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Africa retail tech start-up eyes electric tuk tuks to cut costs

African start-up Sokowatch, an online supplier of goods to micro retailers, is deploying electric tuk tuks, a first on the continent, that could slash fleet maintenance costs by more than 50%, according to an official.

The Kenya-based firm developed an app on which small retailers in east Africa can log orders of various goods to restock their shops.

Once the orders are received, Sokowatch then dispatches the goods from its warehouses to the retailers. In a region where cities are plagued by gridlock, with narrow and pot holed roads, Sokowatch adopted the three-wheeled rickshaws as a primary means of transport to deliver the goods.

The move is a potentially welcome effort in a region where cities are grappling with growing air pollution caused by exhaust from beat-up and poorly serviced vehicles.

“We truly do believe that electric vehicles are the future of mobility … specifically in Africa, especially when it comes to powering commerce or retail across the continent,” Daniel Yu, Sokowatch’s chief executive, told Reuters.

The firm has so far deployed eight locally assembled electric tuk tuks in Uganda, and is looking to deploy an additional eight in Rwanda before rolling out the vehicles to Kenya and Tanzania.

“Our preliminary analysis indicates that we can achieve significant cost savings, perhaps even more than 50% on what we currently pay to operate our traditional fleet.”

Also read: Ecobodaa to launch Kenya’s first electric motorbike by 2021

Sokowatch currently has 178 gasoline-powered tuk tuks, in addition to the eight electric vehicles in Uganda, that it uses to deliver goods from its warehouses to 17,000 micro retailers across nine cities in east Africa.

“Over time we do believe that if these pilots (in Uganda and Rwanda) prove successful then we can deploy possibly hundreds of these vehicles across east Africa,” he said.

Sokowatch, which has been operating for three years, negotiates big discounts with manufacturers, which then deliver their goods to Sokowatch’s 40 warehouses across the region.

The firm then is able to leverage those discounts to supply the small shops at zero transport cost.

Yu said they were looking to expand elsewhere in Africa after their success in east Africa and capture more of the continent’s small retailers the firm estimates at 10 million.

“We believe that our model can be successful in pretty much every country across the (African) continent. We are looking at expansion into Francophone west Africa likely in the next period of 2021.”

Source: Reuters

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