The Little Black Door app makes luxury wardrobes shareable, resalable, and sustainable

When Lexi Willetts and Marina Pengilly realized they could make as much as £30,000 a year reselling their luxury clothes and accessories online, they resolved to create a solution for modern women who are already well-versed in the behaviors of Instagram and the sharing economy. Their solution, Little Black Door, has just gone live on the iOS store, and allows women to see, style and share their wardrobes with friends and followers. It also connects them to resale platforms, unlocking a vastly more environmental-friendly and sustainable way to shop for high-quality fashion. And with the COVID-19 pandemic hitting the fashion world, the app is set to benefit, as consumers head to the re-sale of luxury, rather than new items.

As Willetts puts it: “This started as a response to our own bad wardrobe behaviors. Our overbuying often because we forgot what we had, often thinking to buy rather than borrow from friends. Plus, we saw the headache of creating resale listings. Realizing that so much of our interactions were online, thus producing very rich e-receipt data, we set about thinking of how we could make use of that to create better wardrobe engagement and reduce our overbuying of irrelevant, cheap fashion.”

The problem with platforms like this has always been: how to digitize the wardrobe in the first place. Most people can’t be bothered to go to the trouble. But this app takes a fresh approach. It concentrates on using wardrobe purchase data and leveraging social sharing behavior to more easily create a digital wardrobe. It also allows the wardrobe to be connected with retail, making it far easier to start the resale journey of selling unwanted items.

The resulting LBD app appears at first to be a sort of ‘Instagram and Depop’ mashup. Users add items to their virtual wardrobe which then employs image recognition AI and natural language processing to figure out what the item is, and tries to categorize it as well. It checks with the user if something is a t-shirt, black, short sleeve, minimalism, urban casual, etc. before it’s confirmed into the wardrobe.

But perhaps more interestingly, the LBD app will ingest receipts of items purchased via email. This means the wardrobe can be built up from new or existing data the user already has. Once the wardrobe is built inside the app, the user can see the clothes and categories, their total wardrobe spend, and create “lookbooks” which they can share with friends and followers to comment on. Friends can then borrow items or users can send items to resale via the ‘swipe to sell’ feature.

Most other wardrobe apps haven’t created a ‘viral loop’ whereby the user is incentivized to use the app daily. LBD has added social features to create a community-driven platform that is almost like an ‘Instagram for fashion’.

Previous ‘wardrobe apps’ like this have obsessed over whether the app can recognize clothes or not, but most don’t work well. The better use of AI, as LBD has realized, is to use receipts data and purchase histories, plus retail partner links, to add to wardrobes. This means the wardrobe upload feature isn’t the primary focus, as it is trumped by wardrobe item data. It’s on this basis that they can create more useful and – crucially – playful features.

“We’ve designed features to entertain and engage the user relating to their wardrobe. We create ease of sharing with friends, tapping into the sharing economy mindset… Moreover, the app is designed to build a culture of conscious consumption, encouraging users to buy less ‘fast fashion’, invest in quality pieces, and wear and share the contents of their closets,” says Willetts.

So the app is interesting, but what about the business model? Effectively, LBD is creating a data play around women’s wardrobes. They could use the data to create advertising for relevant and sustainable brands; partnerships with retailers; value-added services; a resale platform with commissions; verified sellers; and a premium version for high-end users with high-end wardrobes.

LBD is hitting four key trends. The rise of resale (see Real Real, Depop); the rise in sharing wardrobe behaviors (rentals like Rent the Runway, Hurr); the rise in the use of AI in e-commence; and the rise of re-receipts and online sales.

The fashion market is big. The global clothing and apparel market is worth $758.4bn and is over 50% female. But although that market has been hit by the COV-19 pandemic – as people needed to dress up less during lockdown – it is recovering, and now with a client base far more aware of the issues of sustainability. So LBD is set to benefit from that general ‘re-set’.

And, in the coming recession, it will be cheaper to shop second hand from sellers you have an insight into (your friends) as well as selling items to re-sale. For retail partners, they get better data on what consumers really do within the privacy of their wardrobes, allowing them to produce and sell more relevant and more targeted collections, reducing inventory waste, and generating a positive environmental impact.

Africa Roundup: DHL invests in MallforAfrica, Zipline launches in US, Novastar raises $200M

Events in May offered support to the thesis that Africa can incubate tech with global application.

Two startups that developed their business models on the continent — MallforAfrica and Zipline — were tapped by international interests.

DHL acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup.

Link Commerce offers a white-label solution for doing online-sales in emerging markets.

Retailers can plug into the company’s platform to create a web-based storefront that manages payments and logistics.

