“Africa’s e-commerce is still operating at the surface level. We have not yet cracked e-commerce on the continent. There are so many problems that still need to be solved.” – Aderonke Ajose-Adeyemi, Founder and CEO, Losode.
With the likes of Jumia and Konga in Nigeria, one would assume Nigeria has a standard e-commerce infrastructure, a framework that could serve as soft-landing for new entrants. Aderonke “Ade” Ajose-Adeyemi thinks otherwise. “Africa does not have an e-commerce infrastructure,” she says.
Ade studied Electrical and Electronics Engineering at Queen Mary University London. Her career in tech spans about two decades of working with major financial services companies across Latin America, Europe, the Middle East and the United States. Some of the companies she worked full-time with as a senior project consultant include Lloyds Banking Group (London), Credit Suisse (London), and MS Amlin (London). Other organisations include KPMG and Thomson Reuters.
She is the founder and CEO of Losode, an e-commerce platform for African vendors. The startup, which initially launched in the UK as a fashion platform, three years ago, has evolved into something bigger. “It is beyond fashion. It is business, and we are laying the digital tracks for e-commerce to thrive in Africa,” she said.
What does Losode mean?
Losode is a Yoruba phrase, ‘Lo si ode’, which means let’s go to town or let’s go party, depending on the dialect.
How did your business evolve over time?
It started as a platform to sell clothes and fashion items in our earliest markets, UK and America. But when we arrived in Nigeria, we realised that the e-commerce sector had poor logistics infrastructure. For us, it would be difficult to do e-commerce on a rickety logistics infrastructure. We thought that if we do not solve the logistics-for-e-commerce problem, it would be hard to meet the needs of buyers or sellers in rural communities as we would have done for those in megacities like Lagos and Port Harcourt.
So, we decided to solve the fundamental problem by building a proper logistics infrastructure for e-commerce. Over the past few years, we have been able to craft and articulate our solutions very clearly. We have moved to build the infrastructure for trade and e-commerce across Africa. We are particular about how we expose African vendors to the world, keeping the continent in the global spotlight.
What has the building process been like?
It’s not been easy, but it has been an interesting journey because we are solving a critical problem. Our initial intention in the Nigerian market was not to build a logistics company for Losode. We wanted our e-commerce platform to ride on an already existing logistics infrastructure. So, we spoke to about five notable e-commerce platforms in Nigeria to know if they had built a logistics infrastructure we could ride on. Unfortunately, none had.
We found that these companies were all building on the surface, aggregating and using the prices of bigger logistic companies like DHL. No one thought to create a proper zoning solution, as DHL zones differently. For example, people can ship goods from Lagos to Abakaliki with DHL or any logistics company. But who is shipping from Abakaliki to Lagos, and what is the price? Players in the sector cannot adequately ship goods interstate and inter-cities, especially in states that are not as urbanised as Lagos.
Nigeria is Africa’s largest market with a population of over 200 million people. It is one of the Big Four countries leading the continent’s tech ecosystem. Yet, its market is largely untapped due to poor infrastructure. At the centre of Nigeria’s many problems is poor infrastructure at every level. This problem has limited the growth of businesses, caused the death of some, as well as discouraged the rise of a few others. It only takes resilience and impact-mindedness for entrepreneurs like Ade to want to come into the country to build sustainable businesses.
Nigeria is one of Africa’s leading tech hubs but only a few people enjoy the solutions that tech brings, particularly those in the cities. Nigeria has 36 states, with 774 local government areas (LGAs) but only a few cities including Lagos, Port Harcourt, Abuja, Ibadan, Abeokuta, Kaduna, Warri, Kano and Cross Rivers truly benefit from its tech economy.
Although startups would love to take their solutions to every part of the country, a lack of infrastructure makes it very difficult. Sadly, this is not exclusively a Nigerian problem. It is among the major issues businesses confront when launching in different parts of Africa. Most African countries lack the required infrastructure to aid the soft-landing of new businesses, forcing entrepreneurs to work extra hard to get their ideas off the ground. This is why Lososde had to evolve, to nip the problem in the bud.
So, what solution have you provided for this problem?
We are solving the problem by creating an all-inclusive zoning system for logistics to enable effective e-commerce. There are 36 states in Nigeria. If we multiply that, we would typically have 1296 routes – excluding the routes within each state. We are now capturing every state, city, village and street through technology. We are developing digital rail tracks, so to say. Losode is connecting the dots to ensure trade and commerce happen effectively through continents, countries, and communities within Africa. So that sellers in rural communities can sell their products to a global audience without third parties or the fear of poor access to logistics.
How many markets does Losode operate in?
Currently, we are registered in the US, the UK, and Nigeria. These are the three markets we are based in. In Africa, we are mainly in Nigeria. There is a lot of work to be done there. We want to re-empower the entrepreneurs in Nigeria. We plan to expand to other African countries from there.
What stage is the business at, currently, and how receptive has the African market been to it?
We just completed our platform and are now launching in the African market. When we did our MVP, the reception we got was huge. We had over five hundred sellers come to our platform at that point. So, we are actively pushing our solution into the Nigerian market, showing people what we do.
When your Nigeria-based customers buy products from UK vendors on your platform, how do they get their shipments?
We deliver through 3rd party logistics companies. Customers would only pay a delivery fee for products and then ship from our platform to Nigeria or to any part of the world.
Have you raised any funding?
Not yet. So far, we have invested over $500, 000 into the business. I bootstrapped Losode from my finances. But we are currently on a seed round for $3 million.
Since your launch, what have been some of the challenges you have experienced?
Finding the right team and the right partners has been a challenge.
What are you passionate about?
Technology. I am very passionate about building and solving problems. I am very passionate about entrepreneurship.
As an e-commerce builder, what are the few thoughts that boggle your mind of late?
What would give Neiman Marcus the confidence to come into the Nigerian market? Nothing. They could eventually set up their business there, but policy changes and currency volatility may threaten their growth prospect.
Again. Why is Starbucks not in Nigeria? It is in Mexico. Whereas, the Nigerian market is bigger than the Mexican market. This is a problem that e-commerce can fix, and that is a problem we have in Africa. The quicker we understand that the world is not coming into Africa just yet and Africa is not visible enough globally, the sooner we will take this seriously.
What are the main challenges of Africa’s e-commerce sector?
The truth is that Africa’s e-commerce is still operating at the surface level. We have not yet cracked e-commerce in Africa. There are so many problems to solve.
The two main problems are payment and logistics. We have people like Flutterwaves and Paystack that have done great jobs in terms of payment but technology doesn’t do anything new, it replicates what already exists. For example, there is a wallet system where customers are required to fund their wallets before shipment. Would a customer conveniently fund their wallet with N10,000 to ship a product worth $5,000?
Also, infrastructure for the proper distribution of goods across borders does not exist. Building blocks do not exist. More so, there are other problems like poor regulations and a lack of statutory right protection. That reduces people’s confidence in trading on the continent.
What is the long-term goal for Losode?
To empower all cities and villages in Africa. To become responsible for 30 to 40 per cent of their GDP. We want to reach a point where communities can say that Lososde is the reason why they are thriving. If we can achieve this, Losode will have done what it set out to do.