Do you believe technology has the power to transform not only the economy, but also society as a whole?
Soumaya Hamzaoui, the COO at RedCloud, certainly does. In this newsletter, we had a chat with Soumaya on the current state of the global supply chain and how it impacts emerging markets. She also shares her insights on how technology can be used to create a more equitable future for billions of retailers and consumers across the world’s fastest growing markets.
Can you share a bit about the current strain in global supply chains?
Global commerce is under real stress, especially in emerging markets. In many parts of Africa and Latin America, local merchants are facing a shortage of suppliers and limited stock, they need to find other solutions to keep servicing their customers. The pain is acute, in the worst cases consumers cannot access essential goods such as food, washing powder or nappies.
While many have focused on the current supply disruption factors (such as the pandemic or the conflict in Ukraine), distribution is a longer-term and more entrenched problem. Centralized distribution, concentrated in the hands of a few powerful players, has created a chronically inefficient market, leading to supply chain shortages and spiraling costs.
How can technology solve this problem?
Technology can help break the artificial barriers that exist across the market and help both FMCG brands and distributors match supply with demand. If we can bring brands, retailers, and distributors together on a single platform to trade, we can generate key market insights in real-time for brands and distributors, something that is crucial to unlocking growth in these markets.
With technology in the hands everyone, from the smallest retailer to the largest brands, we can leverage the power of network effects to ensure that the market becomes more efficient, and we can drive exponential growth for millions of small businesses across Africa and Latin America.
What solutions currently exist in the market that’s solving the distribution problem?
While there are several solutions that claim to help the consumer goods and retail industry, most of them are not doing enough to solve the distribution problem. Most of the available technology is used by centralized entities with the aim of hijacking control of the entire supply chain rather than creating an open playing field.
E-commerce platforms, which are by far the most common technology available are unduly restrictive and predatory. These platforms control the prices of consumer goods and hijack control of the distribution chain by often attempting to build their own fulfilment networks. This renders long-existing distribution chains obsolete and makes it harder for brands to move their products along the heavily fragmented supply chain.
The solution to this problem is Open Commerce, a new way of trading that creates an open playing field for all parties.
Do you have examples of how this technology works, and can help distributors and retailers in practice?
RedCloud has built the world’s first Open Commerce platform which brings FMCG brands, retailers and distributors onto a single platform where they can instantly connect and trade with each other.
We are able to create efficiencies in the market with our proprietary Open Commerce solution. Take Johannesburg for example, retailers there recently experienced acute shortages of popular beverages and were losing revenue. However, we had onboarded local suppliers in Cape Town who had previously not been able to access the Johannesburg market. With our Open Commerce platform both parties could come together and trade without any restrictions – a win-win for consumers, retailers and suppliers.
We are also facilitating cross-country trade. We already had local brands in Nigeria offering high-quality products. Thanks to the market insights delivered by our technology, we were able to identify South Africa as a good territory for them to target. Many of these brands are now talking to local South African distributors and looking at expansion.
We recently spoke with some of our retailers and distributors in Nigeria, who told us how, through using RedCloud’s Open Commerce platform, they had been able to streamline their sales and distribution processes, making it easier to buy and sell products. One of our distributors has since grown their sales by over 500% and increased their margins by 30%.
So, what is RedCloud’s ultimate mission, what do you seek to achieve?
RedCloud is fighting against centralization!
Whether it’s e-commerce giants like Amazon, or the Cash and Carry kings of South Africa, we want to break the stranglehold of the centralised distribution. We want to stop a tiny handful of players from controlling the pricing, the terms of engagement and overall access to the market. Centralisation crowds out suppliers and limits choice to consumers. That’s what we’re working to disrupt.
We also believe that technology should lift economies and societies, creating rather than destroying opportunities, this is core to the RedCloud mission. We want to empower distributors and retailers by giving them the tools they need to grow their businesses through an open trading platform for all.