Though there have been improvements postal and logistics services are one of the major reasons that eCommerce has stalled in Zimbabwe. Not the only of course. Some great business ideas can help in this regard and are worth looking into. One such business idea is a delivery and logistics network business. While the name is long and complicated the idea itself is not very complicated. It is a smart take on utilising existing assets to your advantage and there are many examples to draw from. So let’s acquaint ourselves with the business idea.
Delivery network
The delivery network is a simple idea that combines a few well-established business practices to create an innovative business. The idea is to have drop off and pick up points for documents, parcels and packages that people would like to send. At these points, you will either have people or assets that are ready to receive and bill (if necessary) and prepare the items for pick up. The other part of this network is then transporting the items from the drop off point to a designated pick up point or the nominated delivery address. The advantage of operating a network is you can then arrange the logistics to take advantage of bulk delivery of items.
Postnet
There’s an article I penned some time ago exploring PostNet South Africa and how they have a similar system working, at least as part of their operations. The backbone of PostNet is in courier services. All other services are built on the back of the courier services network. PostNet provides its PostNet2PostNet courier service in addition to offering other courier services such as DHL to improve its coverage and offer international courier services. Setting up this PostNet2PostNet service requires the setting up of area offices. For example, setting up a central office in Each province (Metropolitan Provinces of Harare and Bulawayo included) would be the first step. From there the next step would be to offer licencing opportunities to individual owners in the various location that would operate as satellite offices.
Asset/Agent Network
In the PostNet example, they use an agent network to manage their pick up/drop off. So these people act as representatives of the courier company. You may have come across other examples where a third party behaves like an agent of the courier. Other more interesting approaches can be useful to anyone thinking about this business. You could consider an asset network that involves using devices to pull this off.
Assets
Remember how we used to use mailboxes back in the day? You put a letter in the mailbox and the Post Office took care of the rest? This is basically what I mean by assets, they work without manpower in the receiving of the packages. Some couriers have developed systems like this with standardised pricing for packages based on the envelope or box size. You can buy your packaging in a supermarket and then drop it off in the asset and it will be delivered to the recipient. Just remember to consider security with assets.
Smart Assets
Smart assets make this even more interesting. Couriers now use digital lockers for pick-ups and drop-offs and it is incredibly effective. Lockers are priced by the size of the locker to cater for packages of different sizes. Through the locker and an app, the sender pays for the item and sets recipient details. The app provides a code, barcode, QR code or other identifiers to use at a locker nearest to the sender. After this, the courier moves the package to the locker nearest to the recipient and provides them with a code to use to collect the item. These do not come cheap but they do deserve to be called smart assets.
Logistics
The rest of the business is being smart with your logistics. For example, if your assets or agents can log all the items they have and a destination before you set out on a delivery you can chart an itinerary that is efficient on time and mileage. Also, considerations will need to be made for inter-city deliveries and how that will work.
It’s a business opportunity that seems ripe for the picking with the current state of things and in the right hands we could have another viable logistics startup in the game.
Courier services are an interesting industry, especially in Zimbabwe. My opinion is that they are profitable in an economy with higher disposable income, and Zimbabwe does not currently have that, with the majority of the population living below the poverty line, disposable income is a fairytale at this point in time.
If I have a little money for groceries, the last thing I would be willing to do is use some of that money to pay for a courier, I would rather go to the shop myself. This extends to every purchase, if I have enough money to buy a fridge, stove, tv, or any appliance, but even that expenditure is going to dip deeply into my limited money, why pay someone to deliver the items to me when I could go to the shop and bring them home myself at a fraction of the price.
So based on that we have eliminated 70%, 80%, 90%? of the population from utilizing courier services for online purchases, simply because of the additional charge.
So while there is huge potential in the courier and logistics industry in Zimbabwe, until disposable income levels increase in the country, the use of such services by the majority of the population will remain extremely low.
This is not a bad idea, and I think is in an industry that will have great potential one day, I don’t think it is at all a viable industry to break into at the present time. Of course I could be completely wrong and maybe it does just need more businesses to start up in the industry.
You’re not completely wrong. 10% of 16 million is 1.6 million people with deep pockets, a decent market. You should remember that courier services pre-date eCommerce by many years. So while that one market is small but deep, there are other markets and applications for courier services. Else none would exist at all in Zimbabwe. Thank you for the insights.