Nigerian Chris Folayan founded MallforAfrica in 2011 to bridge a gap in supply and demand for the continent’s consumer markets. While living in the U.S., Folayan noted a common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home.

With MallforAfrica Folayan aimed to allow people on the continent to purchase goods from global retailers directly online.

The e-commerce site went on to onboard over 250 global retailers and now employs 30 people at order processing facilities in Oregon and the UK.

Folayan has elevated Link Commerce now as the lead company above MallforAfrica.com. He and DHL plan to extend the platform to emerging markets around the world and offer it to companies who want to wrap an online stores, payments and logistics solution around their core business

“Right now the focus is on Africa…but we’re taking this global,” Folayan said.

Another startup developed in Africa, Zipline, was tapped by U.S. healthcare provider Novant for drone delivery of critical medical supplies in the fight against COVID-19.

The two announced a partnership whereby Zipline’s drones will make 32-mile flights on two routes between Novant Health’s North Carolina emergency drone fulfillment center and the non-profit’s medical center in Huntersville — where frontline healthcare workers are treating coronavirus patients.

Zipline and Novant are touting the arrangement as the first authorized long-range drone logistics delivery flight program in the U.S. The activity has gained approvals by the U.S. Federal Aviation Administration and North Carolina’s Department of Transportation.

The story behind the Novant, Zipline UAV collaboration has a twist: the capabilities for the U.S. operation were developed primarily in Africa. Zipline has a test facility in the San Francisco area, but spent several years configuring its drone delivery model in Rwanda and Ghana.

Image Credits: Novant Health

Co-founded in 2014 by Americans Keller Rinaudo,  Keenan Wyrobek and Will Hetzler, Zipline designs its own UAVs, launch systems and logistics software for distribution of critical medical supplies.

The company turned to East Africa in 2016, entering a partnership with the government of Rwanda to test and deploy its drone service in that country. Zipline went live with UAV distribution of life-saving medical supplies in Rwanda in late 2016, claiming the first national drone-delivery program at scale in the world.

The company expanded to Ghana in 2016, where in addition to delivering blood and vaccines by drone, it now distributes COVID-19-related medication and lab samples.

In addition to partner Novant Health, Zipline has caught the attention of big logistics providers, such as UPS — which has supported (and studied) the startup’s African operations back to 2016.

The presidents of Rwanda and Ghana  — Paul Kagame and Nana Akufo-Addo — were instrumental in supporting Zipline’s partnerships in their countries. Other nations on the continent, such as Kenya,  South Africa and Zambia, continue to advance commercial drone testing and novel approaches to regulating the sector.

African startups have another $100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos-based investment group announced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck .

On demand mobility powered by electric and solar is coming to Africa.

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, launched an electric taxi service and charging network in Zimbabwe this week with plans to expand across the continent.

The South Africa-headquartered company is using Nissan Leaf EVs and has developed its own solar-powered charging stations. Vaya is finalizing partnerships to take its electric taxi services on the road to countries that could include Kenya, Nigeria, South Africa and Zambia, Vaya Mobility CEO Dorothy Zimuto told TechCrunch.

The initiative comes as Africa’s on-demand mobility market has been in full swing for several years, with startups, investors and the larger ride-hail players aiming to bring movement of people and goods to digital platforms.

Uber and Bolt have been operating in Africa’s major economies since 2015, where there are also a number of local app-based taxi startups. Over the last year, there’s been some movement on the continent toward developing EVs for ride-hail and delivery use, primarily around motorcycles.

Beyond environmental benefits, Vaya highlights economic gains for passengers and drivers of shifting to electric in Africa’s taxi markets, where fuel costs compared to personal income is generally high for drivers.

Using solar panels to power the charging station network also helps Vaya’s new EV program overcome some of challenges in Africa’s electricity grid.

Vaya is exploring EV options for other on-demand transit applications — from min-buses to Tuk Tuk taxis.

In more downbeat news in May, Africa-focused tech talent accelerator Andela had layoffs and salary reductions as a result of the economic impact of the COVID-19 crisis, CEO Jeremy Johnson confirmed to TechCrunch.

The compensation and staff reductions of 135 bring Andela’s headcount down to 1,199 employees. None of Andela’s engineers were included in the layoffs.

Backed by $181 million in VC from investors that include the Chan Zuckerberg Initiative, the startup’s client-base is comprised of more than 200 global companies that pay for the African developers Andela selects to work on projects.

There’s been a drop in the demand for Andela’s services, according to Johnson.

More Africa-related stories @TechCrunch  

African tech around the ‘net

Ooni’s Koda 16 pizza oven is the rare kitchen gadget that delivers on its promise

Ooni (nee Uuni), has been around for a few years now, but its latest oven, the Koda 16, launched in March. Just like everyone else, I’ve been cooped up at home for weeks with nothing but all of the projects I would get around to one day.

