What will the world of business look like post COVID-19? The pandemic has catalysed a period of business unusual, possibly entrenching some behaviours for the long term. Many of these behaviours can be seen in local tech start-up Khula, which has seen sustained growth during the lockdown. They demonstrate what tomorrow’s business landscape may look like. A world where more companies become connectors.
Ayanda Vana, COO of Khula, says the B2B ecommerce marketplace was founded with the intention of connecting farmers directly with buyers. “We provide a centralised platform for buyers to support emerging farmers. During COVID-19, we’ve had more traction as people increasingly turn to ecommerce as an alternative to physical shops. Additionally, we’ve found farmers are seeking new ways to access the market. There’s more openness on all sides.”
Mike Anderson, CEO at the National Small Business Chamber (NSBC), says Khula epitomises a drive many small businesses share to build on core competencies during this time. “We’ll see more businesses focusing on being increasingly digital, data driven and in the cloud. Ecommerce is an important avenue to explore. It will inevitably play a much stronger role that will drive the bottom line for retailers.”
Vana says Khula was founded three years ago and already has over 3 000 farmers on its system. She adds that one of the biggest struggles for emerging farmers is access to the market. Khula was created to help remove these barriers. “When selling at a traditional fresh-produce market, farmers typically lose about 16% of what they’re making to an agent. Then, a further 30% goes to logistics costs. To put it in perspective, a consumer could buy lettuce off the shelf for R36. But just R3 of that goes to the farmer. We wanted to solve the very real challenge of cutting out the middleman to put more money in farmers’ pockets to encourage farmer-buyer collaboration at fair prices.”
There are a few lessons to be learnt from this business model for other organisations hoping to revive their relevancy in a post-pandemic world.
- Solve a shared challenge: Vana says this is likely to be at the core of more businesses going forward. During COVID-19, thriving organisations are often those that spotted a shared challenge and implemented an intelligent solution.
- Look for ways to iteratively micro-innovate: Khula identified that logistics issues are another major concern for emerging farmers. Buying ‘input’ resources like fertiliser takes up valuable time. So Khula now offers input materials on its platform as well. The start-up kept asking ‘how can we improve the farming experience, to help more farmers grow and move out of the emerging space?’ By constantly seeking small step-changes, organisations can foster faster growth.
- Be a connector: It’s likely many more businesses will take on this role, now and in the future. With the growth of ecommerce and online platforms, there are myriad opportunities to connect service providers and suppliers to consumers, buyers or other businesses. This has been a long-standing tech company trend (Alibaba B2B marketplace, for example) and is driven by consumer expectations. Vana says, “Consumers now expect a centralised hub to act and transact from – think of Google. There’s a trend around tech being used to centralise connections. This will definitely grow.”
- Adopt tech the smart way: Vana says it is very expensive to build a tech solution from scratch. And it’s often unnecessary. Rather see what’s available and how you can integrate it to fit your needs.
- Consider ecommerce, but have the logistics to back up it up: According to World Wide Worx, South Africa’s online retail industry accounts for only 4% of total retail right now. That’s already beginning to change. Buying patterns are shifting as South Africans trust ecommerce more. However, any company considering selling online needs to have a robust logistics plan in place. Customers don’t want to wait for their items. Delivery needs to be as quick as possible. Vana adds, “Hopefully, more businesses will also consider how to coordinate their logistics to better service remote rural areas as well.”
- Focus on shared value: Vana says, “The success of your business is based on the success of the community. If people don’t have jobs and steady sources of income, they can’t support you. Everything we do speaks to the heart of a problem or need that the community has. We want to effect actual social change through our offering.” This will be crucial in the post COVID-19 landscape. More than ever, businesses will be expected to be bastions of social change.
Anderson concludes, “Our advice for businesses looking to adopt a tech-led approach is to investigate cost-effective, proven solutions that can be easily adopted – specifically, flexible pay-as-you-go solutions. Now’s the time to embrace change as inevitable and to focus on implementing a meaningful approach to creating shared value. Right now, sustainability-minded businesses that benefit communities will be the success stories of the future.”
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