Sokowatch: Spurring Small Retailers’ Growth And Success
On their website, Sokowatch is described as an innovative approach to last mile distribution. According to co-founder Josh Middleman, he and fellow co-founder Daniel Yu recognized a problem with Africa’s retail market and they developed a product to solve it. They realized that no one was serving the last mile in what Josh Middleman termed as a vertical distribution channel. Sokowatch was created to provide this distribution channel which is enhanced by technology developed by the Sokowatch team.
How it works is that Sokowatch purchases goods directly from manufacturers or the manufacturer’s exclusive distributor. They store these goods and load them into their white unbranded Tuk Tuks manned by their agents who deliver the goods to various retailers. The retailers order the goods by sending an SMS to or calling Sokowatch or by flagging down one of the agents in the white Tuk Tuks. They make their order and are registered into the system and receive their goods within a few hours. Delivery is free and payment for the goods is through cash or M-Pesa. The Tuk Tuks are pre-loaded each day and serve different areas of the city.
Sokowatch targets the independent retailers, the neighbourhood kiosks, vibandas and eco-marts. With the data Sokowatch is able to collect from the orders made by retailers, they are able to know which goods are needed in certain areas and stock the Tuk Tuks accordingly. The Sokowatch distribution system solves the issue of stock outs faced by most retailers. They are also able to save the retailers time and money that would have been spent gathering stock from different avenues.
Apart from distribution, Sokowatch is able to collect data through their Agent Apps and the Customer Apps that are slowly being rolled out. Their agent apps record the GPS coordinates of the shop where goods are being delivered. This has enabled Sokowatch to know the number and location of a large number of small retailers in Nairobi, information no one else has. The app also enables them to keep track of how much of a particular product is being sold in a certain area. This data can be useful to manufacturers, market researchers and financiers.
A third product that Sokowatch is interested in launching in their vision to spur the growth and success of small retailers in Africa, is financial services. Sokowatch already have plans in place to start providing credit to retailers. According to Josh Middleman, their technology enables them to figure out a retailer’s credit score and using this, they will be able to calculate how much credit a retailer can access. They also have plans to offer capital loans in partnership with a financial institution. Additionally, they plan to offer insurance to these small retailers who are at risk of losing their stock through dangerous situations like election related violence, fire, flooding and others.
According to Josh Middleman, Sokowatch has a vision to provide services and products that add value to small retailers across Africa. Currently, Sokowatch is operating in Nairobi and Dar es Salaam. They plan to expand to Mombasa and to start operations in a third East African country by the end of the year.
Throughout their journey, one of the challenges that Sokowatch has faced is the issue of market instability caused by various factors. This has led retailers to either stockpile or to not order any stock. Another challenge they have faced is keeping up with the huge demand for their product as well as trying to maintain their growth within a sustainable trajectory to ensure their longevity.
Josh Middleman’s advice to budding entrepreneurs is to embrace failure as one cannot succeed without it. Additionally, entrepreneurs should learn how to pivot. According to Josh, holding on too tightly to the original idea of your business can lead to its death. One should be prepared to accept change and grow with it.
Sokowatch is definitely a startup to watch not only as they continue to expand and grow as a distribution network that can cover Nairobi like no other wholesaler can, but also as a company that is providing products to small retailers to boost their growth and help in their success.
