Dear reader,
Ethiopia is Africa's second most populous country, yet its startup ecosystem remains less visible than other, smaller African peers.
Maybe this has to do with the country's history. As Addis Alemayehou, a prominent Ethiopian investor, told The Realistic Optimist:
"Ethiopia is the only African country that was never colonized. We hold our sovereignty near-and-dear. In economic matters, this translates to a reflective and cautious approach towards ensuring that foreign involvement in the economy benefits Ethiopians, first and foremost."
Caution isn't dogmatism, and the Ethiopian economy has incrementally opened up in recent years. This has enabled outsiders to peek into what the Ethiopian startup scene is brewing.
Today, The Realistic Optimist publishes an exclusive interview with the co-founder of JEMLA, an Ethiopian B2B e-commerce startup currently serving 17,000 local retailers. This is the second Ethiopian startup we write about, following our piece on fintech startup Santimpay in 2024.
Enjoy.
Biography
Estephanos Zewdie is the co-founder and CEO of JEMLA, an Ethiopian B2B e-commerce startup.
Founded in 2021, JEMLA makes it easier for small Ethiopian retailers to order and receive the goods they sell. Recently, JEMLA has started providing these retailers with working capital loans. JEMLA works with 17,000 retailers and has a team of 50. The company has raised $250,000 so far, including debt.
Prior to JEMLA, Estephanos was a general manager at M.A.D Technologies PLC, a website and mobile application development company. He holds a Bachelor's degree from Addis Ababa university.
What problem is JEMLA solving?
Small, informal retailers in Ethiopia lose time and money when purchasing the goods they sell. They usually have to close their stores, physically go to the wholesale market, bargain with middlemen, pay for the loading/unloading of their order, and pay for the transportation back to their place of business.
This process strips them of valuable business hours and imposes unnecessary fees. JEMLA’s mission is to help these retailers save time and money when purchasing what they need.
How do you do so?
We started off with a digital platform connecting the product manufacturers (ex: FMCG companies) to the retailers, eschewing the wholesaler. We wanted the retailers to order directly from the manufacturers on our app. That failed. The adoption of the app was very low. We understood that we had to control the entire process ourselves.
Today, we’ve essentially become a distributor ourselves. Retailers order from us, we buy from manufacturers, store inventory in our warehouses, and organize the delivery. Retailers can order from us through several channels. So far, the majority order through our call center. App usage is still low, but it is growing steadily.
Do you buy from manufacturers before or after retailers order from you?
Majority pre-buy. For fast-moving products like detergent, oil, soap and beverages, we buy in bulk based on our order history, because retailers expect same- or next-day delivery. For slower-moving SKUs we buy closer to demand.
Overall, the balance between pre-buy and buying closer to demand is 80/20.
Do you own the warehouses and delivery vehicles?