At the top of my list was learning how to make decent pizza at home (we don’t have many decent pizzaiolo’s in my town). I’d been hearing about the Ooni oven for a while — mostly via Neven Mrgan’s great Instagram feed — so I spring for the Koda 13” and started firing some pies.

I was immediately enamored with the eye popping results. Chewy, crispy, well cooked Neopolitain-style pizza within 30 minutes of taking it out of the box. And I’m not exaggerating. After a couple of pizza launching disasters (this is not as easy as it looks, people), I was eating the product of my own hands and the Ooni’s 800+ degree baking surface. While not even an advanced amateur chef, I have always had somewhat of an aversion to single-use gadgets. Technique always wins, right?

The problem with that thinking is that it is really impossible to cook true Neopolitain pizza at home in the US because our ovens just don’t get hot enough. A ton of experimental dough situations have resulted in a few workable New York style pizza recipes for 500 degree ovens. But for thinner crusts there is zero substitute for that true 800-1000 degree cooking environment.

The Ooni delivers that in under 20 minutes attached to a bog standard propane tank. It’s brilliant.

Ooni co-founder Kristian Tapaninaho started messing around with building a decent pizza oven in 2010. He got into making home pies and realized that there was pretty much no way to do it other than building a large, expensive oven in his back yard. He began prototyping what became the company’s original oven in 2012, and he says that the original oven’s design stemmed from a super simple yet super obvious (in hindsight) design constraint: what could they ship affordably?

Due to shipping restrictions, it had to be under 10kg and had to fit in a certain footprint. Everything piece of design work on the first oven stemmed from those constraints. Why, for instance, does the Ooni oven have 3 legs? Because the 4th one would have put them over weight.

Within those constraints, the original oven took shape — delivering that super high-heat surface with a simple wood-fired unit that more than doubled its original funding goal on Kickstarter. Kristian and co-founder Darina Garland defined this high-heat, high results at-home outdoor pizza oven market at scale, along with other later entrants like Roccbox.

I had a bit of a chat with Kristian about how Ooni was doing lately, with the specter of coronavirus and the new business realities that have resulted.

“This COVID-19 situation began for us in mid January as our suppliers started informing us that they were delaying return to work from Chinese New Year,” Kristian said. “At the time the worry was if we’d have enough supply for the summer which is of course peak season for us. As our supply chain was restarting, it was clear that we’d have similar lockdowns in our main markets as well. Overall, however, we started the year at a strong inventory position which helped buffer any interruptions.”

He says that Ooni was lucky given that the initial production run of the Ooni 16 was already in warehouses by the time things got really hairy in Edinburgh and the surrounding areas. And the team was fairly ready for the new challenge of stay-at-home work.

“Much of our team comms already happened over Slack so the team’s been really quite well setup for working from home,” he told me. “We have great relationships with our 3rd party logistics providers and while they’ve been incredibly busy, they’ve been able to maintain a good level of service, at least in the grand scheme of things.”

Yeah, but how does it work?

Once Kristian saw that I was playing with my Ooni 13 he offered to send the newly launched 16″ model over to play with. I jumped at the chance to make a bigger pie.

My experiences with the Ooni ovens so far have been nothing short of revelatory. Though I’ve pondered indoor options like the Breville Smart Oven, I knew in my heart that I wanted that brilliant taste that comes from live fire and the high heat that would let me enjoy super thin crust pizzas. I’ve now fired over three dozen pizzas in the Ooni and am coming to know it a bit better. Its recovery time, rotation needs and cooking characteristics. I have never used a more enjoyable cooking utensil.

I’ve tried a few dough recipes, because I know I’ll get questions about it, but I’ve used two to good effect. Ooni’s own recommended dough (though I hydrate a bit more) and this Peter Reinhart recipe, recommended to me by Richie Nakano.

The pizzas that result are bursting with umami. The oven enables that potent combination of cheese, sauce and randomly distributed carbonization that combines into the perfect bite. Your pie goes in somewhat pedestrian — whitish dough, red sauce, hunks of fresh mozzarella — and you see it come to life right in front of your eyes.  Within 60-90 seconds, you’ve transmogrified the simple ingredients into a hot endocrine rush of savory, chewy flavor.

As I mentioned before, the setup is insanely simple. Flip out the legs, put it on an outdoor surface with some support and attach a propane tank. An instant of lighting knob work and you’re free to step away. Fifteen minutes later and you’ve got a cooking environment to die for. The flip down legs make the 13” model super great for taking camping or anywhere you want to go to create your own pizza party. Ooni even sells a carrying case.

