By September 27, 2018

This Egyptian Startup Is Making Car Rides Smoother One Spare Part At A Time

By September 27, 2018

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Imagine being held up on a cold, rainy night because your car blew up yet another gasket to make it the third time in as many weeks. Or think about having to pull over now and then on a routine trip to your country home because of a faulty fuel pump and worse still having to spend twelve hours on the road for a trip that should ordinarily take half that long. Now, the only way these scenarios can get any more frustrating than they already are is if it happens that you have already spent good time and money trying to fix those.

So what if you could actually get a reliable remedy for your car’s nagging shaft problem, or that lingering issue with its steering rod and ball joints, or better yet, get an upgrade on its entire gearbox and engine system? Well, don’t get excited yet because it gets even better. What if you could place orders for all those auto car parts online and have them delivered to you with assurances on quality? Better yet, what if car repairs and full automobile maintenance was available at the click of a button and not a fuss more? Think about that for a moment. Sounds good, doesn’t it?

Well, for starters, that is what Ahmed Omar and the rest of the 17-man team at Odiggo are looking to achieve – and it appears their efforts are starting to yield significant impact. Odiggo is an online platform for car parts, assisting customers in the areas of fixing and servicing their vehicles. Through Odiggo’s mobile app and web platforms, customers are able to browse through car categories and models and find quality spare parts that are designed for their vehicle which can help get it back on the road.

So, Odiggo is essentially an eCommerce platform for auto spare parts, amongst other things. The auto parts available on the platform can either be installed by the customers themselves or via its soon-to-be-launched car service center. Odiggo boasts a catalog which encompasses different kinds of genuine auto spare parts for a wide range of car types and models. The startup rakes in revenue in the form of commissions charged on products purchased via the platform.

The startup is also believed to be making significant strides in the development and launch of a newer product which is necessarily hardware that can sort of inspect cars, carry out preliminary diagnostics, as well as communicate faulty areas with the platform’s mobile app. The technical team at Odiggo who are the brains behind this novel technology are said to have test-ran this AI system on a number of vehicles, and after multiple iterations, the results are thought to be encouraging.

In a conversation with WeeTracker, Ahmed Omar who doubles as the startup’s Founder and CEO revealed that the idea behind Odiggo was triggered by the need to address problems many individuals encounter in the process of accessing quality spare parts for their vehicles. The CEO cited difficulties associated with finding the trusted and competent repair centers for motor vehicles, while also hinting at the uncertainties surrounding car replacement parts purchase, as some of the motivation for executing the idea.

“Many people resort to going to car dealership agencies for auto parts and this comes at significant costs owing to the fact that the spare parts on offer from these agencies are often available at very exorbitant prices because these dealerships are more suited to selling spare parts in bulk to retailers who themselves sell to the end-users at prices that are not exactly favorable.”

With a view to solving this problem, Ahmed sort to explore the market opportunity that was buried amidst the spare parts sales problem – and it would appear that the Egyptian entrepreneur may have stumbled upon a gold mine.

Egypt can be considered an upwardly-mobile country with a well-structured, though often traffic-laden, road network especially in Cairo, its capital city. And with ride-hailing platforms like Uber and Careem seeing a lot of patronages and gaining considerable ground in the North African nation, Odiggo can be thought to be primed for even better days.

According to Ahmed, a premium is placed on technology-driven and affordable car maintenance solutions due to the presence of these ride-hailing platforms who boast thousands of cars on Egyptian roads and complete hundreds of trips on a daily, as well as individuals and private car owners who are on the lookout for more efficient and cost-effective solutions in the area of maintaining and fixing their vehicles.

Before launching his very own startup, Ahmed told WeeTracker about his academic background in economics, as well as his stint abroad as a seller on such platforms Jumia, Amazon, eBay, and a number of others; a feat that can be considered to have piqued his interest and sharpened his skills in the eCommerce sector.

