Can Mano win in Nigeria's food delivery market?

Episode 231 July 04, 2024 00:43:08
Can Mano win in Nigeria's food delivery market?
Techpoint Africa Podcast
Can Mano win in Nigeria's food delivery market?

Jul 04 2024 | 00:43:08

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Hosted By

Chimgozirim Nwokoma Oluwanifemi Kolawole Bolu Abiodun

Show Notes

Today on the Techpoint Africa Podcast, our hosts are joined by Olaleye Oladimeji, Partner, Legalpreneur Attorneys & Consulting and Founder, Registat.io to discuss:
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Link to Insight of the Week: Nigeria's quarterly VAT collections have reached new highs in seven consecutive quarters since Q4 2021
 
Timestamps
00:00 - Intro
01:36 - Kucoin to charge VAT in NIgeria
27:23 - Mano's move to food delivery
 
Useful links
This episode was produced by Ogheneruemu Oneyibo and Crystal-Agnes Joseph
 
Email us your feedback at podcast@techpoint.africa. Visit www.techpoint.africa/ for more stories.
 
Music - Beach by MBB -
https://www.youtube.com/watch?v=dEnQ8dHwDSk
 
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View Full Transcript

Episode Transcript

[00:00:00] Speaker A: Hello, everyone. Welcome back to the Tech Points Africa podcast. I'm Oluani Femi, and with me in the studio today is Chimgozurim. I don't know whether you guys missed him last week, but yeah, he's in the studio today, as I promised. Yeah, last week we had interesting conversations, and today's conversations have a little bit similarity to what we did last week. But I'm sure they are important to what is going on in the tech ecosystem and what people are talking about, maybe not on the streets, but on the Internet. So we start with a new directive from the nigerian government which was reviewed by the crypto exchange Kucoin when he sent a notification to its customers that they will be paying a certain tax on their crypto transactions, which is in itself sounds weird, right? We'll discuss that. And that is what our guests that will be joining us today will discuss with us. And then we move from there to a. To a startup, a grocery delivery startup that decides to enter into the food delivery space that is Manu in Nigeria. Right? They would. They are planning to enter into the food delivery space in Lagos and Abuja. Kucoin users in Nigeria got notifications yesterday in their emails asking, telling them or informing them that they will start charging a VAT of seven, a 7.5% VAT of on trades that will be done on the platform. This came as a shock, giving how the nigerian government disposition to crypto transactions, like every other data asset, their reaction to it right from time and now you want to get them, you want to tax them on this. Is it the consumable tax? I've forgotten what they call general name for the 7.5% tax? Yes. Just vats? Yes, yes. On it. And it's surprising, and it got us to ask some questions that is this even normal? Right. And to answer that question today, we have with us on this podcast, Olaleye Oladimeji is the founder of Register IO. He's also, he's a lawyer, he's a legal practitioner. He's a partner at Legacy entrepreneur Antonis and consulting. And he's joining us on the call today to answer some of these questions that we have about this new development. Before he introduces himself, I must mention that so far, from the time we're having this conversation, we could only confirm this communication from Kucoin. Other exchanges operate nigerian exchanges. We've not been able to confirm whether they sent similar communications to their users. So thanks for joining us on this conversation today. Can you just say hi to our listeners and our audience. [00:03:28] Speaker B: Good morning. Thank you very much for having me. It's a pleasure to be here. Thank you for that introduction, they said. I'm a partner at legal Preneur attorneys and consulting, all of them based here in Nigeria, and also the founder of Register IO, which is an international function service for businesses. [00:03:51] Speaker A: Yeah. Thank you for joining us on this call, Ola Laye. Let's just get into the conversation. You know, we understand how quite unregulated the crypto space is in Nigeria. And with that at the back of our mind and the, let me use this word base that goes on every other market day between crypto startups and the government, is there any legal backing for this new VAT charge as communicated by KuCoin? [00:04:22] Speaker B: Yes. Thank you very much. Well, I would say currently as an industry, there are minimal clarity regarding number of things and taxes, actually even being one of the things. With the introduction of the Finance act in 2023, digital assets were included in the provision of section three of the act, which capital gains tax were to apply to. And rightfully so. I mean, being a space that treats volume and there are a lot of financial transactions that go undy. Right. I'm sure the industry is definitely willing to have the government come in with what can work for the ecosystem. In terms of tactician, which capital gaze was one of those that they introduced to 10% with the recent announcement by KuCon yesterday regarding the 7.5% of VAT that they will be charging? I mean, I would say it's something that was expected because VAT generally applied to goods and services provided to