Deliveries in the GCC have never been straightforward.
Armed with a list of names, phone numbers, vague areas and nearest landmarks, delivery drivers have endured a thankless task in getting packages to their intended recipients; recipients who are oftentimes left waiting for hours, feeling increasingly frustrated, while their delivery slowly – and not necessarily surely – edges closer to their possession.
It’s a story that has played out every day in the region since time immemorial thanks to the overwhelming lack of addresses, and one that has had a huge impact on the still-emerging e-commerce landscape of the Middle East.
Online companies have struggled to reduce high return rates, with large quantities of packages failing to reach the hands of their recipients, not only denting reputations and irritating customers, but stunting the growth of e-commerce in the region, which is still failing to meet its incredibly high potential.
Enter Fetchr – a start-up which has revolutionised the shipping industry in the region by changing the way packages are delivered.
An easy-to-use app bypasses the need for a physical address by using customers’ GPS coordinates as a delivery location. Literally putting your mail into your hands, the concept uses technology to pinpoint destinations, thus creating a vastly more reliable service than has previously existed.
The company is the brainchild of French-Iraqi Idriss Al Rifai, and American-Palestinian Joy Ajlouny was one of the founders along with him.
Ajlouny found huge success with her company Bonfaire – a Silicon Valley-based e-commerce platform for luxury footwear which was bought by Conde Nast and LVMH, while Al Rifai was head of operations for Middle Eastern shopping club, MarkaVIP.
Prior to their meeting both had endured difficult times with the lack of addresses in the region.
“The problem I was having was shipping the packages to Saudi, Kuwait, Bahrain, and other parts of the region,” says Ajlouny.
“The packages kept coming back saying they can’t find the address, and I was really frustrated. I could not believe how little marketing dollars I was spending in this region to get incredible returns, but the frustration was that nothing was getting delivered.
“I would start yelling at my interns, telling them ‘why are they back, where are the addresses? They are incomplete.’ And then I realised there are no addresses. I became fascinated with the subject because how can you deliver packages when there are no addresses? So I was frustrated.”
After selling Bonfaire in a merger and acquisition deal, Ajlouny took up a mentoring role at Stanford, advising young women on raising money.
She was asked to take part in an event with an Arab organisation that invited young entrepreneurs to pitch for funding from Silicon Valley investors, when she met Al Rifai.
“I was sitting in the audience listening to pitches, and unfortunately a lot of them were absolutely ridiculous and I was rolling my eyes. I was a little bored,” recalls Ajlouny.
“Then Idriss came up on stage and of he was talking about ‘I have this great idea on how to solve the problem of no addresses in emerging markets’.
“I lit up like a Christmas tree because I’m someone who experienced it. So I went up to him after the event and said I absolutely love this idea – let’s talk. And we got together and started chatting. I said I experienced it, I’m your customer, I’m your target.”
Al Rifai adds: “We had tons of issues with shipping and delivery. We were using a couple of different companies, including the big ones – regional ones – and it was just not working. So the board decided we should do it on our own.
“What I did for Marka worked really well, so I said I don’t just want to do it for one company, I want to do it for the whole industry. So this is how I started the company three years ago.”
His pitching trip to San Francisco two years ago proved successful and led to an impressive Series A funding total of $11 million. According to Al Rifai, 50 percent of the money came from Silicon Valley, 30 percent from London, and 20 percent from the UAE.
“The goal was to do three things,” he says.
“One was to expand on countries, which we did. Two, build a team that could get us to the next level, which we did. And three, build something on the tech side that is robust.
“Customers were using our app in different ways so we needed to improve and tailor the app, and do a lot with the back end to actually provide something better.”
Picking up the thread, Ajlouny explains the size of the problem the duo were aiming to solve.
“There is always a problem in emerging markets,” she says.
“It’s not just a problem in Dubai or Saudi, it’s a problem in Brazil, a problem in Russia, a problem in China. It’s a huge problem – there are no addresses.
“We don’t just see ourselves as a solution for the Arab world, but a solution for many countries that are having the same problem. And that’s why we’re excited. “
The Fetchr app allows users to take an image of their package for drivers to identify it easily, schedule pick-up and delivery at the touch of a button, track the package, make payments and collect items, with the premise of it being a fuss-free, contact-less experience.
According to Ajlouny, it is nothing short of a revolution in the industry.
“Nothing has changed in shipping for 100 years; it has been the same piece of paper and pencil,” she says.
“They go out with Aramex or whoever, and they make you sign the paper. We are completely technology. No paper, no phonecalls. We know where you are, we pick up the package and we eliminate the need for human interaction. It’s a completely technology based delivery.