The design of the oven’s upper shell means that all of the heat is redirected inwards, letting the baking surface reach 850 degrees easily in the center, up to 1000 degrees near the back. The Koda 16 has such an incredibly roomy cooking surface that it is easy to see to the sides and around your pizza a bit to tell how the crust is rising and how the leoparding is coming along. Spinning your pie mid-cook is such an important part of this kind of oven and the bigger mouth is smashing for this.

Heck I even cooked steak in it, to mouth watering results.

“Our core message has always been ‘great restaurant quality pizza at home’ and while the situation is what it is, more people spending more time at home looking for great home cooking options has been strong for our online sales,” Kristian said when I asked him about whether more people were discovering Ooni now. “Pizza making is a great way to have fun family time together. It’s about those shared experiences that bring people together.”

This mirrors my experiences so far. I’m not precisely ‘good’ at this yet, but I’m plugging away and the Ooni makes even my misses delicious. This weekend I was even confident enough to hold a socially distanced pizza pick-up party. Friends and family put in their orders and I fired a dozen pies of all kinds. Though I couldn’t hug them, I could safely hand them a freshly fired pizza and to most Italians like me, that’s probably better.

In my mind, the Ooni Koda pulls off a rare trifecta of kitchen gadgets: It retains the joy and energy of live flame, delivers completely on its core premise and still remains incredibly easy to use. Highly recommend.

 

Africa e-tailer Jumia reports first full-year results post NYSE IPO

Pan-African e-commerce company Jumia got into the black (by a small amount) on its gross profit vs. fulfillment expenses, expanded financial services and still posted losses.

The online sales company, with an operations center in China, also anticipates some negative impact on 2020 growth from the coronavirus outbreak, CEO Sacha Poigonnec said.

These were highlights today for Jumia’s fourth-quarter and full-year results — 10 months after the company became the first vc-backed startup in Africa to go public on a major exchange.

The results

Jumia — with online goods and services verticals in 11 countries — posted 2019 revenues of €160 million, representing growth of 24% over 2018. The company increased its annual active customer base in the fourth-quarter by 54%, to 6.1 million, from 4.0 million for the same period last year.

Jumia’s 2019 Gross Merchandise Value (GMV) — the total amount of goods sold over the period — contracted by 3% to €301 million in the fourth-quarter.

Poignonnec attributed the decline to “business mix re-balancing”, which entailed reducing expenditures on promotions. The company also saw a contraction in sales of phones and electronics, which impacted GMV.

The online retailer had a 49% increase in orders from 5.5 million in Q4 2018 to 8.3 million in Q4 2019.

Perhaps the brightest spot in Jumia’s 2019 performance was the company’s ability to reach a gross profit of €1.0 million after deducting fulfillment expenses in Q4.

That obviously doesn’t get them to profitability over all the company’s other expenses, but fulfillment costs have been historically high for Jumia as an online-retailer in Africa.

The overall pattern of growing revenues and customers YoY has been consistent for Jumia.

But so too have the company’s losses, which widened 34% in 2019 to €227.9 million, compared to €169.7 million in 2018. Negative EBITDA for Q4 increased 5% to €51.2 million from €48.6 over the same period in 2018.

CEO Sacha Poignonnec pointed to Jumia’s ability in Q4 to reach positive gross-profit over fulfillment expenses — one of the company’s largest costs — as a sign it could eventually get into the black overall.

“As we reach these milestones we’ll bring new milestones. This year we were profitable after fulfillment expenses and one day we’ll be profitable after marketing [expenses] and so on and so forth,” he said.

What’s new

Jumia exited several countries in 2019 — suspending e-commerce operations in Tanzania, Cameroon, and Rwanda. “We believe those countries have…potential in the long-term but decided to allocate our resources to the countries that best support our long-term growth and path to profitability,” said Poignonnec.

Jumia also saw lift in its JumiaPay digital finance product — and notably — is developing new financial services (including for SMEs) aided by its big financial investors, Mastercard and Axa.

Jumia launched an Axa money market fund product in Nigeria in 2019 and some promotional programs on Mastercard’s network, as noted in page 10 of its investor presentation.

 

Total payment volume on JumiaPay increased 57% year-over-year to €45.6 million in 2019 and JumiaPay was used for 29% of Jumia e-commerce orders.

This is significant, as the company has committed to generate more revenues from higher margin digital payment products and offer JumiaPay as a standalone service across Africa.

Since its founding in 2012, Jumia has been forced to adapt to slower digital payments integration in its core market Nigeria and allow cash-on-delivery payments, which are costly and more problematic than digital processing.