Nigerians or within nigerian space. But I mean, you can't rightfully tax a service that don't even have regulatory clarity around a certain number of things. Right. We have a disjointed recognition where there is a lack of coordination between the main regulators, that primarily being the SEC and TP. So what are we doing that we have a regulation from the SEC that contradicts what the position of the CBN is. And we have the CBN, even the currency transactions being conducted through the traditional financial system. So how can you say you want to tax this industry that you are failed to basically put in, put out those frameworks that would actually put the mind of stakeholders. Right. There are still a number of issues that current, you know, are still being addressed in space. Right. But I think regulation is one of those things. It's more of the situation of the cut before the US. Right. I mean, eventually everyone recognizes the fact that there has to be, you know, a clear framework around taxes of which that isn't even applicable and, you know, available at this time. Even the profession of the Art, the Finance act that was introduced doesn't even clearly define what is the detailed assets, what constitutes that? Is it just, are we looking at those assets that we can regard as commodities or securities? Are we saying, which of this will the capital gains apply? Because when you look at capital gains tax example, that lesson would be on whatever profit you have made of whatever assets, the gains you've made basically on the assets that you held for a period of time. Right now, looking at ZAT itself, it's a tax that is deductible of, for instance, from the transaction that is done with top. But you want to even dock this VAT tax from transactions that you do not even have a clear framework to say this is legitimate or this is how it should be done. Even have a clear monetary framework to even make sure that these taxes that are deducted are what are properly remitted to you, are what tree records are what are declared to you by these exchanges. So in the long run, I mean, you still have some of these, the regulators will still be banked. Long run, Charlie, when there's no clarity around. And it just now mean a way still not showing readiness really to be honest, because the foundations just have to be new, dry. And of course we understand the government would want to see how it can benefit the ecosystem in general in terms of boosting the economic prosperity of Nigeria by taxing some of these industries. But you have to have a clear legal framework for some of this. You can't keep treating them as they are criminals or, you know, it's a daft market basically like a former, you know, CBN government governor said, you know, back in the day. So, I mean, those days are passed, I think more education needs done, you know, for the regulators in this thing. But we need, you know, to have proper foundation set. [00:09:02] Speaker A: Yes. So from what you've mentioned, Lale, is that this is not illegal, this is not out of place. It is just that you don't have the right framework to make it work. Right? [00:09:14] Speaker B: Yes, exactly that. And based on the premise that a lack of regulation in a space, you know, you shouldn't be looking at taxing when, you know, there's the regulation isn't just there, the frameworks aren't there, the foundation isn't there, even the taxation. Right. There is no clarity as to, as to the nature of taxes that should apply and which kind of asset it should apply to. And in my opinion, in a robust ecosystem encouraging innovation and investment in this sort of areas. Nothing stops the regulators, the firs from considering probably tax a vax exemption for some of these nature of transactions that are conducted in this space. Thank you. [00:10:03] Speaker C: Today's insight of the week is Nigeria's quarterly VAT collections. They have reached new highs in seven consecutive quarters since Q 420 21. In Q 120 23 a total of 781 billion naira was collected in VAT. If you want a link to this insight simply go to the description and you find the link there. And if you're looking for more interesting insights like this simply go to Intelpoint co. [00:10:28] Speaker A: Thank you very much for that. I don't know if chimkozyme has any question but before he goes I want to ask this. You mentioned that digital assets can be taxed. Can indeed be taxed. Right. So with that in mind, what are like the digital assets that you'd say the government as like we already have like a framework around tasks. Ah, that word can be problematic. Yes. What are like the digital assets that Nigerians currently use or trade that you feel that the system or there's a framework around or there's no framework around any form of taxing digital assets in Nigeria at the moment. [00:11:20] Speaker B: Right. Right I great question. So I would say based on existing regulation and what is as best practice in the industry. Right. So when you have certain assets like digital assets that are held by individuals or corporate bodies for the purpose of investment, right. When you have probably about an asset worth let's say maybe thousand dollars, right. And over time holding that particular asset there is a profit, capital gain again on the asset probably it rises up to the point where it's