‘We have two types of deliveries. We have business to customers – retailers use us to deliver to customers because they get a better delivery service because we’re able to locate them – we use their cell phone number as a physical address, so we don’t deliver to your home, we deliver to your phone.
“And we also have C2C. So, say a woman alters a dress and can’t pick it up, she uses our app, we pick up the alterations for her, pay for it, and bring it back to her. So we have a fetching option, which is really helpful. It’s called Fetchit.”
Al Rifai explains that Fetchr is about having “the delivery company working around your schedule, and not the other way around”, adding that the business aims to empower people through their cellphones.
“It’s about providing services around you based on your GPS location,” he says.
Ajlouny goes one step further.
“Right now the hottest segment in Silicon Valley is last-mile logistics. Evaluations are through the roof,” she enthuses.
She adds that the refinement of these last-mile logistics is what will push the MENA region to meet its full e-commerce potential.
“Everyone talks about booming e-commerce,” she continues.
“E-commerce has boomed in the United States and in Europe, but it hasn’t boomed here. A lot of companies are not even online. The whole world is online, yet the Middle East is not. So they are just on the verge.
“But you cannot solve the boom in e-commerce unless you solve shipping. Because e-commerce and shipping are one and the same. You cannot boom in e-commerce unless you master last-mile logistics.”
Al Rifai adds: “You have this long tail of customers who bought once online and then never bought again. And the main reason for this is logistics, because they’ve had a terrible experience losing packages, getting phonecalls, the driver didn’t show up, or wasn’t on time.
“All this creates friction for the e-commerce companies. Customers just don’t come back – they’d rather go to the mall and not buy online.”
For the Fetchr duo, the figures involved in e-commerce – both negative and positive – add up to a lucrative opportunity. An opportunity that can be solved with the improvement of one thing: shipping.
“What’s driving e-commerce is two things – one is broadband penetration and the other is smartphone penetration,” says Al Rifai.
“The broadband here is one of the highest in the world, and smartphone penetration is actually the highest.
“You have about 81 percent smartphone penetration, and about 110 percent SIM card penetration. Retail represents $425 billion as a market, and e-commerce only represents about 1 percent. It’s between 9-33 percent in other countries like the US and UK.
“Last year, for the first time, in the UK for the Christmas season, there were more gifts bought online than offline. Figures are up everywhere, but still here we have 1 percent. Why? It’s because of shipping. It’s the main reason.”
Ajlouny adds: “There’s every reason for e-commerce to boom here. And yet it’s just on the verge. So we find ourselves in the right place at the right time.”
It’s not only e-commerce, but also marketplaces where Fetchr see the future.
“You can see even more traction on marketplaces,” continues Al Rifai.
“They are huge in the US and Europe but not here. The problems you have receiving packages is multiplied by two because here it’s all about selling and buying. So you have two legs, two interactions with two different customers. So if it’s a pain doing it once, it’s more of a pain doing it twice.
“Nobody is thinking about selling used stuff online, which is a billion-dollar opportunity.”
Another angle Fetchr is looking to lead with is social selling.
Last month the company announced an additional feature called Sellr by Fetchr, which allows people to sell more quickly and efficiently on social media.
“Social selling is insane,” says Ajlouny.
“Even the big e-commerce companies are selling on social media now. It has become so important.
“The way people sell on social media is a pain, though. People use WhatsApp, exchange numbers, go back and forth, then work out the payment and the collection, and it can take a lot of time and effort.
“We’ve got a link now called Sellr by Fetchr which allows you to sell on social media. We will pick up the product, collect the cash, and ship the product. So we are enabling people to sell on social media.”
Al Rifai adds: “At the moment you need multiple interactions. You need to have the means of communication to help you find the address, get the cash, discuss how many you need, work out the credit terms, and so on.
“All these interactions are unproductive, so what we did is put together a feature which is easy to use, requires very little effort, and encompasses payments, storage, inventory and delivery.”
Ajlouny explains that the new feature is “a checkout page for social media” and that vendors can simply share a link to their personal checkout page, whereupon buyers fill in the details and the rest is taken care of.
“Social selling represents up to 30 percent of sales in Saudi Arabia,” says Al Rifair.
“It’s tremendous, and it’s just not catered for. You’re not big enough to have an account with Aramex, and you still have all these issues with actually making the setup. So we believe it’s something that will really change how people sell.”
Growing the product is just part of the company’s ambitious expansion plans, which Al Rifai admits are wide-ranging.
“We’re a start-up, so it’s a land-grab right now. We’re trying to get as much as we can,” he said.
“We’re going into different marketplaces and things are going well. Every week has been our best for the past four months. It’s growing exponentially.
“The service we provide is really catered to countries where there are no addresses but where e-commerce is booming. So we’re looking at countries in Asia, South East Asia and Africa. Africa has tremendous issues. Nigeria, for example, has a 60 percent return rate.
