There are more than 10 million informal shops in African cities. These are known as Spaza Shops in South Africa, Dukas in Tanzania, Tuck Shops in Zimbabwe, and Kiosks in Kenya. These shops sell over $180 billion worth of goods every year. These informal shops form a critical part of the economy, which is why Sokowatch, a B2B e-commerce startup wants to help them revamp their supply chain by unlocking efficiencies and reducing stock outages. By solving the logistical challenges for shop operators in this market, Sokowatch helps drive down the cost of basic goods for the consumers. Sokowatch enables informal retailers to order products at any time via SMS or mobile app and receive free same-day delivery to their store. This makes it easier for shopkeepers to source goods and helps manufacturers ensure that their products are consistently available to consumers.
Sokowatch has been using 178 fossil fuel-powered tuk-tuks and has operations in Kenya, Tanzania, Rwanda, and Uganda, where its operations have enabled them to generate a lot of data. Leveraging this historic purchasing data, Sokowatch evaluates retailers to provide them with access to credit and other financial services typically not available to informal businesses. According to its website, Sokowatch’s systems track real-time sales and orders across thousands of stores. Access to market trends and purchasing habits enables manufacturers to tailor their marketing strategies and allows Sokowatch to offer personalized promotions and business insights to individual retailers. Sokowatch has recently added 8 electric tuk-tuks to its operations in Uganda and plans to deploy 8 in Rwanda and expand the rollout to Kenya and Tanzania thereafter.
Sokowatch has partnered with Indian electric tuk-tuk manufacturer Gayam Motor Works (GMW) on this project, a first in Africa in the commercial electric tuk-tuk sector for hyperlocal deliveries. GMW is pushing ahead with its global expansion plans, following successful rollouts of its electric 3-wheelers in the UK and EU markets. GMW’s SmartAuto – Taskman model is India’s first electric 3-wheeler to receive European certification. The company has already delivered passenger and cargo EVs to customers from France, Portugal, Italy, and London.
“We truly do believe that electric vehicles are the future of mobility, specifically in Africa, especially when it comes to powering commerce or retail across the continent. Our preliminary analysis indicates that we can achieve significant cost savings, perhaps even more than 50% on what we currently pay to operate our traditional fleet. Over time we do believe that these pilots (in Uganda and Rwanda) will prove to be successful, and we can deploy possibly hundreds of these vehicles across east Africa.” – Daniel Yu, Sokowatch’s Chief Executive Officer.
The tuk-tuks are being used to deliver from local warehouses to customer storefronts. In a region where cities are plagued by gridlock, with narrow and potholed roads, Sokowatch adopted GMW’s 3-wheeler EVs as a primary means of transport to deliver the goods. The move is a potentially welcome effort in a region where cities are grappling with growing air pollution caused by exhaust from beat-up and poorly serviced vehicles.
“In Kampala, air quality is 6x worse than global standards and as a company built around improving the livelihoods of local communities, we took the direct approach to address the issue. Every day, we witness the impact of carbon emissions and noise pollution in this city, which is why this project is so important and also why we’re proud to be a company leading active change.” – Peter Muzoora, Sokowatch’s Country Manager for Uganda.
Although the switch to electric tuk-tuks around the globe will be driven by the economics, the poor air quality in Kampala illustrates again how important it is to accelerate the adoption of electric vehicles in this region. Uganda is also one of the best places for EVs on the continent. It has moved very quickly from having a shortage to the current situation where it finds itself in the enviable position of sitting with excess generating capacity. Uganda’s current installed capacity stands at 1252 megawatts (MW) against a domestic demand of 767 MW. 80% of this generation capacity comes from hydropower stations. The country can move to save a lot of foreign currency spent on petrol and diesel imports by substituting some of that with locally generated electricity.
GMW’s SmartAuto was launched in 2015 and is India’s first electric 3-wheeler to be powered by a Li-Ion battery. GMW SmartAuto can be fully recharged in 3 hours, offers a range of 100km/charge, has a top speed of 50 kilometers per hour, gradeability of 20°, and a payload of 600 kilogram. The vehicle is already being used by several ecommerce majors such as Amazon, IKEA, Flipkart, BigBasket, Grofers, Walmart, and other logistics firms in India for hyperlocal delivery applications.
“This is a transformational opportunity for us. With majority of the companies simply trying to import from China and assemble locally, there is no control over serviceability of components. We have spent more than half a decade on R&D, and indigenously developed an electric powertrain suitable for Indian road and extreme weather conditions. This headway has put us in a unique position today, as the demand from ecommerce firms for a reliable EV is growing exponentially.” – Raja Gayam, GMW’s Chief Executive Officer.
“Deliveries are a lifeline to vulnerable communities in these hard times, light commercial EV is an affordable and smarter way of moving goods around and addressing the last mile challenge. We are experiencing increased demand for our EVs after the pandemic from both domestic and global markets,” says Sri Harsha Bavirisetty, GMW’s Chief Operations Officer.
“Last mile is one of the highest growth sectors in the Transport & Logistics (T&L) industry, however the final leg of delivery is challenging, and can comprise up to 25-30% of total transportation cost. There is a clear opportunity for small and light commercial EVs in this segment as majority of last-mile deliveries are being done using diesel LCVs today.”
We have seen several startups, such as Bodawerk in Uganda, Ampersand in Rwanda, and Ecobodaa in Kenya introduce electric 2-wheelers in East Africa. It is good to see electric tuk-tuks now being introduced. Tuk-tuks are very popular in east Africa and there is potentially quite a huge addressable market for electrification of 3-wheelers.
All images courtesy of Gayam Motor Works
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