worth probably 1400. So dollar 400 profit on that that can be tacked. There's a capital gains tax that would apply to that because that is solely for investment purpose and you know profits were made which you know is applicable in you know many ecosystem. I mean you could even have a system which I think some of that even applies to this finance act are able to apply capital losses, right. And you're setting over a period of time probably if you make probably losses on those kind of assets you can probably set off those losses against whatever deductibles that you have, right. So primarily for those purposes you can have those kind of taxes and buying and you know for the VAT that was mentioned, right. That is for, you know trading transactions according to work on sent out which I read, you know the trading transactions that are conducted, you know on their platform. So as a platform. They have the training right to doctor at the point of transaction and remedy, right? But many things are still unaddressed, right. You have, you don't even have the compliance and monitoring structure yet in place. The necessary tools, the necessary industry collaborations at this time have not been firmed up. So a lot of things are still yet to be addressed. You can't monitor becomes an issue. The exchanges could just declare this thing and say, okay, this is the volume that we did within this while and all that becomes a challenge. You can possibly monitor this with some benefit that you could have had from actually having a coordinated implementation of whatever the current regulations are in place or whatever reviews are to be done, of which they recently even propose some new amendments to the SEC rooms. And not even all assets can be regulated by the SEC because only assets that are securities that fall within the folk view of what the SDC can regulate. Some assets can be deemed as commodity. So there are a whole lot of things to be addressed altogether. And for there to be a proper framework in place, proper foundations need, then you could even propose taxes. I'm sure the industry is winning. Of course the industry wants to contribute. This is USD economy. They definitely be proud to contribute to the economic prosperity of Nigeria. Charlie, at the time where we need to boost our GDP and our earnings and over time it has improved. The results show this, that the technology space has contributed so much to what GDP has come into not just Nigeria but all over Africa. And we have to just support this innovation and make sure we benefit the economy and also boost investment. So having this thing set up would only incentivize small time crypto exchanges. The local players from interesting in the market. I mean we could have bigger exchanges being able to meet up some of these licensing requirements, the taxation provisions, which even though they are still on bread, I'm sure all this is just more of an attempt from Kucoin to stay compliant in some way and try to have regulatory engagement. There are very few number of exchanges that I've actually gotten those licensing requirements that they put into place in 2022. So all of other things have to be addressed beyond just having regulatory incubation programs set up. You know, still after the end, within a year you're still requiring them to meet those requirements with those borglas amount in this economy. So we need to go back and actually set things right, you know, with the right foundations, basically that we can have conversations around things like tactics and what the industry will definitely willing to comply. Thank you. [00:16:18] Speaker D: Okay, so you spoke earlier about the lack of clarity in that space. And so far we've only seen Kucoin announce this move and we haven't seen any official communication from the regulator to say, we are now taxing crypto gains in Nigeria. So I don't know, do you think this could be like the first of many to come or is like basically, should we be expecting more crypto exchanges to come up with these updates or with these developments, basically informing their users that they would be charged 7.5% VAT on crypto trades? [00:17:00] Speaker B: Thank you very much for that. I think that's a question, but it would be only right for us to expect that other exchanges want to follow suit, right? Because Kucoin as an exchange is a major international player and they've been operating in the space for a while. We know the recent issues that exchanges like binance about within the ecosystem. It's only right that we expect other exchanges may want to follow suit, though it's still going to be subject to whatever fiRs actually put out there as a statement regarding, uh, you know, this implementation, because now you see different regulators coming into place. We have the SSE in now. The CBN came with its own. The NFI U two has, uh, you know, uh, a couple of regulations already into places as well regarding monitoring and, uh, obligations. Now FRS has come into the picture right now. I think all of these regulators need to come together and actually, um, have a proper communication with the industrial stakeholder and the major players in this space, right. Because I would not expect, which I know, which is likely, what it would do is to have other exchanges also follow suit that actually addressing. You