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November 19, 2018

Promoting online shopping to drive courier business

new frontiers: Fargo Courier staff ready to hit the road
new frontiers: Fargo Courier staff ready to hit the road

SHOPPING can be a bore for most men. It can also be a bore for some women. Like washing machines and other household machinery that makes our work easier; some people wish there was an easy way of buying things without the hustle of going to several stores and shopping malls and in worse scenarios, navigating through jam packed roads just to go buy items that they need or want.

"I am not a fan of shopping. I hate shopping. I always look for ways i could get the best deals without having to stroll through shops and waste hours in traffic," says Gray Cullen the group operations manager at Wells Fargo group.

Knowing that he is not alone, Gray who is also in charge of the group's courier business Fargo Courier decided it was time to take Kenya's online shopping scenario to the next level. Introduce a service that acts like a shopping mall with many stores listed on it, complete with electronic payment options and delivery.

Fargo Courier has recently launched the online site fargoshopping.co.ke that provides a market place that allows all organisations to register and sell online with an end-to-end service, culminating in delivery anywhere nationwide.

Online and electronic payment platform operator Jambo Pay solutions has teamed up with Fargo on the new web shopping service to facilitate payments for the products that will be ordered by customers via the site. However, Gray says, other card payment solutions such as Visa and all mobile payment platforms in the country are also used to pay for items purchased through the site.

"We are trying to create the same structure as amazon.com and that is bringing the products to the client," adds Cullen.

His take is that online shopping has lagged in Kenya because people are very skeptical about the security of the payment platforms and are hesitant to give their credit card details. "Over 80 per cent of all online transactions now are paid via Mpesa. People only trust Mpesa but it can be quite expensive also," notes Cullen explaining the need for an array of payment channels offered by the Fargo shopping site.

The courier structure in Kenya is very good, he notes, adding that if exploited can be a big boost to online shopping business. In South Africa, Cullen observes, you can manage about 60 to 70 per cent deliveries on an overnight basis. In Kenya, this can be done by up to 90 per cent.

"It is a tragedy we have this, yet we do not shop online," says the Fargo Courier boss.

With the courier business looking promising; propelled by the pharmaceutical, technology and agriculture-related consignments like fertilizer, Fargo Courier has decided to embrace competition by teaming up with DHL to take over their delivery functions locally.

While Fargo has only 65 outlets compared to Posta's 634, Cullen says there is no place in Kenya the company cannot reach hence the partnership with DHL.

"DHL specialises in international courier so they count on reliable partners in each country where they deliver to, for the local delivery," explains the Fargo boss.

Cullen says the company goes even to remote areas like Lodwar and Lokichoggio. But maintaining such a vast network and getting to the remote areas has not been easy, he acknowledges.

First there is the problem of loading zone shortage in most places around the country that has given way to harassment of courier vehicles by city and municipal council officers.

"It is not only us facing this problem. Courier companies really struggle with the council askaris... as soon as you park somewhere they pounce on you," says Cullen.

The other problems that courier firms have to grapple with include traffic jams that slow movement of parcels and other consignments, delays at toll bridges and poor road network in some areas. These problems have forced Fargo to increase use of air to send parcels and other cargo.

The challenges have led to unfavourable pricing of the service rendered in some cases, and shrunk the courier business slightly going by second quarter statistics released by the Communication Commission of Kenya.

As per those statistics, courier items sent during the period between October and December last year declined by 1.4 per cent to

175,982 down from 178,443 items the previous period. However the industry revenues have been rising since 2009.

Cullen says: "In courier business we have a very exciting market. Our (Fargo's) business has doubled in size in the last two years and we now have a fleet of 540 vehicles and 5000 staff within Kenya alone."

Aside from online shopping mall and courier, Fargo, in true nature of the firm as a logistics business also operates a warehouse which Cullen says helps take a load of work off the hands of businesses so that they can concentrate on their core operations.

He says, upon a client's request, the company can clear goods at airports, store them, package and dispatch to end customers all o behalf of their own client.

In the meantime, the company is actively pursuing deals with major supermarkets in the country to list items on the online shopping site. It even vets vendors to ensure that what they market on the site is what clients truly get.

Even with these achievements, Cullen still has a nagging headache to sort out: "I view courier at the moment as being for too manual and inefficient. Fargo is looking at automating the entire process to facilitate online tracking process."

 

 

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