Q&A: The tech challenges facing South Africa’s home-delivery boom

Andi Friedman is the co-founder of a number of tech startups, including mobile data collection company Mobenzi and food-ordering platform Yumbi, whose focus on connecting restaurants with their customers has fueled online growth for a range of well-known brands including Steers, Burger King and Debonairs Pizza.

Yumbi offers a ‘white label’ software suite of electronic payment, analytics and marketing software, on top of which restaurants and food services can build food-ordering sites labeled with their own brands.

Andi has a degree in computer engineering from the University of KwaZulu-Natal in South Africa and is widely regarded as an authority on the use of mobile technology in health and other areas. Andi has also served as the President of the Cape Town chapter of Entrepreneurs Organisation — a network of more than 12,000 successful entrepreneurs worldwide.

Yumbi has been shaking up the digital ordering landscape since 2009. We sat down with Andi to ask him about the IT challenges to online ordering, home delivery and customer relationship management, as well as the future of food ordering in Africa. 

CIO Africa: Yumbi has been working on home delivery software solutions long before the COVID-19 lockdown happened. How did your systems cope during the pandemic, and what was the key technology you used to cope with that surge in demand?

Thankfully, we invested in building scalable infrastructure long before lockdown hit. It’s true that online order volumes surged once restaurants reopened after the first hard-lockdown, but we didn’t need to change much, as our AWS-based infrastructure is elastic and has been architected to respond dynamically to demand.

Over the years, we’ve developed our own messaging, queueing and workflow systems that allow us to process significant concurrent users and orders. We also have direct integrations with the leading point-of-sale providers that allow us to process higher volumes than other solutions that rely on manual capturing by restaurant staff (e.g. via a tablet placed in-store).

CIO Africa: How viable and sustainable is restaurant home delivery as a healthy, growth area for African entrepreneurs, and how do you see the long-term prospects of this sector in Africa?

Assuming we follow similar trends to the rest of the world, online ordering in Africa has a steep growth path ahead of it. Of course, Africa has its own unique challenges compared to more established markets. For example, in many places there aren’t formal addresses making home delivery more challenging. Connectivity and bandwidth are other common challenges which impact how you architect apps and solutions. But the prospects are very exciting. 

Outside of South Africa, we currently have restaurants using our platform in Namibia, Botswana and will be live in Kenya before the end of the year, with Zambia coming online early next year.

CIO Africa: What are the benefits of white labelling for a CTO in a small business that is looking to home delivery for customers in South Africa?

White-labelling has many benefits, but until recently, it has been more appropriate for larger chains who have their own delivery fleets. The only real option for independent restaurants and smaller chains has been to list with an aggregator. 

Using aggregators exclusively to transact with your customer poses significant risks to restaurant owners — your customer essentially becomes the aggregator’s customer and the direct relationship you had is lost. Aside from the disintermediation risk, the commissions charged by aggregators can be untenable for many restaurants who operate on thin margins. From a Yumbi perspective, our solution gives restaurants the ability to operate their own online ordering experiences (including branded websites, mobile apps, call centre) and then decide whether they want to fulfil delivery orders themselves (if they have a vehicle/fleet) or outsource delivery to another party (e.g. during peak periods).

We now offer integrations with UberDirect and OrderIn (with more on the way) which means that restaurants can retain control over ordering experience and the relationship with their customer, whilst outsourcing the delivery component — something that we believe is a game changer for the industry.

CIO Africa: What makes food and restaurants so unique as a business challenge? Can your systems be used for other industries?

Part of the reason our solution has been a success is that we have focused on solving challenges that are fairly unique to the restaurant industry. The fact that orders need to be handled in real-time makes our solution quite different from your more “traditional” e-commerce offering. Other key differences are the complexity of food menus and the level of customisation that they require. For example, building your own pizza from scratch, or making changes to one of the available options is beyond the capability of what most generic ecommerce systems can handle elegantly. Although we have focused exclusively on the restaurant industry until now, what we offer is essentially a platform for real-time ecommerce and we are now in the process of exploring applications in other verticals that need similar capabilities.

CIO Africa: What areas or touchpoints are the hardest for online systems to integrate with the real world?

Some point-of-sale providers either don’t offer APIs that allow you to integrate easily or make the integration very expensive to force the restaurant into using the online ordering solution that the POS provider offers. Call-in orders also still make up a significant portion of orders that restaurants receive. To bring these into the same workflow, we offer restaurants a solution that allows calls to be routed to their own (or an outsourced) call centre. The software picks up the caller’s customer profile and presents this to an agent via a purpose-built interface who can then capture and submit the order digitally to the restaurant on the customer’s behalf. This allows in-store staff to focus on walk-in and dine-in customers.

CIO Africa: What is the value of all the reporting/customer insights that CMS platforms generate?

 Restaurants are beginning to realise that understanding their customer more deeply is critical to success and being able to communicate directly using these insights is essential. This data is fundamental to understanding and optimising customer acquisition, behaviour, retention, loyalty and satisfaction. From an operations perspective, having this data allows restaurants to identify and address process inefficiencies, plan more effectively and improve margins. By identifying trends (e.g. delivery heat maps) data can also guide strategic decisions about new market and product opportunities (e.g. where to open new stores). 

Unlocking the value contained in the raw data requires expert storage, processing, modelling and visualisation so that insights can be surfaced to business stakeholders in a simple, understandable and useful way.

CIO Africa: Do you have any advice for CTOs who are trying to move into the home delivery space in an African context?

Home delivery has become a very competitive space with billions being invested and, generally speaking, it requires economies of scale to operate sustainably. There are a number of large aggregators already active on the continent who would be very difficult to compete with head-on as they have such deep pockets that allow them to subsidise the real costs to gain market share. Our view is that, for restaurants, it’s not an “either / or” decision. We recommend that restaurants list with an aggregator, but you need to have your own direct channel to the customer too. 

We believe that the food tech industry is eventually going to mature into an ‘ecosystem’ which hopefully means there will be more opportunities for a wider variety of players who can integrate and add value. This is clearly an exciting opportunity for new solutions.