have to actually more or less ignoring the elephant in the room, right. So you actually have to address these issues that have been there if you don't see living. So all these exchanges to make moves regarding whatever they would implement and that kind of thing, I would expect, probably coin have had communications with FIRs before taking this step and the likely probable fear of being subject to the same issues that binance had in Nigeria. And they want to remain relevant within the ecosystem. They want to, you can see this is exactly a step showing they want to be involved. But the reckless clarity and authenticity that really in the market is what has been making many of these players just take a step back a bit and engage selectively regarding how they operate within this market. The weakness is there and other extent this may follow suit, but not just the best way to go about it without having proper statements out there regarding what it should be, what should apply, and actually making sure they get stakeholder feedback, some of these introductions that they want to make because without the stakeholders actually being able to meet up this requirement, it's more like having laws that cannot govern, you know, people and you know, without there being effective laws in place, I mean, let us just chaos in whatever industry, sector, whatever country, you know, that happens. [00:19:59] Speaker A: Yeah, I noticed that you said many times in your response how the ecosystem is willing, willing they are not stronger. Whatever you ask them to do, they will be able to do. You said it in different ways and I want us to close this conversation with this. The possible impact. Okay. Say the government eventually puts in place what they are supposed to put in place. Right. And they are able to like move forward with taxing gains from this digital asset. Right. What do you feel would be the impact, either negative or positive on the, on the, on the businesses? Right. I'm talking about both global and local exchanges now and also on the crypto ecosystem in general, which will also include the users, the people that trade crypto on this platform. So let's see everything ideally in place and this, the government can go ahead to tax this digital asset. What do you feel will be the impact on business and the ecosystem? [00:21:10] Speaker B: All right. I think you are very positive, to be honest overall because based on the nature of the financial transactions itself, you would expect the government and Nigeria as a whole should benefit from the business activities that are ongoing. It is very clear that there are various stakeholder groups and self regulating organizations that have been trying to actively engage with the government and the regulators in particular. We have a number of them, CBAN Econ, a number of them operating within the ecosystem and they tried over time to resolve these issues, have a roundtable with them and I think there are still outstanding issues. But for sure over time I believe going to be a good contributor to the economy, the economic prosperity of Nigeria, the GDP. And we have so many other countries that are making good revenue from some of these licensing fees that they charge players in the space within the ecosystem and the taxes. But the taxes have to be reasonable, of course. And I'll take a queue from the example of South Africa with the recently introduced regulations and licensing requirements within the ecosystem which hundreds of exchanges are the other players within the interlaced space. I've been able to seek this licensing and the government is benefiting actively and being able to monitor these exchanges because you need those monitoring, monitoring mechanisms. They are just necessary. Without those, I mean you can't effectively regulate and you implement whatever you ask without those places and plugging into that is having them licensed and having them commit to operate within those regulatory guidelines that have been set in place. So viral is a positive and we're hoping that they send the right foundation. Foundation, that's very important. The right foundations before they go ahead to equal agreements and have probably a referendum regarding what should apply, what reasonably applies. And you know, how do you even collect these crypto taxes? Are you collecting it? Are you collecting the crypto assets? I mean, you're saying I cannot operate a bank account, right? [00:23:42] Speaker A: Exactly. [00:23:44] Speaker B: That does like crypto transactions and they want to tax me. So how do I pay? Should I send bitcoin to the wallet of the FIRS. [00:23:53] Speaker A: As bitcoin wallet? [00:23:58] Speaker B: Some of these questions are just, you know, they are questions. I think they are necessary. And with the right foundations, I don't think it will throw be much of a challenge. But I mean, as we always, you know, Nigeria is a very ecosystems operating. [00:24:15] Speaker A: Yeah, so I know that I said that's like the last question, but something just dropped in my mind. Now, if there are like best practices, like there are other parts of the world that digital assets have been successfully taxed, I don't know if you have an idea of that. [00:24:31] Speaker B: Yeah, I mean, a number of places, right. As you, as you know, the number of