Covid-19 has left many businesses in disarray. But not OneCart, South Africa’s on-demand grocery delivery service that rewarded its founders Lynton Peters and Ariel Navarro with record growth.
“What was in that first order when we started, do you remember, Ari?” Lynton Peters, the CEO of OneCart, asks his co-founder and COO, Ariel Navarro.
“Probably water and bananas,” Navarro laughs.
“What are people buying now?” Peters asked again.
“Everything!” Navarro laughs again.
When South African President, Cyril Ramaphosa, declared the National State of Disaster on March 15 and imposed a strict Level 5 lockdown on March 27, this prohibited large public gatherings, local and international travel, and schools and universities from continuing in-person classes.
The ides of March brought with it fear, frenzy and public panic as South Africans flocked to their local supermarkets to stock up on essentials such as toilet paper, soap, cleaning agents, non-perishables, disinfectants and sanitizers.
This is when OneCart went from serving about 150-250 shoppers a day to almost 10 times that number today.
“I think what worked in our favor was that consumers were more willing to or wanted to stay at home. So what we saw was obviously a greater adoption of our product in terms of growth. What we saw was, in essence, about 500% growth during Covid, so it was quite significant,” says Peters.
The on-demand grocery delivery platform allows consumers to shop from multiple stores in a “single cart”, hence OneCart. So instead of having to walk across the entire shopping center where perhaps food retailer Woolworths could be located on one end and Pick n’ Pay on the other, OneCart gives you a “virtual mall” experience on your single device. Groceries are then delivered to consumers within two hours or at a time preferred by them.
“I think the inspiration behind building OneCart and founding OneCart was just to create a way for consumers to shop online the way they would usually shop offline when they’re at a mall,” Peters explains.
The unprecedented outbreak of the coronavirus has brought on-demand grocery service platforms like OneCart to the forefront, according to an international report by Future Market Insights (FMI) released in June. More new consumers are converting to online shopping for buying provisions rather than risk standing in a supermarket queue. This is the reason OneCart has seen a massive surge on its platform in the past few months.
“There is also the fact that in 2018 we only did 30 orders in an entire month and now we have 30,000 orders a month.” – Lynton Peters
But this exceptional growth does not come without its pain points, and founders Peters, 34, and Navarro, 31, know that. February, March, and April of this year have been the toughest months the company has experienced since their inception in 2016. Like many businesses ploughing through the pandemic, they were forced to look at how OneCart could operate while still keeping employees, employers and consumers safe.
Realizing there is indeed an opportunity for OneCart to succeed, especially since consumers did not want to find themselves at shopping centers, it fell on Peters and Navarro to quickly understand the demand and heightened traffic on the website and application. And with the increase in usage, this then involved the company to expand its operations.
“We doubled the number of collection locations we were in, we almost tripled the staff complement. We were definitely oversupplied in a few areas in order to catch up with the backlog that we had hit. So, there were a lot of challenges we faced during that time,” recalls Navarro.
But this operation did not just happen overnight.
After having over 10 years of experience in the corporate world as an electronic engineer in the software and electronics industry, and later as an innovation consultant both locally and in Singapore, Peters decided in 2016 to do market research for OneCart in Johannesburg to test the validity of the concept. While in Morningside, a commercial and residential suburb in Sandton, the business hub of Johannesburg, Peters was met with owners from multiple retail stores, one of them being Mr. Pet (an upmarket retail store which sells food and accessories for pets). Mr. Pet turned out to be a business owned by Navarro’s father.
“I expected this older guy to come out and instead this young guy comes out,” Peters laughs with Navarro as he recalls the memory of their first meeting. “And when he came in, we started talking about tech and innovation. And I guess we just started talking about our backgrounds. And I was involved in the entrepreneur ecosystem before I was transitioning from corporate at the time. And I guess we just kept on chatting and probably like speaking for about six months before finally deciding to come together.”
“The only way to really understand how the systems work was to get there and actually do everything from the ground up. So there was no, you know, fancy apps like we have today that did everything for us.” – Ariel Navarro
Back then, like any startup, the hard work started with Navarro and Peters running around and doing everything, which included taking orders on WhatsApp (as they did not have an app as yet), buying the actual products, and delivering them to the consumer.
“The only way to really understand how the systems work was to get there and actually do everything from the ground up. So there was no, you know, fancy apps like we have today that did everything for us,” Navarro says.
“When we started the business, it was just literally Ari and myself running everything. So the only person that we could hire was a shopper and we did that in December 2017,” Peters explains. “I remember there was a point where we were physically doing all the shopping and delivering or ordering. We literally had to do everything.”
“I remember with those first few orders, but it was almost like there was a panic in the air when there was an order because it was so new that we just wanted to get that one order right. And you are so nervous when you see the order come in, you’re like excited but nervous,” says Navarro.
In the early days of OneCart, consumers were limited to just Johannesburg which presumably could have taken a large toll on the actual company as operations were also limited. Now, most of OneCart’s consumers, ranging from a wide variety of ages, are largely based in four of South Africa’s most popular cities: Cape Town, Pretoria, Johannesburg and Durban. And though they do not deliver in the townships or informal settlements, Peters has said this is something they do plan on expanding to.
A lot has changed since the on-demand grocery delivery platform officially launched in 2018. For one, they have over 200 personal ‘shoppers’ and over 100 drivers.
“There is also the fact that in 2018, we only did 30 orders in an entire month and now we have 30,000 orders a month,” Peters says.
Ahead of the March lockdown, the duo noted a huge increase in consumers stockpiling even though they were prohibited to do so by South African Trade and Industry Minister Ebrahim Patel on March 19, when he announced regulations to control the pricing of goods after noting price hikes implemented by retailers.
“Today, we issue directions under the Disaster Management Act and regulations under both the Competition Act and Consumer Protection Act, dealing with pricing and supply matters during the national disaster to ensure we do not have unjustified price hikes or stockpiling of goods,” said Patel.
“People would initially buy in bulk, trying to stockpile out your essential items like toilet paper, which was quite a significant one. The stores were running out of that one. But then we had to get to a point where we had to limit the number of items in a basket. And now, I think the trend is sort of normalizing again,” Peters says.
Though the company has experienced difficulties, there are “war stories” beyond Covid-19 that have motivated them to not give up. The one that comes to mind is in 2019 when they had run out of funds and were forced to take out a loan in order to pay their staff. Another one would be during Covid-19 when they had sleepless nights for three months as they had to think of how they would expand operations while keeping every one of their staff members safe.
“We have had many instances where we should have given up but we persisted. If we think of war stories we also think about the times where we didn’t give up because we believed in ourselves,” Peters says.