Poignonnec also acknowledged the company’s 2020 revenues could be negatively impacted by the coronavirus. “The recent…outbreak in China is likely to affect growth over the coming quarters, and here we are starting to face some challenges to fulfill our cross-border sales,” he said.

Share price

Surprisingly absent from Jumia’s earnings call (and the subsequent Q&A) was discussion of the company’s share price, which spiked then plummeted after its April 2019 NYSE listing.

The online retailer gained investor confidence out of the gate, more than doubling its $14.50 opening share price post IPO.

That lasted until May, when Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud — which sent the company’s share price plummeting — from $49 to $26.

Then on its second-quarter earnings call in August, Jumia offered greater detail on the fraud perpetrated by some employees and agents of its JForce sales program. 

The company declared the matter closed, but Jumia’s stock price plummeted more after the August earnings call (and sales-fraud disclosure), and has lingered in single-digit value for several months.

That’s 50% below the company’s IPO opening in April and 80% below its high.

For the remainder of 2020, bringing back growth in GMV and building on positive metrics, such as attaining gross profit after fulfillment expenses, could revive investor confidence in Jumia and its share price.

It could also put the company in a better position to match competition — such as the Marketplace Africa e-commerce platform of MallforAfrica and DHL — and possible expansion in Africa of China’s Alibaba.

U.S. online shoppers already spent $50B in November, holiday season on track for $143.7B

Facing a shorter holiday shopping season this year, U.S. retailers started rolling out their Black Friday deals earlier than usual. That move has paid off, according to new e-commerce data shared by Adobe Analytics this morning, which found that U.S. consumers have already spent $50.1 billion online between November 1 and November 26, 2019 — which represents a comparable increase of 15.8 percent year-over-year.

This year, Thanksgiving arrived on November 28, a full week later than it did in 2018 when it came on November 22. That left retailers with 6 fewer days to drive post-Thanksgiving Day sales — a situation it hadn’t been in since 2013, when the shorter time frame led to serious delivery struggles. To salvage the lost shopping days (and to not again find themselves in a similar situation as 2013), retailers simply rolled out their deals a week early.

For example, Amazon kicked off a Black Friday deals week on November 22. Walmart introduced early savings through “Buy Now” deals on Walmart.com, in addition to a pre-Black Friday event that started on Nov. 22. Target integrated Shipt’s same-day shopping service into its app and ran a preview sale, weekend deals, and today, Nov. 27, an early access sale. Other retailers followed suit, as well.

But consumers weren’t even waiting for these Black Friday preview deals to start shopping. According to Adobe Analytics, which tracks online transactions for 80 of the top 100 U.S. retailers, all 26 days in November so far have surpassed $1 billion in online sales. Seven days even passed $2 billion in sales, which made 2019 the first year to see multiple $2 billion days this early in the shopping season.

And as of this morning, $240 million has already been spent online, representing 19.3% growth year-over-year, and putting the day on track to hit $2.9 billion.

 

Based on this data, Adobe believes its earlier forecast of $143.7 billion spent during the full holiday shopping season (Nov.-Dec.) remains accurate. That estimate represents a 14.1% rise from a year ago, according to Adobe. In addition, the three biggest shopping days — Thanksgiving, Black Friday, and Cyber Monday — will also see increases, it says.

Thanksgiving Day sales are forecast to jump 19.7% year-over-year to $4.4 billion; Black Friday is expected to grow by 20.5% to reach $7.5 billion; and Cyber Monday sales are expected to top the charts at $9.4 billion, an increase of 19.1% year-over-year — a new record.

The firm also sees a surge in mobile shopping this year, with 34.3% of all e-commerce sales being made via a smartphone, up 24.2% year-over-year. App Annie’s mobile shopping forecast had also predicted a record numbers of mobile shoppers, with a 25% year-over-year increase in time spent mobile shopping during the weeks of Black Friday and Cyber Monday. The firm said shoppers will spend 2.2 billion hours globally across shopping apps this holiday season.

Other notable trends include a rise in “buy online, pickup in-store” shopping — 61% will take advantage of this, leading to 27% more in sales over last year. Plus email promotions this season have led to 16.5% of all online revenue, up 10% year-over-year. Paid search accounted for 23.7% of sales, while social media led to just 2.8%.

In terms of products, shoppers are buying Apple AirPods, Apple Laptops, Samsung and LG TV’s, Frozen 2 toys, L.O.L Surprise Dolls, NERF toys, Pikmi Pops, Fortnite toys, and games like Pokemon Sword/Shield, Jedi Fallen Order, and Madden 20.

