In a strategic move to consolidate their respective market strengths, two Addis Ababa-based e-commerce platforms, Zmall Delivery and Buy2Go, are initiating a merger and expanding their operations into the agricultural supply chain.
The partnership which aims to streamline logistics, improve delivery efficiency, and provide enhanced services to customers, was officially kicked off with signing a Memorandum of Understanding (MOU) on June 2, 2023, during the Gitrex Africa 2023 conference in Morroco.
The MOU was signed between Khalid Salah, CEO of Buy2Go (Afra Import Export Plc), and Dr. Temesgen Gebrehiwot, CEO of Zmall Delivery (ETTA Solutions Plc).
Zmall is one of Ethiopia’s fastest-growing e-commerce and delivery platforms, offering food delivery from restaurants, groceries from supermarkets, as well as beverages, flowers, and beauty products from various suppliers. The platform aggregates suppliers and also provides package delivery services.
On the other hand, Buy2Go is a Business to Business (B2B) e-commerce marketplace connecting retailers of food and groceries with suppliers. Founded two years ago by Khalid, an Ethiopian born and raised in Yemen, Buy2Go has been steadily growing in the market.
“Buy2Go has partnered with manufacturers like Coca-Cola and 54 Capital from which it sources its products,” Khalid told Shega.
Holding around 120 different items such as pasta, edible oil, and flour in its store, Buy2Go deliver items to 31,000 retailers currently signed on the platform.
“We have so far delivered 12,000 orders,” Khalid added.
If concluded, the merger will involve an equity swap, with each company owning a stake in the other while maintaining separate brands and operations. “Currently, we are in the process of valuing our companies. The final decision on the merger will be done upon completion of the valuation,” Temesgen explained.
“Currently, Zmall deals with Business to Consumer (B2C), while Buy2Go is focused on B2B. The merger will enable us to provide supplies to merchants on Zmall as well,” said Temesgen.
Meanwhile, Zmall will make products sold by Buy2Go available on its platform for direct consumers, with Zmall taking care of the delivery.
“In addition to relying on each other’s strengths, the collaboration will allow us to enter the agricultural supply chain,” added Temesgen.
The new venture, set to be launched in four months, aims to connect food producers directly with retailers, restaurants, and service providers on a single platform. To gain technical support for this initiative, the two startups have also signed another MOU with NinjaCart, one of the largest fresh produce supply chain companies in India. NinjaCart recently raised $145 million from Walmart and Flipkart, valuing the company at $815 million.
The MOU with NinjaCart will enable Zmall and Buy2Go to leverage the expertise and knowledge from their Indian counterpart.
In addition to the merger, Buy2Go and Zmall Delivery plan to establish a fleet sharing arrangement. Zmall currently operates with 70 motorcycles, while Buy2Go has a fleet of 25 trucks. Furthermore, Buy2Go has an additional 38 trucks en route from Djibouti, further bolstering their delivery capabilities.