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A new business model in the delivery of goods to the
doorsteps of customers seems to be catching on in
the marketplace of Addis Abeba. Not with food,
flowers, or groceries but with khat, the euphoric
green leaf many in the capital chew regularly.
Indeed, hardly any part of the city is without a
street or a corner where shops are selling it. One
such street is Gabon St, which is among the most
popular for buying khat. Tsegesh Beleche Sales &
Distribution, owned and managed by Tsegaye Gossaye,
29, is located on the ground floor of Jolly
Building, midway along the street, and is one of the
more organised of the few shops on the street that
provide delivery of khat to homes.
The shop is in stark contrast to other khat vendors
situated in small shops, some of which are unkempt,
with leaves and plastic bags scattered all over the
floor. Its setup of counters and shelves gives the
customer the feeling of being in a bakery, if it
were not for the green leaves on display and
accessories such as water bottles and juice on the
shelves.
Motorcycles and bikes used for delivery are lined up
with drivers wearing jackets with the name of the
shop printed on the back and a phone number on the
front.
Tsegaye started the business four years ago, after
attempting various jobs, following graduation with a
bachelor’s degree in business information science
from, at that time, Addis Abeba Commercial College,
now, Addis Abeba University College of Commerce. The
jobs were not as lucrative as he had expected. The
khat business in contrast has been lucrative.
However, it is not an easy job, he claims.
“The freshness of the khat has to be maintained,
otherwise no one will buy it,” he told Fortune.
The demand for it, which is very time-specific, is
catered to through a supply chain that has a
cemented routine from the source to the shops.
Indeed this is central to the business, as the
freshly collected leaves are driven to Addis Abeba
from the various khat growing regions on flatbed
Isuzu trucks at breakneck speed, giving them the
nickname Al-Qaida.
Khat has different names, usually based on the area
where it is grown. Gelemso, Aweday, Wondo, Hirna,
and Beleche come from the eastern part of the
country. Just like all the khat vendors, it is sold
in bundles known as zurbas, which are measured by
the handful at Tsegaye’s. The average price of a
bundle is 60 Br with the cheapest being Wondo khat
selling for 24 Br.
Among the most expensive is Abu Mismar khat, which
is only available seasonally. Depending on the
bundle and the quality, it can cost between 500 Br
and 1,000 Br.
The supply for Addis Abeba gets delivered to a few
locations, after which it is distributed to the
smaller shops. The main distribution centres are in
Saris, Nefas Silk Lafto District, on Debre Zeit Road
and at Sidamo Terra in Mercato, Addis Ketema
District. The quantities delivered get smaller and
smaller as they spread out, ending up at an outlet
for individual shoppers.
Tsegaye started his business at a small shop selling
ten jembs (a bigger bundle of zurbas), delivering to
nearby areas on foot. A jemb holds two to four
zurbas, depending on how big they are.
What started as a small business for Tsegaye has now
grown bigger, including the above location and two
branches in Bole Medhanialem, Bole District, and
Kera, Nefas Silk Lafto District.
With five motorcycles and five bicycles, Tsegaye’s
delivery service covers all corners of the city.
Prices differ with location. Faraway areas like CMC,
Yeka District, and Asrasement Mazoria, Kolfe Keranio
District, cost 50 Br to 60 Br on top of the price of
the khat, while shorter distances cost 30 Br.
Tsegaye claims to have spent 14,000 Br on each
motorbike and 1,400 Br on each bicycle.
The delivery service and the vending is run by 20
employees who take orders through mobile phones and
deliver to the doorsteps of individual customers,
including khat chewing places, where many people
congregate to chew.
Although it is one of the major export earners for
the country, 80pc of the khat produced in Ethiopia
in the 2010/11 fiscal year was consumed locally. The
total production of khat in that year was 203,085tn,
a 74.7pc increase from the previous year, according
to an agricultural sample survey conducted by the
Central Statistical Agency (CSA), published in April
2011. The Ministry of Trade (MoT) reported that only
40,975tn were exported, leaving the remainder for
local consumption.
It is this local demand, which seems to always be on
the rise, Tesgaye caters to. New customers can call
in using one of three phone numbers advertised on
posters. However, once a delivery boy makes the
first delivery to a new customer, that customer
usually calls the phone of that boy so that delivery
directions do not have to be retold. There are 19
different phone numbers supplied to the company’s
delivery boys.
Delivery can be tricky for first-time customers, as
there is no uniform address scheme for the houses
and streets of Addis Abeba.
“It might only be difficult for the initial
delivery,” Tsegaye told Fortune. “It is easier after
that.”
The nature of the business is such that customers
are very picky about the freshness of the khat they
consume by the time they get it. Right after lunch
is a time when many people prefer to have this
euphoric drug, whether they are working or just
chewing it for pleasure. It is also a business where
there is loyalty to a specific vendor; people stick
to them and become regular customers.
Convenience and the fear of being seen shopping for
the khat leaves, which a lot of people consume in
secret, are the main reasons why people chose to
have it delivered instead of shopping directly
themselves.
One of the frequent users of the service is located
around Haya Hulet, Bole District. Although there are
many shops in the area that sell khat, this customer
chooses to buy it from Tsegaye’s, claiming that they
have better khat in addition to their delivery
service.
He has it delivered to the office where he works as
an accountant and chews it quickly before he goes
back to work.
“It helps me focus on my work,” said the accountant,
who claims to have been using khat for the past
seven years. “If I have some time, I go off and chew
properly.”
Tsegaye’s shop is usually crowded, starting at
lunchtime, with telephone orders and people coming
in person to buy. There are also times when the
place is crowded in the morning with people who use
khat to ensure they are alert for the new day.
“Although there are people who come to buy from the
shop, a majority of my stock is sold through
delivery,” Tsegaye, who usually sells off the entire
400 jemb he stocks on an average day, told Fortune.
This model has been very good for Tsegaye. However,
it has its challenges.
“As much as people want the delivery, some customers
complain about the choice of khat we send to them,
as they always feel we hold the better ones at the
shop,” he told Fortune. “But the business in general
is very lucrative.”
This is a business that has picked up pace now, with
many of the shops on the street along Tsegaye
putting up advertisements for delivery service. Many
of the customers of these shops are located in khat
houses which charge people to use a space or a room
to sit and chew.
With this service taking hold as shops become more
organised, the supply chain from the farms to the
customer is getting a lot shorter for those who can
afford it. |