“With the shorter shopping season and retailers starting their promotions earlier, Adobe is seeing holiday discounts already well underway even before Thanksgiving Day,” said Jason Woosley, Vice President of Commerce Product & Platform at Adobe. “For televisions alone, shoppers are already seeing discounts twice as deep as expected with average savings yesterday of 17.5%. Those consumers who grab their smartphone to do some quick online shopping after dinner are likely to find offers that are even better than this time last year,” he added.

 

DHL expands Africa eShop online retail app to 34 countries

DHL  has expanded its DHL Africa eShop business to 13 additional markets, upping the presence of the global shipping company’s e-commerce platform to 34 African countries.

DHL  href="https://techcrunch.com/2019/04/11/dhl-launches-africa-eshop-app-for-global-retailers-to-sell-into-africa/">went live with the digital retail app in April, bringing more than 200 U.S. and U.K. sellers — from Neiman Marcus to Carters — online to African consumers.

Africa eShop operates using startup MallforAfrica.com’s white label fulfillment service, Link Commerce. Similar to MallforAfrica’s model, the arrangement allows Africa eShop users to purchase goods directly from the websites of any of the app’s global partners.

This week’s expansion is the second for DHL’s Africa eShop, after adding 9 markets in May.

DHL’s moves run parallel to significant developments this year in the Africa’s online retail scene—namely Jumia’s big capital raise through its IPO.

Here are Africa eShop’s latest additions: Angola, Benin, Burkina Faso, Burundi, Chad, Ethiopia, Guinea, Lesotho, Namibia, Niger, Sudan, Togo, and Zimbabwe.

MallforAfrica CEO Chris Folayan points to the novelty of online sales in many of Africa eShop’s new markets.

“For some of these countries no one has really tapped into e-commerce the way we’re tapping into it, with an ability to buy online and also buy online directly from places like Macy’s or Amazon,” he told TechCrunch on a call.

DHL Africa eShop Stores

Payment methods include local fintech options, such as Nigeria’s Paga and Kenya’s M-Pesa. DHL Africa eShop leverages the shipping giant’s existing delivery structure on the continent, through its DHL Express courier service.

To add some context, someone with a mobile phone and bank account in, say, Niger can now use DHL’s app to shop at Macys.com and have anything from designer sneakers to kitchenware shipped to their doorstep in Central-Africa.

DHL AFRICA ESHOP MAP

DHL Africa eShop is also offering incentives to entice first-time digital consumers.

“We will be launching with a promo, buy any 5 items from over 100 retail partners and get a $20 flat shipping fee. This is DHL’s way of showing they are dominant in shipping and eCommerce in Africa.”

As TechCrunch highlighted this spring, the launch and expansion of DHL’s MallforAfrica supported platform is creating a competitive scenario with e-commerce unicorn Jumia.

Jumia is Africa’s most visible e-tailer and operates consumer retail and online service verticals in 14 African countries. Headquartered in Lagos, the company raised more than $200 million in an NYSE IPO this April.

DHL launched the Africa eShop product the day before Jumia went public and made its first country expansion only weeks after.

There’s a brewing business debate on which platform is best positioned to capture a larger share of a projected $2.1 trillion in consumer spending (10% online) expected in Africa by 2025.

Then there’s the question of who’s largest. DHL Africa eShop touts itself as “Africa’s Largest Online Shopping Platform.” Jumia said, “We believe that our platform is the largest e-commerce marketplace in Africa,” in its SEC F-1 filing.

On the prospect of going head to head with Africa’s best funded e-commerce company, Chris Folayan is somewhat circumspect.

“We’re note focused on competing with Jumia, but in a way it’s starting to happen as a result of our expansion and growth,” he said.

Two main spectators in a MallforAfrica, Jumia match up could be the big global e-commerce names.

Alibaba has talked about Africa expansion, but for the moment has not entered in full.

Amazon offers limited e-commerce sales on the continent, but more notably, has started with AWS services in Africa.

DHL and partner MallforAfrica plan to bring Africa eShop to all 54 African countries in coming years.

 

 

Slowdown or not, China’s luxury goods still seeing high-end growth

Despite well-documented concerns over an economic slowdown in China, the country’s luxury goods market is still seeing opulent growth according to a new study. Behind secular and demographic tailwinds, the luxury sector is set to continue its torrid expansion in the face of volatility as it’s quickly becoming a defensive economic crown jewel.

Using proprietary analysis, company data, primary source interviews, and third-party research, Bain & Company dug into the ongoing expansion of China’s high-end market in a report titled “What’s Powering China’s Market for Luxury Goods?

In recent years, China has become one of the largest markets for luxury good companies globally. And while many have raised concern around a drop-off in luxury demand, findings in the report point to the contrary, with Bain forecasting material growth throughout 2019 and beyond. The analysis provides a compelling breakdown of how the sector has seen and will see continued development, as well as a fascinating examination of what strategies separate winners and losers in the space.

