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From bike hailing to dispatch service: How battle for last mile business will be fought, and probably won

Nigeria's first delivery app, GIGGo, set for launch

With about 123.49 million internet users in Nigeria, according to recent figures from the Statcounter portal, the increasing trend of e-commerce activities is quite understandable. Given this reality, more online stores and retailers emerge on a daily bases.

With about 40% of this population taking orders and making payment online, Nigeria, today, has a rough estimate of about 50 million online shoppers. And, this comes with the potential of hitting 75 million by 2023 when internet users count is projected at 187.8 million.

For a decentralised system that is cost efficient, dispatch service has in turn been on the rise with the trend. We have seen many players operating in the space for a percentage of market share.

While some of these players are light weight firms, a number of them are heavy investment-backed players who are turning the logistics business into a professional tech-first business with observable presence across cities in Nigeria.

GIG Logistics, for instance, since becoming a player, has redefined the delivery business and made innovation central to its operations and business culture.

Following the recent ban on Okada in Lagos state, and the strategic move by former operators to launch into the last mile business sector, existing logistics firms without high-end technological deployment in their service road map are bound to feel the heat of market competition.

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This will occur as a result of the anticipated influx that will greet the space, thereby, leading to an ultimate short time saturation of the market while players re-strategise to scale their entities.

Aside the tech advantage, former bike hailing startups might have their fingers burnt all again should they fail to enter the market with caution.

Perhaps, there will be a lot for these new entry players to learn from a player like GIG Logistics with experience and remarkable tech-enhanced operations whose recently launched GIGGO Delivery App comes with great reviews from leading tech communities like Techpoint, Techcabal and Technext.

No doubt, an incursion into a space already dominated by companies which never focused on bike hailing business might pose a number of challenges to these would-be new players.

One of these challenges will be pulling through the phase of signing up with retailers and warehouses needing their services, bearing in mind that these business owners already have established relationships with other dispatch companies over the years.

They will be going into fierce competition with the widely perceived market leader, GIG Logistics, and numerous other operators like Neuron, GAL Express, Tranex, Tranzit, Kobo360, Easy, etc. -many of which have their tentacles spread out and equally aggressive in their market operations.

It is even more important to know that while these businesses (bike hailing and delivery services) have a lot in common, they operate on different temperaments. Hence, the likes of Gokada must come to this terms early enough.

For delivery, riders would have to exhibit grasp of the local environment, snake through the neighbourhood in far flung territories to meet customers, while their display of professionalism will go a long way to endear clients to business owners who use them.

There is need to help these supposed wounded bike riders who the government has just technically laid off to heal, and not have them instantaneously deployed straight into the dispatch service.

For these reasons, partnering online stores and warehouses must run cognitive analysis before settling for a dispatch service firm for the sake of their business. Reputation, tech-savvy knowledge, experience and efficiency should be yardstick for anyone looking for a suitable service.

While desperate new entrants can easily redeploy their tech complex into the service, care should be taken to meet other highlighted factors in order to run a fulfilling service as a business entity. Of all these, superior service delivery, network and knowledge of the local environment must count for more.

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About the author

Ridwan Adelaja

Ridwan Adelaja is a multimedia journalist with a special interest in business news analysis

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