Can Grocery Delivery for the Poor Soar in the Coronavirus Era?
WHY YOU SHOULD CARE
Because online grocery is booming — but it often leaves out the poor.
By Nick Dall
As the Imizamo Yethu informal settlement in Cape Town was engulfed by flames one night in March 2017, Jessica Boonstra watched from her home nearby. “It was so close I could hear their screams,” she remembers. With government intervention sorely lacking, Boonstra, 43, volunteered with the local Thula Thula relief organization. Using her retail and logistics background, she developed an app to register people in need. Within days they had developed an emergency supply chain that could feed 15,000 people “in a fairly orderly fashion.”
A few months later, she gathered a few of the people who’d been instrumental in the relief efforts. “We’ve showed that this is possible as a charity,” she told them. “What’s stopping us from doing it as a business?”
Yebo Fresh, the one-of-a-kind online retailer born out of the ashes of those fires, gives its 1,000 clients (and counting) across seven informal settlements in Cape Town the chance to enjoy twice-weekly grocery deliveries. With prices comparable to those in brick-and-mortar stores and no delivery fee on large orders, the service is saving women (it’s almost always women) as much as $7 in public transport costs per order and freeing up entire Saturdays (it’s almost always Saturday) that would previously have been spent scouring the city for the best deals.
This could be our finest hour or a total disaster.
Until now, the company has been focusing on perfecting its model, but the declaration of a COVID-19-inspired State of Disaster has forced Boonstra to put Yebo Fresh’s business model to the test sooner than planned. Thirty million South Africans live in areas not serviced by mainstream grocery retailers. “This could be our finest hour or a total disaster,” she says, clearly a little daunted by the fact that next week’s order will be 10 times bigger than any the company has ever attempted. (They’ve even had to rent a second warehouse.)
Mark Forrester — founder of the WooCommerce plugin used by Yebo Fresh and one of Boonstra’s seed investors — has no such doubts. “I saw fantastic opportunity when I first looked at Jessica’s skill set, a wonderfully creative, Africa-centric use case of our e-commerce platform, and her agile business model,” he says. “I have no doubt her business can step up to the challenge of feeding Cape Town’s most vulnerable people during this crisis.” They aim to squeeze profits from a lower overhead, with no retail space, only 10 full-time staff and deliveries just twice a week.
Growing up in a tiny seaside village in the Netherlands in a family of problem-solving engineers, Boonstra stood out from her more pragmatic relatives by always being “the one who wanted to save birds who flew into windows.” But she is no pie-in-the-sky idealist. After completing a degree in technology and policy (which included an internship in Tanzania, where she fell “head over heels” in love with Africa), she landed a job at energy giant Shell. Seven years later, she was recruited by Dutch retailer Albert Heijn, which soon had her leading its online business development. The company is now head and shoulders above the online competition in the Netherlands.
Despite all the career success, something was missing for Boonstra and her husband. “Any chance we got, we’d put the [three] kids in their backpacks and head to Africa,” she says. In 2014, they took a four-month sabbatical to Ethiopia, and it was there — sitting atop a mountain — that they decided to make a permanent move to the continent.
Within months, they’d quit their jobs and moved to Cape Town. “We were very optimistic,” remembers Boonstra. “I had retail skills, my husband was a solar energy expert, we’d both been headhunted all over the place in Holland.” Yet after a year and a half of job hunting, they had to start selling off their kids’ Legos. Eventually, hubby René Laks found employment with a solar firm and Boonstra landed consulting gigs with clients ranging from momtrepreneurs she’d met in the school parking lot to multinational retailers. (In between all of this, she found the time to make Buzzer, a security app that has already saved a few lives.)
While consulting with several big retailers, she was struck by their seemingly unanimous fear of the mass market. “No one disputed the size of the opportunity,” recalls Boonstra. “But they all saw it as too messy [no money] and too dangerous.” Instead, they focused their online attentions on the middle class and left poor South Africans to continue shopping the way they’d always done — using expensive public transport to traipse around cities designed according to apartheid, with most stores in formerly whites-only areas.
Which brings us to Yebo Fresh’s debut after the 2017 fires. The company now operates from a warehouse near the airport and eight of the core team of 10 actually live in the communities it serves. “Jessica treats us like family and she always asks for our input,” says Faith Depa, Yebo Fresh’s customer service manager. Depa’s fingerprints are all over the company’s catalog, for example, which is big on the kind of combo deals that appeal to their clientele.
It also combines low and high tech seamlessly. Orders can be completed on old-fashioned paper checklists taken from door-to-door sales agents, via WhatsApp or through a conventional website — but they’re all digitized and synced with a payment gateway. Most customers prefer to pay upon receipt, using debit cards or cash (not encouraged, for safety reasons).
Of course, there have been challenges. “Some people were even scared of being robbed by the driver,” says Depa. “But the more time we spend walking the streets, the more they trust us.” The team also has to meet customers’ extremely high expectations. “In the beginning, I thought it would be all about price,” Boonstra reflects. “But if you only have enough cash for five onions, you can’t afford to pay for a rotten one.”
All these lessons, Boonstra reckons, only serve to make the company stronger. “At the moment, we are just trying to keep up with demand in Cape Town during the coronavirus,” she says. “But there’s a whole continent of people facing the same weekly issues. The problem is just gigantic.”
Talk about trying to save every bird that flies into the window.
- Nick Dall, OZY Author Contact Nick Dall