Meet Ex-Jumia Executives Redefining Logistics Business in Nigeria with Warenext

By Dimeji Akinloye Meet Ex-Jumia Executives Redefining Logistics Business in Nigeria with Warenext

Ayo Olunuga was raised by a father who owned a logistics business in Nigeria. With his experience at the Royal Mail and Jumia, he had mastered the terrain and fully understood where the market gaps were. He was eager to solve the warehousing and last-mile delivery problems but he knew the journey is a marathon, and to win, he couldn’t go it alone.

Ayo teamed up with his friend and former colleague, Damola Ajayi, a sales professional, to start Warenext, an end-to-end digital marketplace. According to the duo, the mission is to shoulder all the logistics burden of SMEs in Nigeria.

Warenext is helping online retailers warehouse their goods on a payas-you-go plan, with efficient and customer-centric last-mile delivery options to choose from on the platform. Ayo and Damola told Business Elites Africa in detail about their journey as employees and now as business owners.

BEA: Firstly, let’s talk about your professional journey before you started Warenext.

Ayo: I have been in the logistics business for about 10 to 15 years. I grew up around a logistics business owned by my father and that’s what I studied at the University as well. I actually had my formal logistics job in the UK, with the Royal Mail. From there I moved on to Aston Martin.

I worked with Jaguar Land Rover and I also worked with Jumia. I was the head of delivery at Jumia. When I left Jumia, I tried my hands on a small logistics business, where we did road and rail transportation for a number of businesses. We moved goods from Apapa all the way to the Kano-Kaduna axis and down south as well. That was what we did for a while, then this modernization of the railway came about, and the railway actually stopped working for some time.

That literarily halted the rail side of the business, but we went on with the road. That’s what I did prior to us joining and starting off Warenext in 2019.

BEA: For someone coming from the logistics industry in the UK where the system works, how would you compare it to the Nigerian terrain?

Ayo: In a way, logistics is similar everywhere, because it’s the same thing that you’re doing. It’s how you do it that differs, and what the rules and regulations allow in each country. Then, the environment is also different - the people you work with and the level of expectation or exposure that they have to the job are really what’s different. In the UK, it’s very regularized, there are certain jobs

that you can do for a certain period of time, then you have to go on, and there are certain rules you have to follow. But in Nigeria, not so much.

Damola: I started off in Human Resources (HR). I was doing recruitment, talent management, and facilitating a lot of training, as far back as when I was a student, a member of the International Association of Students in Economics and Commerce (AISEC), a student organization that basically caters to young people developing their leadership potentials.

So we did a lot of projects, training, and conferences across different countries. This student organization is in 115 countries. So you could travel and do exchange programs. Shortly after school, I went to Ghana, where I did a bit of AISEC stuff as well as talent management. From Ghana, I traveled to Gabon for a project with the United Nations and AISEC. Then, I went to India, where I also worked as HR personnel at TATA group – the IT arm of the company.

We had over 200,000 employees, and I was managing about 9000 people back then. After TATA, I came back to Nigeria and worked as an HR staff at an engineering firm; then quit and went to Jumia.

At Jumia I did recruitment and training as well, more like HR and sales, which was my first experience in sales. Later in Jumia, I moved to become the director for the marketplace because the company needed to move from the retail business into a marketplace business, which informs some of the things we do at Warenext today.

After Jumia, I Joined Carrry1st, a gaming company. I was the manager for growth and expansion in Nigeria, South Africa, and Kenya. After that, I ran into Ayo and Warenext happened.

BEA: So how did Warenext happen? When did you guys start the conversation?

Ayo: Warenext started in August 2019 and it was basically based on some of the challenges in the industry. One of the challenges I faced while working in the UK was that of short-term warehousing. During peak periods like Black Fridays, Christmas, and other major holidays, there is usually a spike in online shopping and all will go through a supply and logistics to get delivered. But the number of warehouses we run throughout the year was not usually sufficient for the peak period.

So we needed additional short-term warehousing spaces to accommodate the extra volume that would come our way. Coming down to Nigeria, we had exactly the same problem at Jumia. So it really doesn’t matter if you are in the UK, US, Nigeria, or Ghana, that logistics issue will be there. More importantly, my girlfriend then had goods she was selling and she was doing that from the house. As her business grew, she had more inventory and the whole house was just filled up with the goods. So we decided to get a small space. But also, the inventory fluctuates, she gets a whole load and as she starts selling, it goes down. So I thought why would we rent a big shop when we have fluctuating demand? But we couldn’t find any solution to her business problem as at that time. And that was where this idea of pay-as-go warehousing came about.

