Kenyan startup Sky.Garden is seeing 400 per cent month-on-month growth in transaction volumes on its online marketplace that allows informal traders, SMEs and established businesses to sell their products.
Founded in mid-2015 by Christian Grubak and Martin Majlund, and launched to the general public in March of this year, Sky.Garden provides an easy-to-use platform that takes into account a user’s possibly elementary understanding of e-commerce via safe and secure payment and shipping.
“It plugs in localised solutions and helps them to reach customers that would otherwise fall out of their immediate reach. By targeting these specific traders, they are in turn able to access their existing customer bases and propel their overall visibility via social networking to similar customers of the same demographic,” managing director Daniel Maison told Disrupt Africa.
“Sky.Garden is therefore the pioneering gateway for the masses to take part in a digital economy without having to bear the heavy burden of capitalising new physical businesses.”
Maison said Sky.Garden has exceeded its expectations since it went live in March, with transaction volumes increasing by 400 per cent each month. Bootstrapped since its launch, the startup is aiming for a seed round by the end of this year.
Sky.Garden is currently serving the Nairobi area, with Maison saying it plans to adopt a “Big Cities strategy” whereby it targets urban areas in emerging markets.
“Our plan is to expand into the main cities in East Africa and scale this to the rest of the Sub- Saharan region, adapting to each market accordingly,” he said.
Merchants signing up to the platform pay no registration or monthly fees, with Sky.Garden working on a commission basis, and taking a service fee of eight per cent on every transaction.
Maison said Sky.Garden is currently processing an average of 16 orders a day, with an average basket size of US$39.50.
“Due to the high uptake of the platform by sellers, we expect to exceed our volumes exponentially within the next year,” he said.
According to him, Sky.Garden’s growth journey has attracted the interest of a few big brands keen on tapping into the mass demographic via an online solution.
“This has resulted in a model whereby these brands are posting their inventory onto the platform for end customers to purchase through associated businesses. This passes on savings to the customers and allows for the associated businesses to purchase stocks at affordable prices – as and when they’re needed,” Maison said.
“We therefore created a business model whereby the big brands end up benefiting from the creation of numerous distribution points in the smaller businesses that use their products; without the need of breaking bulk, mobilising distribution points or having boots on the ground to check on stock points and merchandising functions.”
Sky.Garden offers a range of options for businesses to choose from depending on their needs. Smaller businesses and informal traders take up the freemium model where they get charged commission on revenues, while more established businesses can opt for an enterprise model that includes several bespoke services, such as the ability to connect their distribution fleets and integrate their own payment gateways at a monthly premium.
“Sky.Garden is mobile commerce technology built specifically for African businesses. From a tech perspective, we’re a Shopify/Amazon crossover, but built for African standards and structures. A position in the market that none yet has claimed,” said Maison.
“Existing e-commerce platforms and marketplaces are tailored to the middle or upper class populace who are looking for convenience and access to alternative goods and services. These are offered at high premiums which are out of reach to the bulk of the African population.”
In comparison, Maison said Sky.Garden actively targets the “marginalised masses” by offering a platform for them to trade online with zero overheads and minimal transaction fees. The startup also takes into account the low penetration rate of desktop mediums and relies on mobile technology.
The company is currently capturing as much data on merchant and customer behaviour as possible in order for us to build “smart” technology though AI and machine learning to secure and maintain a competitive edge, Maison said.
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