The report is worth a quick read, as it manages to provide several insightful and differentiated data points with relative brevity, but here are the most interesting highlights in our view:

The shift to collaborative robots means the rise of robotics as a service

The 2018 Holiday shopping season was the biggest on record for e-commerce, with nearly $126 billion in online sales. But as e-commerce continues to expand, the demand for warehouse workers is growing faster than the labor supply and creating an increased need for automation.

Given its dominance in e-commerce and the massive scale of its business, there’s no surprise that Amazon was one of the first companies to supplement their human workforce with robotics. Since the acquisition of Kiva in 2012, a growing army of robots performs an increasing variety of tasks at Amazon facilities. However, those tasks remain limited in their ability to displace their human counterparts entirely.

Today, robotics are more affordable to a broader array of companies, thanks to lower cost components, and advancements in technology have paved the way for the rise of the collaborative robot or “cobot”.

inVia Robotics warehouse robots

Cobots are more precise and increasingly flexible with advanced sensor technology, AI, Lidar/Radar, GPS, and connectivity. Machine learning has also made cobots more versatile—not just in their hardware, but in software that facilitates adaptation to a broad array of tasks. And because sensor-rich robots can adapt to a variety of new challenges on the fly, we see more use cases for real-world application.

Don’t expect a severe shift to collaborative robots — we are still in the early innings. The global industrial robot market, dominated by the “Big 4” (Kuka, ABB, Fanuc, and Yaskawa) was valued at more than $15 billion in 2017, while the market for cobots reached only $287 million. However, the digital transformation of warehouses presents a tremendous market opportunity for new companies to create value.

We draw connections to the shift we saw from legacy software to SaaS, where traditional sales and business models switched to recurring revenue streams and cloud-based subscription services. By combining domain-specific go-to-market with robust software management platforms, the next generation of robotics companies has the opportunity to avoid long integrator-led sales cycles and become highly sticky over time, much like the early SaaS providers.

6 River Systems robots lead workers to items they need to get from a warehouse shelf.

Additionally, collaborative robotic technology allows robots to augment human labor, lowering the barriers to entry, while still providing clear payback arguments around efficiency. Like the shift to cloud software, best-in-class platforms are now available to the masses without significant upfront investment in infrastructure.

We believe that co-bots will unlock market verticals traditionally underserved by robotics, such as logistics, food, and security.  Companies that offer full-service solutions to these sectors provide attractive opportunities to build value. For example, 6 River Systems — whose cobots, known as Chucks, use cloud software to coordinate warehouse tasks and work side-by-side with human employees — are changing how we think about the human-robot dynamic.

Cobalt Robotics, in the security vertical, allows human security guards to remotely monitor offices, creating cost savings for the employer, and efficiencies for the security guard. And other companies like RightHand Robotics, inVia Robotics, Starship are poised to replace human labor in some commercial settings.

The rapid innovation in this industry promises to bring efficiency and growth to countless sectors in coming years. Robotics programs at esteemed universities such as MIT, Carnegie Mellon, and Georgia Tech are churning out a pool of world-class entrepreneurs who are not only seizing a timely—and hopefully profitable opportunity—but boldly advancing the industry.

To quote my fellow partner at Menlo Ventures, Matt Murphy, “We are entering a golden era of robotics, where robotics will become mainstream, drive huge efficiencies, and in some cases make the impossible possible.”

New e-commerce restrictions in India just ruined Christmas for Amazon and Walmart

The Indian government is playing the role of festive party pooper for Walmart and Amazon after it announced new regulations that look set to impede the U.S. duo’s efforts to grow their businesses in India.

Online commerce in the country is tipped to surpass $100 billion per year by 2022 up from $35 billion today as more Indians come online, according to a report co-authored by PwC. But 2019 could be a very different year after an update to the country’s policy for foreign direct investment (FDI) appeared to end the practice of discounts, exclusive sales and more.

The three main takeaways from the new policy, which will go live on February 1, are a ban on exclusive sales, the outlawing of retailers selling products on platforms they count as investors, and restrictions on discounts and cashback.

Those first two clauses are pretty clear and will have a significant impact on Amazon — which has pumped some $5 billion into India — and Walmart, which forked out $16 billion to buy India-based Flipkart.

Both online retailers have been able to make a splash by tying up with brands for exclusive online sales, particularly in the smartphone space where, for example, Amazon has worked with Xiaomi and Flipkart has collaborated with Oppo. The new guideline would appear to end that practice, while adding further restrictions to complicate relationships with vendors. From February, brands will be forbidden from selling more than 25 percent of their sales via any single e-commerce marketplace.

