GreenKart

The nature of Retail in Africa is informal, in fact up to 90% of trade today, still happens in open-air markets and spaza shops because it’s cheaper and convenient for the end user, which is the everyday African, but it’s a complete nightmare for the farmers & traders. 

Over 86% of small-scale farmers in South Africa rely heavily on informal & municipal markets to sell their produce. These markets are offline, no visibility on demand/supply; causing food waste, with highly fluctuating prices & high logistics costs, at an inconvenience to the Informal Traders who must physically go to the markets to buy stock, stand in long queues and pay for delivery back to their market stall, loosing up to 35% of selling time. 

The majority of informal workers are women (92.1%) and youths (95.8%) who have no alternative to the informal economy for their survival and livelihood, stemming from a lack of inclusion and lack of access to formal financial services. Providing previously marginalised people with access to basic financial services and networks is integral for financial security and growth for their businesses

GreenKart is currently a B2B e-commerce platform connecting small-scale farmers to informal traders, small-business restaurants and Spaza shops in the townships who need fresh produce, in order to improve their market access.

Our key service offering is our Buy-Now-Pay-Later (BNPL), which enables our buyers to order stock during peaking demands or in times of need and they can pay back within 7 days. Up to date, of all the stock credit given to our Traders, 97% of it is has been paid back within 3-5 days.

But what we are Really building, is an Infrastructure-as-a-Service (IaaS) platform that uses demand and supply data from small-scale farmers and Informal traders to enable a more efficient supply of fresh produce from small-scale farmers to informal traders, using Mobile cold-storage in order to allow fair/stable pricing, minimize food waste across the informal value-chain and enable equitable access to food for the end-user, which is the everyday African low to middle income buyer.

We have 2 customer segments:

1.Typically, a farmer who works on 1.5 - 15 ha plots, seasonal income due to market constraints, with an average of 3 dependents and fully reliant on farming operation for income. South Africa’s has over 2.6 million farmers who are majority small-scale farmers, over 93%. These farmers rely heavily on informal market channels to sell their produce and are also more directly responsible for food security at household level. 

2. Informal traders, mostly classified as street vendors selling all kinds of fresh produce in market stalls and on busy roads. They are majority Women & Young people aged 19 - 35 years trying to make a meaningful living. These  Informal traders who are the majority buyers of this produce to sell in the streets, buying up to 68% of this produce in markets like Tshwane, one of the biggest Market in the country. South Africa has over 2.26 million Informal Traders (TAM), 42% of them are Street Vendors (SAM) and 30% of them are concentrated in Gauteng cities. Our target SOM in South Africa is 120 000 traders (6% of TAM). 

Myself and Akani have known each for almost 15 years now, we went to high school together. We had our first agricultural project at school as part of our year project, where each group had a 25 sqm plot to plant a crop of choice and look after the plot until harvest and the produce is donated to the school. In constructive competition with one another, Akani's group had the best yields that year and that's where it all started. He developed a passion for agriculture and went on to study Soil Sciences, using his time during studying to impart the scientific knowledge in basic language to local farmers while I went on to study Industrial Engineering in university to pursue my obsession with Process Improvements.

In 2016 we decided to pick up where we left off in high school to start an Agritech startup that can help revive the farming activity in our home town. In that same year, we pitched the vision to Randy, who was Akani's classmate at University of Pretoria, to be part of the business as we needed more Crop science technical knowledge on the team at the time and we've never looked back ever since. Randy believed in the vision so much he turned down a scholarship in Canada to build with us.

We have the best team for this vision, with a combined 27 years’ experience spanning across Crop sciences, Soil science; Sales & Marketing; Agronomy; Process Improvements and Business Analysis.

Apart from having farmed ourselves when we started the business in 2016 and personally experienced the market challenges in both the formal and the informal value chain. We also spent over 2 years mapping the informal value chain in Gauteng (the biggest informal market in the country), studying real farmers, market agents, spending time with informal traders in streets to observe their daily operations as well as speaking to City Council officials to understand the regulatory requirements of operating this business and the regulatory framework for different kinds of Informal Traders.

