The Gauteng-based retail distribution startup Vuleka plans to expand across South Africa in the next 12 months and into other African countries within the next three years.
Founded in 2017, Vuleka provides a route-to-market solution through its mobile app that facilitates bulk-buying, warehousing and distribution of FMCG goods into informal stores – called spaza shops.
Essentially, the startup works with the big FMCG companies as well as smaller local manufacturers to give them a route-to-market solution via its large network of informal business owners, while a team of youth marketers on the ground promote manufacturer products to these markets.
“Through our Vuleka App we collect raw unfiltered information about their products and their customers,” chief executive officer (CEO) Brian Makwaiba told Disrupt Africa.
“We can also trace and track where their products are going to in the informal markets, track quantities sold and in which area.”
Spaza shops provide vital goods and services to informal settlement residents, as well as stimulate economic growth by circulating money within the community. Yet often shop owners have insufficient bargaining power or business knowledge to effectively negotiate discounts, which puts them at a disadvantage.
“There is also little existing collaboration or communication between these businesses, And they rarely have opportunities to learn from or support each other. It is precisely for this reason that these kinds of business owners should make use of quality new innovations and technologies,” Makwaiba said.
Technologies like Vuleka, which is in theory able to access the around 40 per cent of South Africa’s more than 155,000 informal traders who own smartphones and are able to place orders online.
“Our specific market is the most formalised spaza shops, and fish and chip shops, that have a bit of formal structure,” said Makwaiba.
“We currently have a live database of 6,000 spaza shop owners that fall within this classification. We are however only servicing 1,200, with a view to in five years of servicing up to 10,000.”
To facilitate this, the bootstrapped Vuleka, which is in talks around securing funding, is planning on expanding beyond its Gauteng base within the next year. Makwaiba said it also has plans to launch in other African countries, through partnerships, in the next two or three years.
The company has a host of revenue streams including adding a margin, delivery fees, listing fees, success fees, and advertising charges, and also collects sales data which it sells back to manufacturers. Revenues are growing at around 50 per cent year-on-year.