jurisdictions where regulations have been introduced. I know South Africa that I mentioned for one, is one of the few african countries that have regulations in place at this point. India as well, introduced taxes at a point, I think sometime last year they proposed about 30% the implementation of that so far. I don't know yet about the implementation of that so far, but 30% was introduced. And in Europe too as well, with the limitation of mica, right. They're going to declare provisions and implementation around tactics. But what you will see when you construct all these jurisdictions and some of these examples and just link down, I would note that they have actual regulations, they have a system that is working. Everyone knows the right and obligations that they have in place. And there are things that are attainable, right. That are not, that are not in a way rigid to the ecosystem and, you know, protestant to act in a certain way against the regulators. And we've seen this in so many other places that work. They have Estonia as well, one of the greatest countries where innovation and a lot of companies are incorporating and having their business activities out of there. So there are cases, there are the cases that you can actually study for some of these regimes where you can actually understand how they've done it and how they are even able to monitor compliance, because having lost into place without compliance, you know, it all doesn't matter. Do not have those mechanisms, right? [00:26:18] Speaker A: So yeah, yeah. Thank you very much olale for answering so gracefully. I love that you added a lot of insight and backed it up with sufficient examples. Thank you for joining us on this conversation on the Tech Point Africa podcast today. We love having you around. Loved having you around. And we hope that subsequently, if we reach out to you, you won't mind obliging to our request. [00:26:46] Speaker B: Thank you so much. It's a pleasure joining you and lending out a voice to this issue. [00:26:51] Speaker A: Yes, thank you. [00:26:52] Speaker C: We have three interesting newsletters. The first is Tech Point Digest, which is a five minute run through of everything happening in tech all around Africa. The second is about VC's founders and investments. And to get information on all those things, simply subscribe to equity merchants. If you're more interested in the workplace and the new trends around employment and employees, simply subscribe to the modern workplace newsletter. You find the link to these newsletters in the description. [00:27:24] Speaker A: So yeah, Mano, the Aguelanhouse grocery delivery startup that launched in Nigeria in 2022 has expanded or has announced its expansion into food delivery in Lagos and Abuja. You know, I find this as an interesting story is the ongoing conversation about the macroeconomic situations situation happening in Nigeria and how it's affecting people's disposable income and, and how much they use these tech solutions for their day to day lives. And now another player is entry into this space. So Chimkozrim like sincerely and from sincerely, I wanted to say this sincerely Adam, with your coverage of the startup space and the people that have entered into this space, startups that have entered into this space and have left. Do you think the nigerian market needs another food delivery startup? [00:28:34] Speaker D: That's a million. Sorry, a billion naira question. I was going to use million dollar, but our currency is not exactly doing very well. But yes. I don't know. Do we really need another competitor? Probably. I don't think it's a yes or no question. Nobody would give you a straight answer or should give you a straight answer if you do. Well, maybe you know something that we do not know, but I don't think we do. Like, what am I even saying? We probably do. We probably don't. So I think what's to be said is the food delivery market in Nigeria is hardly saturated. We have a number of players and what's interesting is that everybody seems to be going after at least with the current crop of players. We have everybody's going after a different group of customers. So you would first think childe is going after a specific group of customers, right? I don't know. Jazz is, do they really have money like that? But, yeah, they're going for the person who is willing to pay just a little more to get the food that they want. Then you have a food court, for example. Food court is not food delivery, but they are also targeting a very different niche. Niche. Same with hay food. So we kind of have. Yes, while it's still food delivery, but we have, like. I guess I'll call that sub niches from what we have seen so far. So maybe one more player is welcome. I mean, what I would want to know is, do you. Of course, you know, Amano is just going to continue operating in Lagos and Abuja. I do not know if they would begin to consider other markets. Sorry. Other cities, perhaps Ibadan. Everyone does. Lagos, Abuja, then Port Harcourt. I do not know if they would also be considering similar moves. Boy, it's. I guess it's a welcome development. [00:30:43] Speaker A: Looking at how manual has fed in with grocery delivery, do you think they have, like, a good shot at. Since it's as if they have, like, the infrastructure, they're probably going to convert