“Here, our own return rate is about 80 percent lower than the competition. It’s all about speed, giving the customers different channels, and so on. You need to provide broad channels if you want to provide a better service, so we do 97 percent same day or next day deliveries, a return rate lower than 2 percent, while the other guys have 10-14 percent. And we deal with cash deliveries, that’s about 90 percent of our deliveries. We do it all very quickly, and we can do that in different markets.”
Building a first-rate team to achieve these impressive figures was obviously something the founders wanted to prioritise for Fetchr, which now boasts the former CMO of Namshi, among other e-commerce high-fliers.
But despite the importance of the team, Al Rifai says technology is still the vital part of the puzzle.
“The team is super important, but customer expectations is 90 percent about tech,” he says.
“As customer what I really want is the package on time, reliability, and I want the transaction to happen as it’s supposed to happen. With the tech we’re solving about 90 percent of the problem. Then if the driver can be nice, smiling, and provide that extra touch – that’s the 100 percent. That’s the last part to add. We’re focusing on both.
“We have about 40 developers now on both platforms, whether it’s app building, back end systems, APIs or whatever – we’re moving fast now, and there’s so much to grab.
“A lot of the logistics companies have to introduce some part of technology into their operations. We’re a technology company that just happens to do logistics, so our core – the backbone of what we do – is tech. I think this is a key difference.”
Ajlouny adds: “Most companies that do shipping are shipping companies. We’re a technology company that ships. Not a shipping company that uses technology.
“And it means we can move fast. This is a reason we’re not worried about the competition. These big companies cannot move as fast as a start-up. You’ve got huge companies like Aramex – do you know what it would take to move this ship? You need to take everything and to change it – integrate all the technology you need across the company. It’s a huge job. And they’re not built that way. They’re a shipping company trying to integrate technology.
“Unless you innovate you die. That’s a fact. To innovate you’ve got to be young, mobile, think forward, and so on. Most of these companies are old-school. The DNA has to be young, and innovative, and creative.
“Even Google has had these huge problems – Facebook too. That’s why they make these acquisitions. They have to buy the younger companies.”
For Ajlouny, however, there are different kinds of problems that plague start-ups – starting with funding.
“When we went looking for funding in the Middle East, everyone kept telling us ‘don’t waste your time – they don’t fund Arab companies’. And they don’t,” she says.
“They don’t look at the Arab world – the look at India, Israel, and China because the VCs have offices there and they like to keep an eye on their investments. They just don’t come to the Middle East.
“When we got funding we became the first company in the history of the Middle East to be funded by the top VC firm – New Enterprise Associates – they are not only the largest but they are the most successful VC firm in Silicon Valley.
“So we feel a huge burden because with our success we open a doorway for other entrepreneurs in this region of the world. And if we don’t succeed then we close the door.
“We really feel that pressure every day.”
The issue of funding is just the tip of the iceberg for Ajlouny, who argues that the business landscape of the region does not support new companies in the way that it should.
She continues: “We feel frustrated as entrepreneurs because the ecosystem here is not conducive for helping start-up.
“You need to buy a licence – that’s $25,000. You need to register with the government – that’s another $25,000. How do you prosper as start-ups?
“In the US, in Silicon Valley they have incubators that do everything they can to attract these bright young minds and say ‘come with your ideas, we’re going to foster you, we’re going to pay for it, we’re going to develop’.
“Here the ecosystem is not built, and it should be because Dubai attracts people from all over the world. Why not create Dubai as a hub for technology?
“They have the biggest buildings – the tallest, the greatest – the biggest this and the biggest that. Why not invest in minds instead of buildings? Why can’t we have the greatest centre for technology start-ups in the Middle East? Why are we investing in buildings?
“I think that’s what makes Silicon Valley such a special place. People come from all over the world and they know that they’re going to be funded and treated with respect and given a chance. Why not offer that same opportunity here in Dubai? It’s hard enough for companies like IBM to prosper because of the extreme expense. We’ve spent half our [original] funding on just licences. I mean, give us a break – we’re not IBM, we’re start-ups.
“If there’s one message I could get to Sheikh Mohammed, it would be something like ‘please, stop investing in steel – invest in talent and innovation’.
“A country is only as good as the humanity that it’s built on. Here you come and it feels like they can’t wait to kick you out. Every time we hire someone there’s a visa restriction and then they’ve got to leave the country, pay for a ticket for them to leave, then another medical examination. Think about all the expenses that rack up trying to run a company like a start-up. You’re dead before you start.”
They are bold but honest words from a duo who clearly aren’t afraid to disrupt the norm when it matters the most.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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