an Indian logistics SaaS company, on April 6, 2022.
Kumar started his interaction with the postal authorities in Africa on his day three in Jumia when he went to get the postal licence in Nigeria. "When I joined Jumia, the mission from day one was to build a very strong supply chain company. We always wanted to be the last mile specialist delivery partner in Africa like FedEx, UPS and DHL," he said in an exclusive interaction with Logistics Update Africa.
He was convinced that postal authorities have a very strong role to play in e-commerce primarily because of three reasons.
I've seen it outside
Kumar recollected the transition of India Post due to its collaboration with Flipkart which he witnessed during his time in the Indian e-commerce giant.
"Also, when I was in Myntra, I used to do logistics and one of the 3PL partners was Quantium Solutions, which is a Singapore Post company. And I realised that even Singapore Post can drive such great business," he added.
They've strong people connect
Postal organisations are not just mail companies. They do banking, accept fixed deposits and provide paper certifications. Kumar reasons that these organisations have a lot of power as they sit in the government and in the ministries. "So they have a very strong people connect. And they have a very good understanding of the market, distribution and the people. I've always understood that I'm not just looking for mail I'm looking for a very strong partnership," he said.-
It is very practical
On his very first day in Jumia, Kumar went for a delivery run in Nigeria along with his driver. They were carrying some expensive items like the iPhone and big television in the van and they had to travel through the mud for a long time wondering who ordered them. The driver stopped the van at a particular point and they were searching for house number 14 in that locality.
There is a concept of area boys in Nigeria who are unemployed youth who will stand in front of every community and they can help find people in exchange for 50 nairas ($0.12). But they will only be able to locate by the name of the person and not by the address. When he went into the community, house number 14 was two roads apart from house number 13 because people decide their house numbers and there are no government house numbers.
"Addresses are very complicated in Africa and if there is one organisation which can find the address, it is the postal organisation. Sometimes I don't need them to deliver packages, I needed them to tell me where these addresses are," he said.
Kumar explained two major use cases of postal for Jumia with Kenya as an example where the vendor is in China and they have to pick a package from the vendor and bring it to the customer in a tier 2 town Kisumu in Kenya.
He elaborates, "Packages are collected by an agency on the behalf of China Post and are sent via the Universal Postal Union (UPU) agreement and they finally reach Postal Corporation of Kenya. This case uses the complete postal route and there is no other intervention.
Second, the customer in the Kisumu can say that I will go and pick it up from a pickup station. For this purpose, we want to use the postal post offices because they have a big reach for their pickup station."
Apart from Egypt, Kenya and Ghana, Jumia has business and operations with Morocco Post/Amana and they do deliveries and offer pickup station facilities with Jumia. Kumar noted that they have worked with Nigerian Postal Services (NIPOST) in the past and intend to do the same in future as well, while he is also talking to many other postal organisations in other African countries. "
All these things are always a work in progress. You always need to iron out the SOPs, IT integrations and commercials. So it is not very easy and it takes time," he said.
A USP of all these postal companies is that they cover the entire geographies of their respective countries and are strategically located, often close to public transport systems. Jumia uses them as a pickup station network, especially in Kenya and Ghana.
"So if you want to select a pickup point we prefer petrol pumps and post offices. Also, we tend to use postal organisations in widespread areas like tier 3 and 4. We don't have great knowledge of those terrains. So it's good to have postal because they already are present and we can leverage their infrastructure," he said.
Africa is still a very human oriented supply chain versus developed countries. There are more humans involved on a per package basis. However, there are many technology interventions and integrations happening particularly on the e-commerce front. Jumia also has technology integrations with many postal organisations but not with everyone.
"The systems are fundamentally different and the APIs are designed differently in both the organisations. So it takes a little bit of time to do that. We manually exchange information as well as automatic API based exchange depending on the country and the postal authority," he said.
It's very easy for the postal agencies to offer existing services. But to work together with a private company, to create an operating model, create a new SOP and have a project management approach would require a different mindset.
"Those two stand out for me," as he talks about Postal Corporation of Kenya and Ghana Post. "For example, when the cross border shipment will come, where will the customer receive it or can we accelerate it and focus on working with the private companies," he added.
Jumia started working with Postal Corporation of Kenya by using them as pick up stations. Initially, the information was manual and they used to exchange excel sheets. Thus they faced a lot of reconciliation and money remittance problems.
"But today, they are able to set up exclusive points for us. They've very strong IT systems. They are able to use our IT systems if needed. The integration is deep and the commitment to adapt to each other is very strong," he said.
Kumar noted that Ghana Post is also setting up some exclusive arrangements for Jumia along with the local authorities.
"I'm pleasantly surprised by these three postal organisations and the way some key people are changing the way they work, " said Kumar as he mentioned Egypt Post's intention to work with private companies, build strong operating models and his expectation to crack similar things in Egypt.
Black Friday is one of the toughest periods for logistics and e-commerce companies and it demands lots of effort. Over many years, these companies have become good at predicting and preparing for it. They need to discuss capacity planning, capacity building, and technology interventions and look at bottlenecks to ease them.
Kumar said, "Over a period of last few years, I've seen these postal organisations across Africa evolve a lot, become far more customer-centric, IT savvy and have project management approach. They ask for capacity, demand and prediction. They tell us if the cost will go up or down, and what kind of timeline we should expect. It's evolving very fast."
With an Africa-first vision, Kumar sees the future where Jumia works closely with all African postal organisations in shaping the government and logistics regulations for e-commerce and food delivery.
"We see strong partnership in creating the network and the physical footprint together across all those countries. We see strong partnerships across the organisation, use of resources, people, brands, hubs, pickup stations, etc.
Kumar also didn't forget to mention that he is happy to welcome any postal organisation which wants to work with Jumia.
This feature was originally published in the May - June 2022 issue of Logistics Update Africa.