He also has fond memories of his time at Used Cars where he got to know about just how much money and time people spent getting car maintenance. According to him, it may have, in fact, been around this time that the eCommerce idea for auto spare parts hit him as he had found himself shipping auto parts to a friend of his on multiple occasions within the space of a few weeks.

“He used to go and buy the parts himself from car dealerships, only to have them returned because they did not match the model used by his car. Apparently, the sellers too were not fully grounded on the products they sold, so he got around to having me ship the parts to him which I didn’t really have trouble with. And that was when the idea hit me. At Oddigo, using such details as auto parts serial numbers and a number of other technologies that are already available, we are able to help customers with the correct, genuine quality auto parts for their cars, at prices that are reasonable and with delivery in good time.”

The Odiggo platform is designed around the usability and convenience of customers. It makes it quite easy for users to find the correct spare parts for their cars as it narrows down search options to car make, model, and year. Users can also browse through the categories of the cars and the different types of parts, then navigate through the sub-categories to find the replacement part itself.

According to the CEO, once the needed parts are added to cart, and the transaction is complete, Odiggo delivers the spare parts to users within Cairo in 24 hours. For users outside Cairo, delivery time is placed at two days while for international clients, it is between four to six days. The startup currently boasts over 300 vendors in Egypt, two in Bahrain, one in Turkey, and plans are believed to be afoot to launch another in Dubai this month.

The startup is also looking to do one better by going beyond the regular shopping and shipping aspects that characterize eCommerce models. The CEO told WeeTracker that it is set to launch a car maintenance service on its web and app platforms for both Android and iOS devices.

This is expected to furnish users with the option of easily getting troubleshooting and maintenance services for their cars, with a number of service centers set to be launched in strategic locations across Egypt and other countries in the coming months. Customized car maintenance services will also be incorporated into the offering to cater for the car maintenance and repair needs of individuals who are unable to get their cars to the service station.

Essentially, Odiggo has set itself up to become a one-stop shop for all car maintenance needs by affording its users the dual option of conveniently sourcing for high quality auto parts and having them shipped or leveraging its car maintenance services which will be made available in both nearby service centers, as well as choice locations upon customer request.

And it would appear Ahmed and the rest of the team at Odiggo are getting some things mostly right as the platform boasts up to 12,000 users and over 8,000 requests processed since becoming fully operational only nine months prior. “We have more than 120 business customers, and companies that are dealing with us,” the CEO told WeeTracker. And that may be just for starters.

The startup appears to have gained significant traction as Ahmed revealed that Valeo; a renowned manufacturer of car parts is one of the prominent brands who directly sell on Odiggo with over 4,000 items featured on the platform. “We currently have more than 22,000 products for sale on the platform for about 31 different car brands and models. Over than the last nine months, there have been more than 200,000 visitors on our website, as well as an average of 45,000 monthly visitors on the platform over the same period,” the CEO offered.

 

These numbers may have a lot to do with the underlying statistics relevant to the industry. According to Ahmed, findings from an MVP conducted by the Odiggo team resulted in the collection of data which gave off astonishing revelations and hinted ample opportunity in the industry.

“There are about 500,000 front brake pads replacements in Egypt every month. If each unit is sold at, say, an average of USD 10.00, that is about USD 5 Mn worth of brake pad sales monthly. And that is for just one spare part being replaced every month without taking into account the cost of fixing cars in the aftermath of crashes which takes up to USD 300 Mn annually in the MENA region alone,’ Ahmed revealed to WeeTracker.

He went further; “In Egypt alone, there is around USD 1.3 Bn worth of spare parts imports annually, and it is a similar story in other parts of Africa and the Middle East where imports of both new and used car parts reach up to USD 10 Bn every year. One of our biggest vendors in Egypt realizes an average of EGP 69 Mn in spare parts sales annually, and that is only one vendor with about 1,000 items when there are about 7,000 spare parts vendors in Egypt alone.” This, the CEO believes, is an indication of the huge market demand available for auto spare parts – one that Odiggo is keen to cash in on.

