Why Jumia co-founder is betting on Kenyan kiosk goods platform
In 2022, Kyosk embarked on international expansion with 42 locations across Uganda, Tanzania, and Nigeria and currently has over 300,000 outlets in its database. FILE PHOTO | SHUTTERSTOCK
When he left Jumia, an e-commerce company that he co-founded, Raphael Afaedor, picked several lessons that would help him grow his new enterprise, Kyosk.
First, how to gain the trust of board members, allowing him to temporarily shut down the company to fix internal theft.
Second, hire a team that is so good, starting from the top leadership, “a team that will pinch your ears when you make a bad decision.”
Third, not run Kyosk like most unstable start-ups, a secret that has given the business latitude over many tech start-ups.
“If you have a start-up mentality, you’ll be feeling like you are doing some things wrong. We built a very professional entity which gives us mileage over time because when it comes to start-up funding, nobody gives their money and goes away, they always come back for board meetings and release new funds based on performance,” he says.
His toughest period as an entrepreneur was in 2020.
That year, Kyosk experienced heavy stock loss due to internal theft forcing Mr Afaedor to shut down the business for three months to identify and fix the problem. This enabled them to rebuild a fool-proof system.
“I had a conversation with the board members and told them that I have to shut down the business and will be offline to identify what's going on and fix it. They fully backed me. This has enabled the business to grow very rapidly over time with minimal losses,” he says, saving the company from internal theft that has grounded many companies in Kenya and Africa.
Mr Afaedor started Kyosk, which uses technology to ease kiosk owners' woes by ensuring they do not experience stock-outs due to poor distribution coverage.
Kyosk now has over 40 centres in Kenya, Uganda, Tanzania, and Nigeria.
He says he realised that Jumia and other e-commerce giants were largely serving the middle and upper pyramid segment of the retail market yet 60 to 70 percent of retail inflows in Africa pass primarily through the dukas.
“I moved to Kenya in 2019 to co-found Kyosk, a data-led platform connecting informal retailers directly to fast-moving consumer goods companies via a mobile app,” he says.
Mr Afaedor says he got initial funding from the Export Trading Group and Mitsui, a Japanese conglomerate.
For mama mbogas and dukas, the question was whether they can receive stock on time, access credit from formal financial systems and better still, build their business on the back of their savings.
“When you think about this and the fact that technology is becoming more ubiquitous and affordable, it allowed us to build a company to solve this problem,” he says.
Counting giants like Unilever, Grain Industries, Coca-Cola, Brookside Dairy, and Kapa Oil Refineries among its suppliers, Mr Afaedor adds that Kyosk’s ambition goes beyond streamlining the supply of fast-moving-consumer goods to building a distribution chain and channel that can now be opened up to sell much more.
Rafael Afaedor, a Ghanaian, currently residing in Kenya, who co-founded Kyosk, a data-led platform connecting informal retailers to fast-moving consumer goods companies via a mobile app. FILE PHOTO | POOL
“Today, most of the dukas are selling rice, sugar, flour, among other goods but our ambition is to use their trading history to enable them to offer banking, credit, and insurance services,” he says,
He adds that the retail sector is a trillion-dollar opportunity in Africa.
“The proposition we're doing with Kyosk now is to elevate e-commerce to literally everyone.”
The CEO says that in 2020, Kyosk rolled out across six locations in Nairobi. “The duka owners use the app to place an order from our stores based on what their needs and we deliver,” he says.
A year later, they expanded to five more locations across Kenya and presently it is in 19 centres, including Voi, Embu, Meru, and Kisumu.
“We have also moved into an asset-light model where entrepreneurs can now bring warehouses, mobilise vehicles and bring drivers to plug onto the platform,” he adds.
In 2022, Kyosk embarked on international expansion with 42 locations across Uganda, Tanzania, and Nigeria and currently has over 300,000 outlets in its database.
This year Kyosk intends to expand its product portfolio passing through the platform beyond FMCG goods to include credit, buy-now-pay-later model, and micro insurance.
Challenges
Just like any other enterprise, Kyosk has had its share of challenges.
“However, my motto is a little high, a little low. When things are going well, I don't rejoice too much and when things are going badly, I don't despair too much. As a business, we have faced more than our fair share of challenges.”
The Computer Science graduate adds that this year, Kyosk also plans to integrate farmers to enable them to get inputs, credit, and market. He believes that “when you fix distribution, you fix a lot of other things.”
Advise to entrepreneurs?
He advises that one needs to professionalise the start-up from the onset.
“Get an accountant to look at your books, get somebody to audit your records, pay your taxes, do everything by the book because when you walk to a bank for credit, the size of the business is not the first thing they look but rather whether the fundamentals are right. Run the business as a professional,” he says.
