E-commerce logistics business ParcelNinja is planning a massive Africa invasion, to digitise the continent’s informal merchants, following its acquisition by logistics giant Imperial.
Established in 2014, by the founding members of online shopping sites Superbalist and Wantitall, ParcelNinja offers South African e-tailers a convenient outsourcing solution for their fulfilment needs.
Using its custom-developed cloud-based infrastructure, the company outsources warehousing and parcel delivery services to ensure e-commerce clients don’t have to worry about storing, picking, packing and delivering products when sales come in.
The service is made available through an API, which gives clients a single point of integration with their system and provides a tracking management platform.
A major component of the business is its competency in distributing to spaza shops and informal merchants that order from suppliers online – a service it claims is not offered by any other company in SA.
Parcelninja co-founder and CEO Justin Drennan told ITWeb the company is gearing to provide specialised warehousing and distribution management services to e-commerce and informal merchants across SA and the African continent, after JSE-listed logistics solutions giant Imperial recently bought a 60% stake in the e-commerce player.
“We see this acquisition as ‘day one’ in our business. What it means is that we’ve just teamed up with one of the ‘Juggernaut’ of Africa’s distribution sector and there are so many opportunities coming to us.
“Our distribution to the informal merchant’s sector is a big part of the reason Imperial was so interested in us. We have a network of around 1 000 spaza shop clients who order from suppliers online and normally they would wait a while for these goods to be delivered – but we are able to deliver to them the following day. Our vision is to extend our merchant partners across SA and even into the African continent.”
Imperial is an African- and European-focused provider of integrated logistics solutions, concentrating on five key industries: healthcare, consumer, automotive, chemicals and industrial, and commodities.
The company, which has over 25 000 employees globally, has been on a digital drive to leverage emerging technologies to deliver innovative end-to-end solutions to clients in over 20 African countries.
Imperial brings to the partnership an extensive client-base focused on time-sensitive courier services that will now have access to Parcelninja’s digital offerings.
The African expansion, according to Drennan, will initially prioritise the informal market, which he believes is the most under-serviced economy on the continent. The aim is to provide informal merchants and spaza shops across the continent with access to digital solutions, which will speed up their supply chain and delivery turnaround times.
As part of its offerings to the local informal sector, Parcelninja has a partnership with British multinational consumer goods companyUnilever, which allows spaza shop owners to place online orders, via Unilever’s system, helping them track their orders every step of the way and have their deliveries fulfilled by Parcelninja.
“The platform was built together with Unilever and we are in conversation with a few multinational suppliers of merchants locally and across the continent. If you walk into any spaza shop, any product you see on the shelves is a potential customer of ours. We currently make 1 500 deliveries a day to the informal sector and we’re hoping to significantly expand our reach.”
Through similar future partnerships with suppliers across Africa, the acquisition will play a crucial role in digitising the informal trade, which forms a large part of most African markets, notes Drennan.
Africa’s informal cross-border trade could be worth as much as 80% of the value of formal trade, according to the Afreximbank Africa Trade Report 2020.
Building business capability
In terms of scaling other business units, Parcelninja plans to expand its network of e-commerce clients (formal sector) locally and build more capability – with the goal of achieving a substantial 30% to 40% growth rate each year, explains Drennan.
The company is currently picking and packing over 18 000 items for around 3 000 orders per day, from the 6 100m² warehouse based in Johannesburg, which hosts upwards of half a million items on behalf of online shops across SA. Its previous clients included eBucks, Superbalist and Groupon.
The company also has collaborations with numerous local couriers that are responsible for the collection and delivery of goods.
It plans to add staff throughout the year, to bolster its team of 100 employees. It also has a permanent team of developers who are constantly working on improving the technology and infrastructure.
“Online delivery services’ turnaround times are often disappointing – and one of the key reasons why more retailers use our tools is because it allows them to have a quick delivery service, which can ship across multiple couriers, while also providing a dashboard to gain insight into the couriers’ performance and tracking of deliveries.
“We have integrated our system with a number of couriers and we have some couriers classified as specialists in turnaround delivery times, while others may have a core competency in delivering heavy equipment.”
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