The startup is said to have been built from personal funds and it was also self-funded for the first three months of its existence, and that was after going to vendors for some of its initial products. This was followed by a token investment from what is believed to be a combination of friends, partners and former colleagues which roughly amounted to USD 7.5 K in exchange for some amount of equity in the company.

Ahmed also gave indications that talks are currently in an advanced stage with some of the biggest angel investors and VC firms in Egypt to close an investment round that will see it raise a further USD 250 K in funding around the first quarter of next year. This envisaged injection of capital is expected to fuel the startup’s plans to explore a number of African and MENA markets, as well as help amass increased revenue. According to him, Odiggo is looking to branch into Saudi Arabia, Dubai, Nigeria, Jordan, and Lebanon in the near future.

But the going was not always this good for the business. Even though getting started often poses one of the biggest challenges, staying in business is, in many ways, the factor which ultimately defines the success or failure of any startup. And staying in business is not exactly achievable if you are not selling. Having been bootstrapped all the way to its launch, the startup was initially hampered by difficulties in getting products from manufacturers on credit as it was a new business.

“At first, nobody knew our platform so it was hard to get them to give us the products on credit. We had to pay cash for all the products during those first few transactions in a bid to establish trust. We did not buy anything unless we first sold them on the platform. This we did by collecting an inventory of all the auto parts available from the manufacturers and vendors, which was a challenge in its own right and then putting them up on our platform. Upon receiving orders, we purchased the parts with our own money since we operate on a Cash-On-Delivery model and shipped them to the customers through courier services like DHL and Aramex at a reasonable profit. But then, we began to gain the trust of these spare parts manufacturers and vendors and the credits and better deals started coming in.”

Besides the financial constraints, there were also other challenges that threatened to derail the business during those early stages. Customers did not exactly jump at the idea at first because they were doubtful of the ability of a business designed on such a model to actually deliver the goods. So the startup had its work cut out for it in trying to address the skepticism and mistrust by delivering as promised, even at no profit at times.

There was also a logistics challenge initially as the startup was caught up in a dilemma where it had to choose between big international companies whose services were really expensive but reliable and the local ones who were not as expensive but whose deliveries took several days. Throw that in with the market challenge posed by the vendors whose terms were not exactly favorable in the beginning, and customers who didn’t buy the idea initially, and you get the idea that it was not always a rosy affair.

But in any case, it appears the startup has weathered the initial storm and such has been the traction gained by the business during its relatively short existence that vendors now have no qualms giving them thousands of products on credit as there is now confidence in the ability of the startup to turnover and make payments as agreed. And the numbers already mentioned in this piece tell the rest of the story.

In spite of the competition that exists in the form of platforms with similar models in Egypt, Ahmed remains confident in the ability of Odiggo to hold its own amongst its peers as he cited such details as the value it affords users, the after-sales service, the easy-to-navigate catalog which boasts a wide range of auto spare parts for different car types and models, the affordable prices, the functionality of the website which enhances user experience, the mobile application, the AI device for running vehicle diagnostics and communicating findings with the app, the car maintenance option, as well as the automation that drives the service, as being factors that give Odiggo the competitive edge. It is also interesting to note that a number of these competing brands have dashboards on the Odiggo platform through which they resell products within and outside Egypt by leveraging its services.

 

Having been recognized in StartupScene’s 25 Under 25; an elite class of some of fastest growing and most promising young entrepreneurs in the MENA region, and having seen the startup through EG Bank’s MINT Incubator, Ahmed is hopeful that Odiggo will continue on its current upward trajectory and grow to become one of the biggest eCommerce platforms for not only car but also truck and motorcycle spare parts, as well as vehicle maintenance.

Investment deals are expected to be closed in the coming months with prominent investors in the MENA region featuring in talks, and this should go some way towards helping the startup explore other promising markets and further develop its technological offerings.

Baring his thoughts to other budding and aspiring entrepreneurs around the world as a parting gift, the Odiggo Chief had this to say; “Start executing those ideas and vision that you think about every day but do not act upon out of the fear of failure. Those ideas may actually prove successful, and if you never try, you might never know.”

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