their current customer base to groceries. Groceries and food. They are quite similar. So do you think, like, they have, like, a chance and they don't have to, like, struggle much, giving what they already have access to. [00:31:09] Speaker D: Okay. So I think they have more than a chance. [00:31:12] Speaker A: Okay. [00:31:13] Speaker D: For a number of reasons. One would be the approach that they want to take. We will get to that in a bit. But I think that's. That's one reason why they have a shot. But the other is, like you mentioned, they already have operational experience in the african market. So the first time I used Manu was last year. I needed a particular coffee brand I couldn't find in usual stores that I use, and I used them. The promise, I think, was I could get my delivery in about 45 minutes, and I wanted to test it. So placed an order. I thought I had placed another, but it was later on I found out I had nothing. So I kind of placed my order very late, around maybe three, between three and 04:00 p.m. and I did not expect to get it that day because of the timing, but I did. I got it around 08:00 p.m. which, to be fair, it's not 45 minutes, but any other person would have probably said, your order will come the next day. But they delivered on that day, and from some of the conversations I've seen around, they seem very efficient when it comes to like delivery times. And with food delivery, I think apart from me being able to get my food when I want it, the speed at which you deliver my food is also very important. I don't want my food coming to us after I have delivered. What if I die of hunger? [00:32:39] Speaker A: Right? If I have not died? But yeah. [00:32:44] Speaker D: With food delivery, like speed is essential. If you do, if you can't guarantee me speed, then we could have issues. So I think mano has a shot just going by that alone. They do. And again, we do not exactly have any clear market winner. Yes, we have people who have a significant share of the market, but we do not have a clear market winner. So anyone coming in now would have a short. I mean, maybe if you review it in a, in a month or in a year or two, you now find out whether you're still alive. But at this point, at this moment in time, 1023 on Thursday, you do. [00:33:24] Speaker A: Have a shot, right. For people that like have no idea what our manual works, right? It's just like they aggregate like super supermarket supermarkets or malls that sell stuff on their platform. And then you go there, look for what you're looking for, place another, pay for it, then they deliver, they bring it as if you're sending somebody on a grocery shopping, you're sending them to the market to get something for you. That's the way it works. So I feel that that model, if extended into food delivery with them aggregating like stores that are close to like hot spots, like places that people would ordinarily order food, like maybe unilateria or ikeja. So like you just like focus on those kind of places that people ordinarily patronize, right? And there's a comment that came up in the announcement that they made and I'm going to read that out now. It seems like it has a lot of things to do with. A lot of things to do with the model they are eventually going to run. And there is the comment, if we have 1000 customers, we want to nurture them and ensure they have all they need. And it speaks to something like, like, it's like they want to, like we are not going for like a number, a large number. We just feel like the few we can get, we are able to save them like individuals. So what does that statement like, how does it speak to the kind of model they probably run with this food delivery thing they want to start doing? [00:35:12] Speaker D: Okay, so I think it's a. What it just tells you is that the focus for them isn't growth at all costs or rapid growth. That's not the focus. And it makes perfect sense. The reason is, yes, I said you have a short, but your market is not exactly very large. Food inflation right now is, I think, above 35% in Nigeria. [00:35:37] Speaker A: And that's the real measure of inflation. [00:35:40] Speaker D: Yeah, well, I mean, some people would dispute that, but we have sky high food inflation on one hand. You also have a situation where Nigerians are spending. The average Nigerian spends, I think, about 60% of their annual income of food, which leaves very little room for, I mean, luxury. And if you are being honest, yeah, food deliveries sort of luxury. It's not something that. It's not something that maybe a family of four, like, I don't know, it's not something a father who earns a 150,000 error would consider careful every day for his kids. Right. So it's luxury for the most part. So your market isn't that large as you, as you would wish. So deciding that I want to target a segment of the market and then serve them, make sure that they are very happy that they do, they think twice before switching to another person is a perfect strategy. And just in addition to the, like, food delivery not necessarily being an essential need, there's also the fact that I'm beginning to lose my train of thoughts here. [00:36:58] Speaker A: But, yeah, while you find your train of thoughts, you know, Mano is coming to a market where child deck has a lot of clout. That means you're not just