To date, we have 109 active buyers, made up mainly of 3 categories of Informal Traders (ratio in brackets), namely:

a. Street Vendors (2%)
- Re-sellers of fruits and vegetables on the streets
- Average GMV per customer per month = 3000kg
- Average Margin = 5%

b. Street Cooks (97%)
- Sellers of cooked food at taxi ranks, corporate parks and industrial parks, mainly take-aways.
- Average GMV per customer per month = 100kg
- Average Margins = 18-28%

c. Food Joints (1%)
- Informal fast-food restaurants for take-away or sit-in, usually situated in Town/CBD or townships
- Average GMV per customer per month = 2500kg
- Average Margin = 18-28%

Our missions align in as far as having a passion for equitable access to technology and finance for the under-served and under-developed, except in our case it's not for startups but for small-scale farmers and Informal Traders, the literal back-bone of Africa's food security at house-hold level.

It will take capital that understands the context within which we are solving for, together with community and collaboration to solve the problems we have chosen in order to achieve our vision to help small-scale farmers and informal traders 'Feed The Future' and we believe MIT Solve ecosystem support and alumni, this context is well understood and we can receive the best support we need to reach critical scale and deliver impact.

Although programs generally targeting startups outside of the popular tech hubs like South Africa due to being perceived as advanced and well-developed/supported, we believe there's still a massive gap in the under-funded and supported startup sectors like the small-scale & informal/township economy. 

Contrary to popular belief, South Africa has quite a massive Informal Economy, accounting for 18% of our GDP and without the Informal, South Africa's unemployment rate would be more than 60%, but surprisingly the informal and Township economy is still the most under-serviced and startups in the space are grossly under-supported by Venture building and Accelerator programs in South Africa, receiving less than 2% of the deal flow in the country.

1. For the customers, Trust and Consistency is the real transaction currency in this space. People don't buy from Apps, they buy from other People, which means building customer relationships with a human to human approach above and beyond the mobile apps, is very critical.

2. Centralized logistics and distribution models similar to Walmart and Amazon in the US, are extremely capital intensive to operate in Africa and an operational handicap not a strength for startups for number of reasons outside their control, like poor road conditions. In Africa, the cost of Logistics is 3 to 4 times higher than the Global average, according to a publication in The Economist, which causes the price of goods to increase by 75%. An asset-heavy model like owning warehouses and massive fleets also eats away at margins or take-rates for startups, leaving them vulnerable to any tail-winds. Startups like Jumia in Africa learnt this lesson the hard way.

Decentralized Logistics and Distribution is the only answer to e-commerce in Africa and our competitors don't understand this.

1. Primarily, we are looking to expand GreenKart's market penetration locally in South Africa by expanding our Farmers and Trader network across Gauteng, Limpopo, KZN and Mpumalanga (the Agri Hubs of SA), to over 5000 in the next 2 years. By year 5, we are targeting to expand into Zambia, Zimbabwe, Angola and Mozambique with over 120 000 Informal Traders and 25 000 small-scale farmers.

2. Secondarily, we are looking to launch our 2nd product "GreenFarm", a crop nutrition platform to help small-scale farmers increase their yields to Further maximize the market access opportunity created by GreenKart services

 Our long term vision is to build an Infrastructure-as-a-Service platform that informal Agri-value chain players can use to enable a more efficient supply of fresh produce from farms to Traders and from traders to the nearest homes, schools, funerals, weddings, etc, with 100% traceability and 0% Post-harvest losses, by timing production to match predicted demands based on historic data, Just-in-Time for consumption.

Not yet measuring. We are looking for to getting help from MIT Solve with our MEL Framework

Not yet developed. We are looking for to getting help from MIT Solve with our MEL Framework

1. Our MVP is currently a mobile web-app with a basic e-commerce store front; an SQL database in the back-end for matching product listing; demand and pricing and a check-out. Upon entering the market, we did notice that using a web platform or even a native app was not appealing to most traders as it made transaction time seem longer, however, up to 94% of our buyers were engaging us on WhatsApp. It became a no-brainer for us to rather focus on developing a WhatsApp Chatbot to collect crop listings, match to demands and schedule deliveries using geo-mapping for route optimization.

