MACmobile, a South African technology firm, this week opened an office in Kenya with sights firmly on the rapidly expanding fast moving consumer goods (FMCG) market segment in East Africa. The firm develops software that is already helping dozens of established firms across Africa to manage their distribution chains.
It opened its Nairobi office on June 5, having already clinched deals to manage distribution networks of established brands such as Coca-Cola, Unilever, Safaricom #ticker:SCOM, and a tens of other wholesale outlets in Kenya. We spoke to Andrew Dawson, the firm’s commercial director.
GIVE US A BRIEF BACKGROUND YOUR BUSINESS AND WHY YOU ARE IN NAIROBI TODAY?
MACmobile originated in South Africa where we have a strong contingent of software developers in Johannesburg. Coca-Cola has been our primary customer in the last 12 years. Due to our repeated robustness and agility in our ability to meet its requirement, the partnership has only grown stronger. We noticed from the start that Coke has a very strong internal methodology for doing business but that does not mean their system works for everyone else in Africa. Three years ago, we took a couple of steps backwards to redesign an Africa-centric solution that is modular. From our experience, different firms have different requirements. We took two years to develop a singular system that caters to both small and blue chip firms in Africa.
WHAT IS THE MACMOBILE BUSINESS REALLY IS ABOUT?
We are a business solutions house that is premised on software. We make very simple software platforms that perform sales generation; order-to-invoice generation; warehouse management from stock to delivery; and perform financial analysis right up to the Balance Sheet, all in a single platform.
We recognise that for firms to grow their businesses, they need to change the minds of retailers on the ground, and the easiest way to do that is to have a reward system. We put a lot in reward programmes which we embed on our sales and distribution structure as has been the case in our deal with Tanzania Breweries, Heineken and Distell. We are still in our early days in Kenya but we know meaningful rewards that can be redeemed for data or healthcare benefits to be successful here.
THINK OF A TYPICAL AFRICAN FIRM. IT IS FAIRLY SMALL AND THE MANAGEMENT HAS A FAIRLY GOOD CONTROL OF ITS SHORT DISTRIBUTION CHANNEL. WHERE WOULD YOU COME IN?
Ours is a simple and modular mobility platform that allows for sales distribution logistics and is targeted at firms including those in an SME space. It is designed to boost productivity and help firms to become more efficient. Our system generates internal intelligence that helps the firms to know what happens to their product between the time it is produced and when it gets to the final consumer in the retail sector. By so doing, we generate intelligence that enable the business owners to see where resistance, if any, is coming from.
APART FROM COCA COLA, WHICH OTHER FIRMS HAVE YOU PARTNERED WITH IN KENYA?
We are working with Unilever, Pepsi Cola and 17 independent wholesalers; I mean those with between one to three warehouses and three to eight trucks. We are also in final talks with four firms which are coming on board soon. At the moment, we have been spending a lot of time with the Kenya Association of Manufacturers, trying to spread the word about operational efficiency that our systems can bring. Above all, our software is now fully integrated into Safaricom’s M-Pesa payment system.
SOFTWARE VENDORS HAVE FREQUENTLY COMPLAINED OF COUNTERFEITING IN THE REGION. DO YOU TOO CONSIDER THAT AS A CHALLENGE?
To be honest, software in itself is a commodity like any other and it is at a risk of being counterfeited anywhere. We are not the only vendors handling these kinds of software in this region. However, we are one of the few vendors who are selling solutions. Are there competitors in our space? Absolutely. Are there companies with a 360 modular offering that we have? No.
WHAT VALUE DOES YOUR INVOLVEMENT IN THE DISTRIBUTION VALUE CHAIN BRING TO THE CONSUMER?
The impact is not a direct one. In fact some of the consumers may not even know of our existence. Indirectly, however, we use algorithms to determine how much stock our client needs and ensure this feedback is available across the chain up to the production point. The overall goal is to use the information to ensure goods are always on the shelves for the consumer in time, all the time.
WHY DO YOU SEE THE EAST AFRICAN MARKET AS YOUR NEXT GROWTH AREA?
From the economic front, the region has perpetually been growing buoyed on by a push by governments push. From technology perspective, East Africa has been a strong growth market for mobile app solutions starting with M-Pesa success. Whether it is Kenya, Uganda, Tanzania or Nigeria; we see a push by governments to stimulate economies as a positive step. So we see the region as our massive growth target area with Kenya as our hub.
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