If you have a small business and you buy your goods in bulk, as you sell them, it gets lower so that leaves you with a lot of empty space which you’re not making money on and you’ve already paid your rent upfront, as the tradition is in Nigeria.

If you don’t have anything in the shop, you’re wasting money. When you need a lot of space, you pay for it and when you don’t, you don’t pay. And when you don’t have any inventory, you don’t have to pay a dime. It saves the business money and they can reinvest all the money they would have used for rent into buying more stock. That’s why we started Warenext as a pay-asyou warehousing solution for small and medium-size enterprises.

BEA: All the while, were you both having the conversation of starting the business together?

Ayo: I have always had the idea but wanted the business to go far. There is a popular adage that if you want to go fast, you go alone but if you want to go far, you go with people. And Damola is a friend, we worked at Jumia together, plus he has some skills that I don’t have, so we naturally decided to partner.

BEA: Damola, when Ayo started having the conversation with you, did you key into the vision immediately?

Damola: Yes! As he said, we both had different experiences of the challenges in the logistics industry in Nigeria – from the last mile to short-term warehousing problems. There was a huge demand for space. So the idea was super exciting. And when you talk about SMEs, there are millions of guys out there trying to find solutions to grow their businesses. So it was natural for me to come on board.

BEA: There have been instances of big logistics companies mishandling goods kept in their warehouses. So much that by the time the item is delivered to the consumer, it is in a poorer condition. How are you making sure that doesn’t happen with Warenext?

Ayo: There are a number of touchpoints in the warehousing to delivery cycle, and mishandling could have happened within that chain. Understandably, you would hold the warehousing company responsible for the damage but the warehousing firm could have stored it properly.

The damage could have occurred when the goods were being transported from

the warehouse to a hub for delivery, it could have been mishandled at the hub and it could have been mishandled by the last-mile delivery guy. We are not absolving anyone but the damage could have happened at any point. And it could even be at the customer’s place and he’s looking for a reason to return it. For us, we understand warehousing and we understand how materials should be handled. If you come to our warehouse, you will see our storage facilities, how we handle it, how we pick, pack, and send goods out for delivery.

We have our delivery guys who also come in for training on handling items and that also helps us mitigate issues like this. There is no reason we will set up a business and make that mistake when we have identified the same issues in previous businesses that we have worked at.

We have learnt, we had feedback and we are ensuring that those issues that we faced when we were at our former working places are not repeated at Warenext. That’s why we have never had any issues like that even though we have loads of deliveries going out everyday. Our clients are happy with how their goods are stored in the warehouse because they always come around to look at the warehouse facilities, they see how we handle other people’s items. People are very confident in our business and that’s why they’re still with us.

BEA: So it doesn’t matter how small the goods are or how large, you can accommodate them?

Ayo: Absolutely! Especially for small businesses. You can get a compartment as small as half of a pallet; the pallets are on racks. If you require a bigger space, you pay for more. For example, if you have a small business and you require 3 pallets to accommodate your goods, you pay for 3 pallets and as you sell your items, your pallet space requirement reduces to 2, which means you would only pay for 2 pallets on your next payment. And if you restock and your space requirement increases to 6 pallets, you pay more. That’s how Warenext works. We’re flexible to accommodate your needs. BEA: Apart from warehousing, your platform also has a list of last-mile logistics companies that customers can choose from; tell us about that.

Damola: Maybe we’re focusing so much on warehousing. We are actually an end-to-end logistics platform. We have like three streams of businesses that we do. In itself, Warenext is a digital marketplace, which means we’re a platform where all of these things that we’ve been discussing can happen. We have the pay-asyou-go warehousing part, we also have the last-mile delivery, which is the question you asked. For the lastmile delivery operations, our means of transportation include vans, minibusses, cars, tricycles, and bikes.

On the Warenext platform, we have different delivery companies that can cater to our customers’ varied needs and budgets. For example, if you want to send an item from Victoria Island to Surulere (both in Lagos) and you input the two addresses on the platform, you would see 10 to 15 of our logistics partners that could do the job. You can see Gokada, DHL and many others and you can see different prices.

There are some customers we handle their end-to-end logistics – from warehousing, fulfillment to last-mile delivery. Then our third stream of business is freight. We help customers move trailer-load of goods from state to state. We also experimented recently with our sea freight where we helped customers move goods from China to Nigeria. Of course, we are going to do airfreight too, maybe later in the year.