Over the past couple of years, inflation has run rampant across the globe. Nigeria is no exception, with inflationary increases hitting 31.7% in February, its highest level since 1996. Such high levels of inflation negatively affect businesses and consumers alike. The effect on consumers is obvious. We all feel it every time we go to the shops, and we despair at the fact that a bag of groceries costs as much as a trolley full did just a few years ago. Businesses, meanwhile, face spiralling wage bills and (in the worst instances) a customer base that can no longer afford its products.
While central banks and governments are doing everything they can to bring those inflation rates down, there are interventions that private sector organisations can take to lessen the impact of inflation too. Effective logistics and fulfilment solutions, for instance, can help small and medium-sized enterprises (SMEs) overcome some of the supply chain issues that drive inflation.
“Logistics and fulfilment are essential to a successful e-commerce landscape,” says Eunice Wambui, Investment Principal at early-stage startup investor Founders Factory Africa. “Beyond that, logistics combined with innovation can unlock solutions that lower the cost of doing business for entrepreneurs, companies and customers alike, allowing limited capital to be deployed elsewhere.”
One company that’s helping them overcome those challenges is Renda. Founded in 2021, the logistics fulfilment startup has, with the backing of organisations including Founders Factory Africa (FFA), provided tailored fulfilment and distribution solutions for over 400 small, medium and large businesses, processed over 200 000 orders and helped e-commerce businesses reach more than 50 000 retailers across Nigeria.
“At Renda, we provide flexible storage solutions that allow companies to adapt to fluctuating demand patterns by scaling their storage capacity accordingly,” says Eniola Salami, VP of Growth and Partnerships at Renda Africa. “This flexibility also optimises inventory levels without necessarily tying up capital in unused storage spaces. Just to add to that as well, outsourcing fulfilment operations is really, really a big thing which Renda offers, such that we’re able to streamline the order processing, reduce the lead time, and also improve overall supply efficiency for businesses.”
Implemented correctly, all of that should allow African businesses to minimise any cost increases they have to pass on to their customers. More than that, such solutions can help African companies maintain revenue and profitability, even in an inflationary environment.
As Salami explains, the fact that Renda gives businesses a data-driven view of their logistics network can be immensely beneficial too.
“Renda brings you to a point where you have visibility into your logistics network and you’re exposed to the data analytics that you require,” he says. “That, in turn, helps your business and your brand make proactive, informed decisions. When brands do this, they begin to see how they can optimise efficiency and then are also able to minimise their logistics costs and overall improve inventory management.”
That’s not the only area where Renda offers value, either.
“Brands can also benefit from Renda’s end-to-end logistics capabilities, including storage, inventory management, order fulfilment, last mile and haulage,” Salami says. “That simply means that if you come to Renda with any logistics or fulfilment challenge you might have, you can be rest assured that Renda has a solution to cater for it..”
But the enhanced logistics and fulfilment offered by a company like Renda aren’t just important for helping businesses ride out inflation. They’re also going to become increasingly essential as e-commerce continues to grow across the continent.
As a stakeholder deeply connected with business conditions on the ground, Wambui agrees. “As the sector keeps growing, the role of logistics and fulfilment and companies only become more important. As an investor, it’s our responsibility to support high-quality innovators like Renda who are moving the dial for businesses and customers on the ground,” Wambui says.
According to the International Trade Association, Africa is set to surpass half a billion e-commerce users by 2025. As a result of this growth, Statista says, African e-commerce revenues will pass US$51 billion by 2028.
Even with that kind of logistical support provided by companies like Renda, African businesses will still need to embrace a spirit of collaboration and focus on some specific fundamentals to succeed. Regardless of sector, Salami points out, these fundamentals can be pretty simple.
“It’s simple,” he says. “You are solving problems, right? Listen to your customers, understand their needs, and then solve the pain points. When you do that, growth will follow.”
