Tushop, a Kenyan social-commerce website that allows groups of people to buy fast-moving consumer goods (FMCGs), is ready to expand throughout Nairobi following a $3 million pre-seed financing led by 4DX Ventures.
Tushop, which was founded last year by Cathy Chepkemboi, who is also the CEO, relies on community leaders to gather orders from their neighbors and assist with last-mile delivery.
After her resignation from Unilever [Kenya and the United Kingdom], Chepkemboi founded Tushop and Moko, a furniture company in Kenya.
She claims she first noticed the fragmentation in Kenya’s retail industry while working for Unilever – Kenya, and that logistics was one of the difficulties that contributed to the country’s high cost of vital commodities.
In Kenya, distributors who source items from producers set the price, which is frequently exaggerated by distributors and retailers.
Each community leader has a virtual shop where residents can place orders, which Tushop then aggregates for bulk purchases to manufacturers or other producers such as farmers.
Even with the brokers collecting sales fees, Chepkemboi claims that this structure saves shoppers up to 60%.
Before extending to the rest of Kenya, the company intends to expand its business in Nairobi, Kenya’s capital.
JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa, and DFS Lab were among the investors in the startup’s most recent round.
Wasoko (previously Sokowatch) also joined as a strategic institutional investor for the first time. Olugbenga Agboola (GB); Flutterwave CEO, Raja Kaul; Sundial Group president, Eli Pollak; Apollo Agriculture CEO, and Ida Mannoh; Chipper Cash director of growth, were among the angel investors that participated in the round.
Tushop is the latest addition to Kenya’s increasing roster of entrepreneurs revolutionizing the retail sector. Marketforce, for example, has developed the RejaReja app, which allows informal traders to order and pay for products digitally.
Wasoko, which operates in the same market as RejaReja, distributes FMCG from suppliers to retailers. RejaReja differs from Wasoko in that it is an asset-light distribution platform, meaning it does not own capital assets such as warehouses or delivery trucks; they are provided by its partners, which include manufacturers and distributors.
Tushop is one of Kenya’s first social commerce websites, sourcing goods directly from producers, including fresh fruit, and delivering them to customers.
Techbuild’s Take
The barrier between social connection and online purchase is dissolving because of social commerce, a relatively new subset of e-commerce.
It gives small enterprises and micro-entrepreneurs an easy means to formalize portions of their businesses and expedite their procurement processes, in addition to providing a seamless online experience and increased negotiating power for underserved clients.
Several Kenyan micros, little, and medium enterprises (MSMEs) are unable to access markets because they cannot afford to set up, run, and promote an online presence.
Furthermore, owing to platforms like Tushop, the cost and hassle of transferring items from one location to another can be avoided.
SMEs in Kenya can take advantage of the current economic climate to migrate to and adopt social commerce for scalability, and investors are ensuring that they receive all of the support they require to expand beyond their operational zone.
Social businesses have the opportunity to enhance economic conditions for a huge portion of the population in advanced markets, especially in the informal sector, where the majority of people work. As a result, it is rapidly becoming a key part of the digital economy.
Small merchants and entrepreneurs can use social commerce to establish an online presence at little cost and hassle, and it can be a simple approach to start a business and gain an early customer base for those who are just getting started.
Through features like group buying, low-income, rural, and price-sensitive clients can take advantage of the low prices and increased bargaining power.
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