trying to get new customers, you're trying to take customers from. From one that has established its voice in this space. So possibly. Yeah, yeah. Yes. People still use Jumia food. People use chow deck and all. But yes, the market, as small as it is, as current players, and you are coming into it. So if you'd want to, like, recommend or just take a shot as a guess at what Mano can bring that can get you if you're a child egg or a Jumia user. Jumia Food user. What Manu can do to get you on his side, what they can do. [00:37:53] Speaker D: Just make sure my food gets very. Gets to me very quickly. [00:37:57] Speaker A: So they have to beat delivery times for. [00:38:01] Speaker D: I don't know if you should beat delivery times. So I remembered what I was going to say earlier. So one major problem with food delivery is the margins. It's very thin, and if you decide to serve a very large. If you want to go after a very large customer base, what I would often mean is you're offering incentives to get them on board. Right. So you're either spending huge on marketing and that marketing may not always translate to actual revenue from the customer. I wonder what the average revenue per user for the average food grocery delivery brand in Nigeria is. It could be high. But when you consider that in terms of your customer acquisition cost and juxtapose that, I suspect it doesn't tell a very, very interesting story. And I have the suspicion that mano has been in this food delivery market before in Nigeria. Yes, but don't take my word for it, except they agree to confirm it. Boy, I think that margin being very thin makes sense for them or makes sense for their approach because if you have 100,000 people, yes, you would. The assumption is that with scale you have the achieve economies of scale and then you kind of cut down on your costs. But that may not always be the case. Right. So to your question, what can they do? There are a few things and I think they've already outlined some of them. One is that they mentioned that, yes, there are like larger players in that particular space, but you have issues with customer refunds when your food. I mean, we experienced something similar yesterday, not with the food delivery product, but someone in that space. Right. Customer refund takes time for some people whose name I would not be naming. There's also the fact that others can be mixed up, which kind of speaks to the customer service. And then there's also, what do you call it now? Delayed food. Like having your food come hours after which almost everybody has had similar challenges. And I suspect it's also because they have not like, they've scaled very quickly and of course those are like common, common problems. So, yeah, if they can fix those issues, ensure that they are growing maybe not slowly, but growing appropriately. Like, don't be too quick to scale. Only serve people that you know that the revenue from what they are bringing in is like, it's commensurate with what you're spending to acquire them, then, yeah, it makes sense. And I mean, I think Manu hasn't, I don't know that they've raised a lot of money. So that's something to also be cautious about. So, yeah, I think if they can. [00:40:49] Speaker A: They'Re probably going to grow slow and attend to this pain point that customers have. It's usually don't like over promise, the 45 minutes, 15 minutes delivery under promise. [00:41:01] Speaker D: And over and over deliver might be a better thing. And to be fair, I think they will have a good chance. Really, that efficiency, it looks like they. [00:41:08] Speaker A: Already have efficiency with grocery shopping. [00:41:10] Speaker D: Yes. So food is a different business, but I think they can still, like, take some of the learnings from that. [00:41:17] Speaker A: Okay. Yeah, that's the thing I was trying to. Yes. If you're entering into a new market, you must be ready to, like, look for a pain point that customers, because even if you don't want customers to use your products at first, once you're new, they want to try you, which. [00:41:35] Speaker D: I don't even want customers. [00:41:37] Speaker A: No, no, no. I'm trying to say that if you don't want to go in and try to acquire customer a lot, for instance, customers who still want that already useful delivery, they still want to use your products to see whether this is good than what I'm using, especially if the other one is problematic, you get. So they should be able to solve that, attack that pain points, and that will help them to retain new customers. And we look out for how mano progresses in this new market it has entered. So thank you for joining us once again on this episode of Tech Points Africa podcast. We hope that you've been educated, enlightened from our conversations today. Don't forget to send us your feedback on any of our social media platforms. Twitter, Instagram, Facebook. You can also send us an email at podcastechpoint Africa. Podcast at Techpoint Africa. I'm happy to tell you that a lot of things happened this week, and I don't want you to miss out on them. So you can go to Techpoint Africa to catch up on everything that happened in the african tech space this week. Thank you for joining us again, and I'll catch you in the next one. Bye bye. Bye.

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