Deepankar Rustagi - Afrikan Heroes

How African e-Commerce Will Prosper Through Verticalisation

December 12, 2022

Deepankar Rustagi, founder and chief executive officer of Nigerian retail-tech venture Omnibiz

African e-commerce will prosper through a verticalised approach, and startups operating in the space should seek to acknowledge and complement the strengths of existing retailers rather than reinventing the wheel, according to Deepankar Rustagi, founder and chief executive officer of Nigerian retail-tech venture Omnibiz.

Founded in June 2019, Omnibiz allows retailers to place orders at their convenience and have goods delivered to their doorstep with zero delivery costs. Retailers can stock up their shops using the company’s mobile apps, WhatsApp channel, or a dedicated care number.

Speaking to Disrupt Africa during a four-part podcast series on the African e-commerce and retail-tech space – which was produced in partnership with with Omnibiz and Kenyan retail-tech startup MarketForce – Rustagi says African e-commerce is not likely to follow the global “Amazon” style model of a mega-platform offering multiple goods. He believes verticalisation is the route to a thriving online retail ecosystem on the continent.

“We think e-commerce will work with a niche e-commerce. It enables all the players to focus their attention on one direction, so, for example, e-commerce for art, e-commerce for fashion, e-commerce for electronics. As much as we would like one company to do it all, it requires a very different infrastructure, from warehousing to logistics, to demand creation […] We feel because the African market is very, very fragmented, it will have verticalisation, where people will be leaders of different verticals, and will evolve as mega-platforms within these verticals rather than with multiple products,” he says.

Commerce is a difficult market to crack in Africa given the practical realities and infrastructure constraints involved with doing business, however, Rustagi says it is the most important area to focus on in the coming years as the continent’s youthful population grows and demand for essential goods becomes more pressurised.

“Retail is the toughest problem to solve, but it’s also the most important problem to solve in the coming years in the African space because of the growth in population, because of the young population, and because of the way the markets are emerging. And I would say, as the projections show, by 2025-2030, e-commerce will be a significant part of overall trade in Africa.”

With the contributions of retail-tech, the experience of consumers will evolve significantly – improving things like purchasing process, reach of products and inventory range. Eventually the experience will be homogenous regardless of where in the country or continent a consumer is from. This will do wonders for access to essential goods, Rustagi says.

But in building this future of retail-tech, startups don’t need to “reinvent the wheel”, he says. Startups should focus on the strengths and challenges actually faced by existing small retailers currently supplying the majority of Africa’s consumers.

“Tech is now revolutionising [the work of brick-and-mortar retailers]by providing a digital backend to these retailers so their transactions are noted, they become more worthy of credit,and they can increase their working capital, their inventory, increase their offering to their customers, growing their topline and building their profitability. […] African retailers never had a technology backend supporting them to scale, today, that tech backend is being developed enabling them to scale up,” Rustagi says.“We don’t have to reinvent the wheel, in digitising, in creating retail-tech, we have to see where the strength of existing retail lies, and how we can complement that with digitisation. If the focus is on complementing, we are able to focus on a larger number of retailers, and in a more effective manner

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Nigerian Ecommerce Startup Omnibiz, Founded By Ex-VConnet CEO, Raises $3M Seed

August 10, 2021

Omnibiz, an ecommerce startup located in Lagos, has raised $3 million in a seed round to expand into other markets. V&R Africa, Timon Capital, and Tangerine Insurance led Omnibiz’s seed round. Lofty Inc., Musha Ventures, Sunu Capital, Launch Africa, and Rising Tide Africa were also part of the round. It brings the total amount invested by the corporation to $4 million. Rustagi also revealed that the startup received Seedstars funding and will join in the accelerator’s growth program.

Omnibiz CEO Deepankar Rustagi. — Omnibiz *CEO* Deepankar Rustagi.

“One of the key things we intend to do is to bring on medium-scale manufacturers who find it difficult to get the last-mile delivery to reach customers. We want to scale them so they can reach a large number of retailers. That’s something we are rolling out so we can onboard more and more manufacturers,” said CEO Deepankar Rustagi.

Omnibiz will utilize the funds to expand in additional West African cities outside of Nigeria, including Abidjan, Takoradi, Kumasi, and Accra, over the next few months. The main categories on the Omnibiz platform include food, non-alcoholic beverages, personal care, and infant care items. The company intends to grow into other areas such as alcoholic beverages and over-the-counter pharmaceuticals.

Omnibiz will also use the funds to develop new technology products that will benefit retailers. The company will collaborate with partners to boost the availability of working cash for merchants and provide digital solutions to help them run their businesses more efficiently.

Why The Investors Invested

There are a host of probable reasons why investors invested in this round.
Apart from coming from a strong entrepreneurial background, Rustagi had consulted for a long time in the Fast Moving Consumer Goods (FMCG) market. In 2011, he founded VConnect, an online marketplace and search engine to identify local professionals for service needs. Before closing down in 2017, Rustagi said the website connected people with over 100 services and 500,000 companies around the country.

“I think Omnibiz will be the role model for B2B retail in Africa and can scale well into other emerging markets. We are excited and happy to be supporting Omnibiz in all ways beyond just providing capital,” Raj Kulasingam and Vishal Agarwal of V&R Africa said in a statement.

Investors also seemed convinced because of Rustagi’s proposition that he would be leveraging resources and lessons from his failed startup to grow his new venture.

“We knew about small businesses and what sort of technology they like. That was our specialization, but our business model didn’t work. But in this case [Omnibiz], the monetization happens on our platform, and there’s money to be made for the small business. We’ve been growing 30% month-on-month for the last 12 months,” he said.

His former venture, VConnect, failed to monetize and scale, hence its shutdown.

A Look At What The Startup Does

Launched in 2019 by Deepankar Rustagi —an Indian CEO who has lived in Nigeria for more than two decades — Omnibiz is a business-to-business e-commerce platform that connects manufacturers of fast-moving consumer goods (FMCGs) with retailers by digitizing supply chain stakeholders.
Retailers can use the platform’s mobile app, WhatsApp channel, and phone number to fill their stores. Retailers can “make orders at their leisure and have things delivered to their doorstep at no cost,” according to Omnibiz.

Omnibiz uses a retail distribution model that is asset-light. When a retailer places an order on the Omnibiz platform, it is sent to partner distributors, who keep items on behalf of manufacturers and are known for their warehouse and transportation services.

These distributors can concentrate entirely on warehousing with Omnibiz, leaving the transportation of goods to Omnibiz’s third-party logistics suppliers. Omnibiz is used by the drivers of various logistics companies to efficiently distribute orders to retailers within 24 hours.

Lagos, Abuja, Port Harcourt, and Kaduna are the four cities where the B2B e-commerce retail company is now operating. Rustagi adds that the company will add two additional cities, Ibadan and Kano, by the end of August.

Omnibiz Ecommerce Omnibiz Ecommerce

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer