During the height of the COVID-19 pandemic, last mile distribution became a serious challenge for all retailers. With distribution hubs and retail centres closed, supply chains severely impacted and customers subject to national and local lockdowns, getting products to market became close to impossible.
This forced businesses to find new ways of operating to reach their customers. In Uganda, at the start of COVID-19 restrictions in 2020, 85 per cent of retail and wholesale customers had to close their doors for nearly three months during COVID lockdowns. The country did not open again fully until January 2022.
Established in 1993, African Queen (AQ) is the largest fast-moving consumer goods distribution company in Uganda, with seven depots and serving customers across the country.
Founder and Board member, Sophy Nantongo, started AQ when she was a teenager, taking the bus to Kenya to source and buy cosmetic products and then selling them in Uganda.
After steadily growing her business, buying industrial land for warehousing, and hiring a team, the global pandemic presented an unprecedented challenge for Sophy.
“COVID affected everybody, and for us it was really bad because we earn by selling and at that time, they were not allowing cars to move, vans to move. We couldn’t reach our customers and we had over 250 employees.”
During the first three months of the pandemic African Queen made losses, but Sophy was committed to finding a way to continue paying her team.
“We could not just say to them ‘you’re fired, go’,” says Sophy. “We needed to find ways to sustain the company.”
At the same time, customers were adapting to the conditions by opting to buy from neighbourhood kiosks and convenience stores, rather than larger supermarkets.
The company needed to find a way to respond.
With support from CDC’s technical assistance facility, CDC Plus, African Queen implemented three changes.
First, they changed their sales methods from relying on trucks and vans transporting products to wholesalers, to a direct sales teams serving retailers directly on tuk-tuks.
Second, to support this new business model, the company hired commission-based sales agents, each responsible for their own tuk-tuk. Every sales representative was given formal online training that included brand knowledge and customer services training, allowing them to operate as almost autonomous businesses within AQ. It also provided a valuable opportunity for upselling new products in a way that hadn’t been possible under the wholesaler model.
“The question for Ivan, our head of products, and his team, was ‘how do you drive the sales quicker from smaller retailers, but still deliver the quality service that we need?’ CDC brought onboard the team and the initial thinking on how we best deploy them,” says Kim Kasule, African Queen’s Head of Strategy, IT & Business Development.
Working with CDC Plus and consultants Hystra and Bopinc, the company looked at how they could rapidly scale up the online training systems to accommodate the growth in the sales force.
“So now they’re thinking okay, how do we create a system which allows us to train 500 people across the whole country over the next year or so, so that they can generate their own income? That’s the next thing that we’re looking at,” adds Kim.
Lastly, AQ provided close hand holding support, including helping to map efficient routes for all tuk-tuks. After initially starting with 15 drivers in 2020, the company now employs 25 drivers and five supervisors who reach a total of 10,000 local retailers, serving around 500,000 households.
Hiring drivers, Sophy says, was easy. African Queen has its own database of people it can call upon, and combined with the number of businesses closing in the pandemic, there were sales agents looking for work.
“Those companies couldn’t sustain their employees, so we got the best salespeople,” she adds. Sales by tuk-tuk agents now account for over 5 per cent of AQ’s total business and Sophy wants to grow it further. The plan is to buy more tuk-tuks to extend beyond major cities such as Kampala into rural areas of Uganda.
“The tuk-tuks brought life into the company,” says Sophy.
Third, the team wanted to make customers’ access to goods as simple as possible despite the pandemic restrictions. From 2020 to the end of 2021, internet use in Uganda increased 14 per cent presenting new opportunities for African Queen.
The company built AQ Direct, an app that digitises the ordering process across its supply chains, allowing retailers to order online through the new platform.
The app was developed to include data dashboards which deliver critical business intelligence to AQ’s management team and provide sales representatives with data on which new products may be of interest to retailers.
So far the platform has been a success and AQ’s ambition is to have 10 per cent sales via digital sales channels by the end of 2022.
Looking at future growth and to remain competitive in a crowded and growing space, African Queen has mapped high demand products across 17 categories and is working with suppliers to expand its product offering.
“One, we have the physical sales models with the tuk-tuks,” says Kim. “Two, we have direct ordering through the app and three, we are looking at commissioning agents who take orders through the app from retailers and receive a commission based on the size of the order.
“So we have a three pronged strategy to help customers as much as possible. We’re focusing on small supermarkets, kiosks and mom and pop shops. The question now is how do we take the business to the next level?”