2. We are not a platform-only, we also operate decentralized mobile cold storage containers, allowing farmers to aggregate produce supply and deliver to storage in bulk based on pre-order demands, reducing post-harvest losses, with shared Transportation, lowering their logistics costs by up to 30%. We plan to convert and power all our containers using Solar energy and using smaller EV's for mid-mile and last-mile delivery of produce, powered by the same Solar Energy from the mobile containers to contribute towards in the informal agri value chain

Incorporating diversity, equity, and inclusivity in an e-commerce platform for farmers and informal traders requires a thoughtful and comprehensive approach. Here are some key considerations and strategies to promote these principles:

1. Representation and Accessibility:
Ensure diverse representation: Incorporate imagery, language, and content that represents the diversity of farmers and informal traders.
Accessibility features: Design the platform to be inclusive for users with disabilities, providing features such as alt-text for images, keyboard navigation, and clear instructions.

2. Language and Localization:
Multilingual support: Offer the platform in multiple languages to accommodate users from different linguistic backgrounds.
Localization: Tailor the platform to the specific cultural and regional needs of different farmers and informal traders.

3. Fair and Transparent Policies:
Pricing and fees: Establish fair pricing models and transparent fee structures to avoid disproportionate burdens on marginalized farmers and traders.
Terms and conditions: Clearly communicate policies and terms in simple language, ensuring they are easily understood and accessible to all users.

4. Inclusive Marketing and Outreach:
Targeted outreach: Actively engage with diverse communities through targeted marketing efforts to raise awareness and encourage participation.
Collaboration with local organizations: Partner with local organizations that support marginalized farmers and traders to foster inclusivity and build trust.

5. Feedback and Iteration:
User feedback: Actively seek feedback from farmers and traders to understand their experiences and continuously improve the platform's inclusivity.

Iterative development: Regularly update and enhance the platform based on user feedback, addressing any identified gaps or barriers.
By incorporating these approaches, an e-commerce platform for farmers and informal traders can promote diversity, equity, and inclusivity, fostering equal opportunities and creating a more inclusive digital marketplace.

GreenKart is our focus product. A B2B commerce platform for small-scale farmers to sell their fresh produce directly to informal traders, allowing traders to access more affordable stock at farm-gate prices, with shared logistics services, delivered directly to their market stall. 

Our key offerings include:
• Geo-Trading - A trader mapping feature enabling traders close to one another to Bulk-buy stock in groups and farmers to share logistics to leverage better prices.
• WhatsApp Chatbot - Allows farmers to list their available harvest & traders to place pre-orders simply, just like having a chat
• Buy-Now-Pay-Later – A feature that allows Traders to order stock & pay later, based on credit scores, to improve their buying power
• Free Delivery in 24 hours – Available for all traders ordering through our platform, turning a luxury into convenience.

How it Works?

1. Crop Listing & Ordering - After sign-up & Location sharing, farmers can list crops that are ready for sale or harvest & Trader's place order via App or WhatsApp Chatbot

2. Aggregated Supply & Distributed Storage - Upon receiving an order, farmers close to each other can share transportation costs and deliver produce to our mobile cold storage containers

3. Delivery from Storage to Traders - Within 24 hours of placing an order, we deliver directly to Traders stalls for free using geo-locations

4. Buy-Now-Pay-Later - Trust is the highest currency in the Informal sector. Currently, we measure credit worthiness mainly based on transaction volume & frequency on a sliding scale where 1st transaction is 100% cash and the 10th transaction is eligible for 100% BNPL to pay back within 7 days, in future we will have more data points for eligibility once we have learnt the transaction patterns of the value chain at a larger scale

For farmers we charge a 5% commission for all produce sold through our platform

b. We collect 18-28% Margins for Produce sold to different category buyers. There are generally 2 types of Traders in our target, those who re-sell fresh produce and those who sell cooked food.

c. We charge 1.5% transaction fee to Traders for all BNPL transactions

In the past 6 months, we grew our revenue from practically R0 in June ’22 to a high of R30 000 by November and have averaged R18 041 per month in revenue in that 6-month period, especially since the rains started in November disrupting our sales and slowing down growth. 

That is still a 925% growth in 6 months against all odds, with a monthly operational cost of R43 334 on average in the same period, which is a 42% marginal break-even ratio. We are targeting to close the remaining 58% gap in the next 3 months to reach marginal sustainability for our current operational unit in Johannesburg.

In order to reach marginal break-even by end of April 2023, we plan to increase our market days back to 5 days (3 in Joburg and 2 days in Pretoria); focusing on our biggest markets (Sandton, Randburg, Bryanston, Alex, Menlyn, Pretoria North) and prioritizing our High Volume & High Margins buyers to maximize on our revenues.