KOKO is all about building technology that improves life in Africa’s cities. Urban cooking fuel is the first sector we are tackling, and our Network of KOKO Agents are our critical local partners who retail our clean fuel solution. But what exactly is a KOKO Agent, and how do we support them?
KOKO Agents are established, trusted and successful local shopkeepers. Their bricks-and-mortar convenience stores are at the absolute centre of urban African retail – providing mass-market households with the consumer goods they need, within a short walk of their home, and often with trust-based credit arrangements.
Whilst large shopping malls are springing up across Africa’s major cities, they mainly serve wealthier customers who own cars. For the mass-market however, they are not close enough to home, and often end up being weekend tourism destinations. When measuring actual sales volumes, it is crystal clear that the neighbourhood-based mini-markets and convenience stores win the lion’s share of FMCG retail sales.
These Tier 3 Modern Trade retailers are generally in the top quartile of entrepreneurs in their neighbourhoods, and just as they are the lifeblood of urban commerce, so they are the backbone of our Agent network. They are typically supplied direct by large distributors on behalf of multinational brands, make strong revenues and profits, sell a wide range of branded consumables and employ security guards.
They tend to be totally new to retailing fuels of any kind, though some might sell LPG cylinders in locked containers outside their store. Therefore, joining the KOKO community offers a unique opportunity to add a profitable new line of business (clean ethanol cooking fuel); differentiation from intense competition; and significant cross-selling opportunities built upon the increased footfall that fuel top-ups bring.
The ‘special sauce’ for our Agents is that they will also become exclusive retailers of a wider range of compelling new goods and services as we roll out various features of our commerce platform.
Agents receive all relevant training, and require no additional staff. Their team simply focuses on marketing KOKO to customers and acting as the customer collection point for all product orders made via the KOKOpoint (consumers receive an SMS when their order is ready for collection).
As the Retailer of products delivered through KOKO, our Agents earn attractive margins on every sale made via their KOKOpoint, even though KOKO’s systems handle the majority of back-end work, such as digital marketing, order management, procurement, logistics, and customer support. Our cloud systems also automate Agents’ payments to suppliers, lenders, and tax authorities, removing a major administrative headache and ensuring no supply interruptions.
In reality, the KOKOpoint becomes a low-hassle, low-maintenance annuity for Agents.
And as we add more physical products and digital services to our commerce platform, our Agents will continue to grow their businesses simply by leveraging their proximity to and relationships with local consumers, rather than having to expand their premises or hold more stock.
We’re proud to partner with a growing network of Agents in Nairobi, and look forward to growing our commerce platform with their input and partnership.