Fortune News | Feb 27,2020
Asgdom Abraha, a businessman living in Addis Abeba, always felt there was something missing in the thriving fast-food industry of the city. All of this changed once he began using food delivery services.
A 43-year-old father of two, Asgdom is a customer of Debonairs Pizza and makes use of their delivery services to bring food to his doorstep. He places orders from the eatery at least once a week for members of his family and friends.
"The food delivery service made my life easier in terms of avoiding traffic and saving time and money,” said Asegdom. “It is also useful for people in hospitals and office workers.’’
Debonairs is but one of many companies that gives delivery services. Nonetheless, many of them are entirely dedicated to the delivery of food items and do not double as restaurants. One of these is Asbeza, which was founded by Bereket Tadesse.
A father of two in his early 30s, Bereket was always at a loss to find time to buy groceries. He did not wait for a delivery service to pop up somewhere and make life easier for him. He decided to launch one himself instead.
The company was called Asbeza, and it started giving service in September 2018. Located on Africa Avenue, the company employs just three individuals.
“It is an online grocery delivery service that is exclusively designed for the Addis Abeba market,” he said.
Asbeza started the service with 400,000 Br in capital. It is now accessible through a smartphone application and a website, but it did not immediately take off.
The delivery companies provided online ordering service through website and application.
When Bereket had the idea of creating the online shopping business, he assumed that people, especially youngsters, would know more about the technology and use it.
“Initially, I found it difficult to promote the online business before I finally was able to break through after a lot of consistent attempts,” he says. ‘‘Our value is that customers can focus on their other business, feeling confident that they will get quality delivery service from us."
Asbeza offers two kinds of delivery services using a motorbike and a van. The first kind delivers within four hours and charges 106 Br if the goods being delivered are less than 1,000 Br. The second one carries out delivery in 24 hours and costs 96 Br. Last year, the company received 720 orders from various customers.
There are 180 types of grocery items for consumers to choose from, and the delivery is made from Fresh Corner chains. The quality and freshness of the food items is checked by the company before buying and delivering them, according to Bereket. Customers can make payments through CBE Birr and M-Birr.
In the future, the company plans to deliver food from restaurants and work with the likes of Savor Restaurant and Deli Prime once it increases the number of its vans.
Nonetheless, the delivery service provider is not without its challenges, which stem from customers, internet provision and the government.
‘‘Though not usual, some customers switch off their phones after ordering food,” Bereket says. “And as the demand for the service increases, internet speed has remained slow, making it difficult to find the location of orders.”
It is not just Asbeza that succeeded situating itself inside the food industry's value chain. There are also Onkato, Telalaki, Deliver Addis, Kedame Gebeya and 125 Food Catering.
The owner of Asbeza Grocery takes a photo of products to release on the website.
Like Asbeza, Onkato was launched after its founder, Henok Debekulu, saw a gap in the delivery service industry.
The company was established with half a million Br in capital and six employees in Lideta. The company currently only uses a single van to deliver items.
“We are going to add more vehicles to increase our service and ensure that customers’ time and money is not wasted,” said Henok.
Similar to Asbeza, which is registered by the Ministry of Trade & Industry as a computer network designing company, one of Onkato's major challenges was getting a business license since the government does not yet recognize these types of businesses.
“These businesses are increasing at an alarming rate, so the government should provide a legal framework under which we can operate,” says Henok.
Despite the delivery services’ lamentations, the Ministry is currently not planning on drafting a legal framework for such businesses.
‘‘Any company can use modern technology such as giving online delivery services to widen their source of income,” said Birhanu Tegegen, director of the Trade Registration & Licensing Office at the Ministry. “Other than supporting companies that are already in the restaurant business, the Ministry does not recognize food delivery providers.”
Debonairs, a South African-based pizza chain founded in 1991, is one of the few eateries that provide delivery services as well as being a restaurant. Spread throughout Africa, the Middle East and Europe, the restaurant chain has 2,900 spots around the world.
Debonairs has three restaurants in Addis Abeba, located in Bole Atlas, Meskel Flower and Sarbet areas, and plans to open two more in the city. It first invested 25 million dollars when entering the Ethiopian market.
With 65pc of its products provided through free delivery services, Debonairs has a 20-team delivery crew with 20 motorbikes. The delivery service is provided for free.
‘‘We provide the delivery services for free, because customers shouldn’t be exposed to unnecessary charges, and we can successfully promote our business and gauge where our customers are,” adds Samson Demelash, a partner to Debonairs’ Ethiopian chains.
Gete Andualem (PhD), a lecturer at Addis Abeba University's College of Business & Economics, believes that the delivery services will be most advantageous to people, especially the young, who spend their whole day at work by saving their time, money and effort. However, Gete questions just how many Ethiopians are aware of online shopping.
‘‘There are a lot of people who are tech savvy, but I doubt many of them use delivery services through the internet even though they know that the service exists,” said Gete.
He also emphasizes the significant gap to be filled in regulating and giving licenses to the delivery service companies.
“As more and more of these digital-based businesses take root, the government should provide legal frameworks to ensure that they provide modern service,” he said.
PUBLISHED ON Nov 23,2019 [ VOL 20 , NO 1021]
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