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In November last year Lars Veul, co-founder of Pargo, a smart logistics solution, joined 24 other African entrepreneurs in China for the eFounders Initiative Entrepreneurship Training Programme, an initiative by Jack Ma, founder of Alibaba, China’s e-commerce giant, and the United Nations Conference on Trade and Development (UNCTAD).
The entrepreneurs were not only exposed to founders and top level executives at Alibaba, but the programme also offered capacity building for the entrepreneurs on all things e-commerce, from use of big data, inventory management and rural commerce to logistics and mobile payment systems.
“Alibaba’s history and the learnings that were shared are very relevant for South Africa as well as for our company Pargo,” says Veul in an article he wrote after his return from China where he shared his key learnings and takeaways.
On his return Veul also revealed that they were in talks with Alibaba to become a delivery partner to use their smart logistics network to help improve the ecommerce giant’s logistics on the African continent.
Pargo allows users to order their shopping online and have it delivered to so-called Pargo pick-up points which they have established at stores throughout the country, including Clicks stores, Lewis and Caltex service stations. They have also partnered with The Foschini Group (TFG).
“Logistics is one of the biggest challenges for growth of ecommerce in emerging markets. Most people are not permitted to receive their online shopping at their workplace. Many also don’t have somebody at home to receive the online shopping on their behalf and security guards at housing estates are often not permitted to sign for parcels. Additionally, the service at the Post Office is deteriorating.
“Pargo solves these challenges by allowing people to send and receive parcels at conveniently located in-store parcel pick up points. Our network of Pargo points enables online shoppers to buy online and collect their delivery when it suits them best at one of our stores. Our solution is very similar to how Alibaba has solved similar logistical challenges in China,” says Veul.
“It’s still early days, says Veul about the possible collaboration with Alibaba, “but we’re looking at exploring them to use our network in South Africa,” Veul said in a Ventureburn interview.
Veul speaks to SME South Africa about the biggest lessons learnt and what a partnership with Alibaba would mean for e-commerce on the continent.
On key learnings
The programme at Alibaba provided us with important learnings from China and possible opportunities for e-commerce in South Africa, but we will need to take these learnings and find solutions for our own unique challenges. We hope that at Pargo we can be one of those solutions.
On collaborations and partnerships
Alibaba has made the “eco-system approach” their main strategy for growth in 2008. They created an inclusive eco-system where all the different stakeholders collaborate and benefit. They manage this through intelligent, data-driven systems.
At Pargo we are working on creating a logistics platform that leverages the capacity of existing courier and retail partners to benefit Africa’s leading e-commerce and retail firms. We hope to connect more aspects of the ecosystem through intelligence, data and collaboration.
On the benefits of a foreign partner
Each company comes with their own know-how and expertise which can benefit the partnership. Foreign partners often have a different approach to certain things which could prove to be useful as it forces you to rethink your current challenges.
However, we don’t believe it would be wise to simply copy and paste a foreign solution in the hope that it will be successful in South Africa as each country has its own challenges.
On expanding e-commerce’s reach
It is our mission to create access for anybody in Africa through our network of convenient Pargo points and by using a smart logistics platform. By expanding our network of Pargo points we will be able to reach more people, which will be a great enabler of ecommerce on the continent.
The bigger the network, the more parcels we can distribute across the country and vice versa. This network effect benefits both Pargo and any company that works with us.