The principles of "Demand and Supply" that underpin a free market are also the driving forces behind any supply chain network. The business-to-business (B2B) supply chain is a vast sector with several essential components, including logistics, warehousing, last-mile deliveries, and inventory management.
There are several African B2B supply chain startups that are addressing various issues in each vertical. These startups are guided by the fundamental principles of demand and supply. With a significant portion of the retail sector being disorganized, there is immense potential for sustainable growth for B2B e-commerce startups.
B2B e-commerce startups in Africa serve as a connection between producers and retailers, enabling informal street vendors and small-business proprietors to replenish their supplies through mobile apps, WhatsApp, and text messages. These emerging companies offer discounted products and provide logistical support to merchants through their own delivery truck fleets or by engaging third-party businesses for order fulfilment.
Although African demand and supply are influenced by global markets, the consumption of daily essentials subsists even during difficult times like covid or war. This is evident from the functioning of the global supply chain during such challenging periods.
It's been a tough year for the startup scene, especially in Africa, as venture capital injection has slowed down. African startup funding has dropped by over 50 percent when compared to the same period last year, and it appears that the B2B e-commerce sector is among the worst hit.
What could be the real reason? Is it because it is a non-performing sector? Or because the sector demands higher tranches of investments, more than USD 10-20 M, to make a dent?