Walmart bought Flipkart for $16 billion, but already both founders of the Indian company have left [Photo by AFP/Getty Images]

Beyond restricting companies like Oppo — Xiaomi prioritizes its own Mi.com site for sales — that 25 percent ruling is a headache for Amazon, which operates a number of joint ventures with Indian retailers. Those JVs were designed to circumvent a 2016 ruling that prevented foreign e-commerce businesses from owning inventory, but now they seem outlawed.

Cloudtail India (a 49:51 JV between Amazon and Catamaran Ventures) is Amazon’s biggest seller while another major one is Appario Retail, a collaboration with Patni Group. Together, both sell more than 25 percent of product on Amazon, use exclusive deals and are part-owned by Amazon. That’s three strikes.

Those rules will have Amazon and Walmart-Flipkart working to find alternatives, but there’s more with restrictions on discounts and cashback offers, which could massively cramp the appeal of online commerce, which has been to undercut brick and mortar retailers with heavy subsidies.

Here’s the relevant part of the note:

E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field…

Cash back provided by group companies of marketplace entity to buyers shall be fair and non-discriminatory.

Exactly what constitutes a “level playing field” or “fair” may be open to interpretation, but clearly this update gives offline retailers a route to protest pricing on online retail sites.

The first thought is that these new updates are focused on the core business model tenants that make e-commerce what it is today.

“It will kill competition and there will be nothing for online retailers to differentiate on,” Amarjeet Singh, a partner at KPMG, href="https://qz.com/india/1508340/indias-new-e-commerce-fdi-rules-may-hurt-amazon-flipkart/"> told Quartz in a comment.

The new regulation is widely seen as a response to concerns from smaller sellers, who feel marginalized and powerless compared to larger organizations. Now, with capital-intensive policies such as discounts, exclusive sales relationships and strategic investment off the table, smaller players will gain a foothold and be able to do more from e-commerce, that’s according to Kunal Bahl, CEO of Snapdeal — a niche e-commerce firm that once competed head-to-head with Flipkart and Amazon.

It’s shaping up to be a very different year for e-commerce in India in 2019.

Nigerian data analytics company Terragon acquires Asian mobile ad firm Bizense

Nigerian consumer data analytics firm Terragon Group has acquired Asian mobile marketing company Bizense in a cash and stock deal.

Based in Singapore, with operations in India and Indonesia, Bizense specializes in “mobile ad platform[s] for Telco’s, large publishers, and [e-commerce] ad networks” under its proprietary Adatrix platform—according to its website and a release.

The price of the acquisition was not disclosed.

The company lists audience analytics, revenue optimization, and white label SSP services among its client offerings.

Headquartered in Lagos, Terragon’s software services give its clients — primarily telecommunications and financial services companies — data on Africa’s growing consumer markets.

Products allow users to drill down on multiple combinations of behavioral and demographic information and reach consumers through video and SMS  campaigns while connecting to online sales and payments systems.

Terragon clients include local firms, such as Honeywell, and global names including Unilever, DHL, and international agribusiness firm Olam.

The company’s founder and CEO Elo Umeh sees cross-cutting purposes for Terragon services in other markets.

“Most of the problems we seek to solve for our clients in Africa also exist in places like South East Asia and Latin America,” Umeh told TechCrunch.

The Bizense acquisition doesn’t lessen Terragon’s commitment to its home markets, according to Umeh.

“We are…super focused on Africa right now, building out propriety platforms powered by data and artificial intelligence to help Telco’s, SMEs, FMCGsand financial institutions …increase their customer base and drive more transaction volumes,” he said.

Terragon’s CEO would not divulge the acquisition value, saying only that it consisted of  “a combination of cash and stocks, with the actual amount not disclosed.”

In an interview with TechCrunch earlier this year, Umeh confirmed the company was looking into global expansion.

Tarragon already has a team of 100 employees across Nigeria, KenyaGhana and South Africa.

Umeh indicated the company is contemplating further expansion in Asia and the Latin America, where Terragon already has consumer data research and development teams.

With the Bizense acquisition Terragon plans to “build out platforms, tools and machine learning models to help businesses…acquire new customers and get existing customers to do more.”

Bizense founder and CEO Amit Khemchandani will be involved in this process. “We are excited about the next phase of this journey as we innovate for Africa and other emerging markets,” he said.

With the exception of South African media and investment giant Naspers, acquisitions of any kind—intra-continental or international—are a rarity for Sub-Saharan African startups and tech companies.

Terragon’s acquisition in Singapore, and other moves made by several other Nigerian startups this year, could change that. African financial technology companies like Mines and Paga announced their intent to expand in and outside Africa. They would join e-commerce site MallforAfrica, which went global in July in a partnership with DHL.