GIG Logistics wants to reduce delivery costs for merchants with new Class Plan

by | Feb 10, 2021

The Nigerian eCommerce space is fraught with systemic issues that will surely take deliberate government intervention. Basic infrastructure like roads and an effective addressing system make logistics a worrying pain in the West African nation.

While merchants have to deal with infrastructure gaps, they also have to deal with building customer trust with accurate and timely delivery of goods and services.

Meanwhile, Nigerian logistics companies are innovating their way around these hurdles. This can be found through some strategic partnerships, or the launch of products to ease the process.

In the spirit of such innovation, Nigerian eCommerce giant, GIG Logistics has launched the GIGL Class Plan, a product that wants to address the cost of delivery for merchants playing within and outside Nigeria.

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Steep shipping costs and insurance fees join the aforementioned challenges that merchants have to tackle, so GIGL is introducing a plan which, it insists, will address these cost issues. At a monthly fee of ₦4,999 ($12.44), It offers:

Fifteen per cent (15%) discount on domestic shipping charges and 10% off on all International Shipments

  • Free insurance cover on all shipments
  • Priority Shipping
  • No charges on COD (Cash on Delivery)
  • Free Bulk Pick up for Interstate deliveries
  • E-commerce business growth kit
  • A Dedicated account officer
  • Media visibility for business growth

Before the launch of the GIGL CLASS Plan, the company operated the GIGL eCommerce merchant plan that only offered discounts on shipping and Cash on Delivery service but with charges.

GIGL seems to be creating a very personal and exclusive experience for brands that come on its latest plan.

“We have different mediums for projecting brands on our platform. We do email marketing for brands, we shoot videos that showcase their business and sponsor the same,” says Odafe Henry Ojona, Deputy Director Growth at GIGL.

However, such a close brand association presents some risks regarding trust and people misusing the partnership with such a huge brand. But Ojona insists that members of the Class Plan are verified so the company is sure of the people it’s backing.

If interested, you can sign up to the GIGL Class plan either from the website portal or through the GIGGo App.

Why is GIGL taking this route?

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A closer look at this plan reveals some similarities with services launched by global eCommerce behemoth, Amazon and companies like Jumia and Konga.

In 2016, Konga launched Spaceship, a warehouse facility for third-party eCommerce players. By stocking inventory with Konga, third party sellers save on the cost of logistics and time of delivery. They also got added benefits of better inventory management and safety of products.

Spacehip by Konga has since been discontinued. In 2020, Jumia opened up its logistics services to third-party sellers, a masterful move that leverages the eCommerce infrastructure it has built in recent years.

How’s the GIGL Class Plan different, and why is it taking this route?

Ojona reveals that the company does not yet operate fulfilment centres, but that it is currently in the works.

“For now, customers can either drop off the items at our office or we come to pick it up ourselves. We are offering free bulk pickup for interstate deliveries for our Class Plan members,” he explains.

The company, though, has big eCommerce ambitions in Africa.

“We are building a company that will pioneer the future logistics in Africa. We have a long term goal and we want to be the e-commerce gateway into Africa,” says Chidi Ajaere, GIG Group Chairman and founder of GIGL.

Building the ‘SF express of Africa’, GIGL is the eCommerce giant you don’t hear enough about, but the company has been quietly making strategic moves. In 2020, right after the Lagos Okada ban, the company absorbed ride-hailing company, 1st Ride, in a bid to deepen its last-mile reach in the bustling city of Lagos.

The company now has a physical presence in over 31 of Nigeria’s 36 states, four cities in Ghana and a centre in Houston, Texas US. Soon to have locations in the remaining 5 states, the UK and China. As of 2019, we estimated that the company probably generated up to $48 million in revenue in 2019.

The company believes the new plan will provide an avenue to reach millions of merchants and deepen logistics services in Nigeria.

“It absolutely is just like Netflix, Zoom, and Amazon Prime. If people find value more people will embrace it. With the volume, we can continue to provide undiluted benefits while also adding more benefits,” says Ojona.

Though other e-commerce players have taken similar routes before, for GIGL, the new move is not really about profit but about enabling centralised and decentralised commerce (social/eCommerce), and the business of merchants and SMEs.

Ojona explains that while GIGL is offering free insurance in its new plan, typical insurance coverage is about 5% of the declared value of an item. This means shipping an item worth ₦100, 000 will attract insurance coverage of ₦5,000.

If a seller ships goods valued at this amount, at least once every working day, it will attract insurance costs of ₦100,000 at the end of the month, and ₦1.2 million in a year.

“Meet a need, and the money will follow. The better business is for them, the better it is for us,”

In case you’re wondering why insurance is so important, this article breaks down insurance, and how technology could help capture Nigeria’s untapped market.

Given the scope of GIGL’s ambition, it won’t be surprising to see it launch an in-house third-party market place for merchants.

Ojona refuses to confirm if this is in the works but reveals that the company is working on several huge initiatives, so it will be interesting to watch this space in the coming weeks.

Featured Image: GIGL (Supplied).

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