Egypts e-commerce delivery market sees some 250 million packages delivered per year. However, most last-mile delivery services have only recently started to cater to the countrys growing e-commerce retailers on an ad-hoc basis as an afterthought from their native B2B operations.

Arab Finance sat down with Samer Gharaibeh, CEO and Founder of Mylerz, to discuss how their unique take on last-mile delivery fits within the greater context of Egypts growing FinTech and e-commerce industries, and how Mylerzs data-driven services empower merchants, using the companys homegrown platform that they built from scratch.

Can you tell us a bit about Mylerz? How/when did you decide to launch the company? And whats the story behind the name?

Ive been working in the logistics and last-mile delivery industry for about the last 22 years. I started off with the first generation of people at Aramex and came to Egypt back in 1999 with the ambition to grow Aramex into a true global company and international brand via the acquisition of a local partner. After completing the launch in Egypt, I was responsible for further expansion into the African market, and I personally stepped in around 30 African countries. We launched operations between greenfield projects and acquisitions in around 22 countries in Africa. So, in a nutshell, thats where my experience stems from in the logistics and last-mile delivery industry over the last 22 years or so.

In early 2019, I saw a big opportunity in the last-mile delivery sector with what was happening in the industry, specifically with respect to vertical logistics, which is not just growing quite fast, but rather becoming a necessity now, especially with the COVID-19 pandemic in the backdrop.

We launched Mylerz in November 2019, a few months before the pandemic. When the pandemic reached its peak, we found that our volumes started to shoot up dramatically, and we had to move very fast to fulfill or to improve or to stretch our capacity to serve the new business.

Before that, it was nice to do online shopping, but then with the pandemic, it became somewhat crucial. Suddenly, there is a need for somebody to get something from somewhere efficiently and fast. So while the pandemic was and still is a bad thing, it fueled an opportunity for us.

As for our name, while others may call them couriers, our dedicated team of delivery personnel take all the packages handled by us directly to the recipients right to the very last mile. Thats why we call them Mylerz.

We think branding is important and we wanted a name that captures the essence of what we do, the core of our vision, while at the same time focusing on the point of contact, the Mylerz, that go from merchant to recipients.

Why focus on e-commerce?

I was a very spoiled corporate director at Aramex and was very comfortable with my career, but I saw an even bigger opportunity here with what was happening with the Financial Technology (FinTech) startup ecosystem, and I said, "I want to dance on the floor instead of watching people dancing from the sidelines." I wanted to do something that was very specialized within the realm of e-commerce, unlike traditional logistics that are B2B platforms that were built to cater to B2B and then added e-commerce later or had to reshuffle their models to serve e-commerce. Last-mile delivery for e-commerce is totally different from last-mile delivery for a B2B package, in my opinion.

When you deliver a B2B package, there's always somebody available from nine to five to check for and receive the package, and there typically isnt cash on delivery (COD). There arent typically any payment complications or somebody who isnt available to receive the package. Its much more cut and dry, unlike our e-commerce platform, where we need to make sure that recipients are at home or their specified delivery location at that time, and we need to ensure that they have the cash to pay COD because some 80% of online purchases today in Egypt are cash based.

B2C or e-commerce last-mile delivery is a much different animal than B2B, but we believe that by developing the right technology and leveraging on my experience we could serve the exact needs of both the merchant and the recipient via our platform.

This is why we built Mylerz from the bottom up, unlike much of our competition, which either has an existing logistics operations that they shuffled around to add services that arent really truly tailored for e-commerce, but rather just added on an ad-hoc basis, or others that use white-label, off-the-shelf, or even outsourced solutions that do not really offer any value added to their clients or provide them with the data, statistics, and insight that we offer.

This is what differentiates us. Mylerz uses advanced, state-of-the-art technology to empower merchants and provide the best services to both the seller and buyer through the e-commerce transaction cycle.

How much of an investment was needed to get Mylerz up and running?

Our capital today according to our commercial registration is EGP 20 million. We are a fully self financed company, but we are now at a stage where we are seeking to raise additional financing and looking at several options, including at strategic VCs, to shift the company to the next level.

Lets talk about Mylerzs solution to last-mile delivery services please. What makes Mylerz so special?

Our strength is in our technological foundation. As I said earlier, we built our platform from the ground up specifically to create transparency and leverage on all the data we have access to, which ultimately allows us to better service our clients, who are mainly those in e-commerce.

From the moment our clients sign up, they have access to their individual account dashboards. This dashboard provides them with a birds eye view of all their shipments as well as detailed real-time information and trends on their shipment destinations. Our clients can directly integrate with various popular and well-used e-commerce sales platforms, meaning our clients can see how much of their products theyve sold, how much is to be collected in COD or alternative payments, what locations their shipments are going to, what time most buyers in particular locations are receiving their shipments, why certain shipments are being rejected and/or refunded, and significantly more data to help them assess how to focus their marketing and customer service efforts to avoid refunds or to upsell their products.

As for our recipients, they can coordinate their pickup times and send us the exact location where they would like to receive their delivery all via WhatsApp.

All this data provides our clients with very detailed, step-by-step access to the lifecycle of the delivery because each step of the delivery process is logged, whether via automation, the intended recipient, or the Mylerz conducting the delivery.

Because of our platform, our prepaid package delivery rate, meaning buyers who already paid online prior to delivery, stands at 99.6%. For COD, our delivery rate is at over 90%, which is significantly higher than todays industry average of 82%84%. Why? Its directly because our technology is built to suit the operation and to enable us to monitor each step, which helps us and our clients pinpoint the problem or obstacle and ultimately jump it or eliminate it entirely.

Our Mylerz are also basically a moving wallet. Because of our COD collections, we are able to deliver instant cash refund services on behalf of our merchants, and we are among the very, very few that can offer this. Basically this allows us to process cash refunds on behalf of our merchant clients by immediately collecting the refunded product and instantly refunding the cash to the refunding buyer. Meanwhile, our competitors would have to return the refunded product back to the merchant, collect the refunded cash from the merchant, then deliver it back to the buyer. We are able to cut out this entire process and process instant refunds.

Our platform also enables us on behalf of our clients, who are again merchants, to accept credit card payment on arrival as well as payment from e-wallets.

We can basically process nearly any type of payment on behalf of our client, and we can process instant refunds for the package recipients. That means we can virtually bring the merchant right to the buyers doorstep.

Ultimately our strength is in our technology and our people. We can always cater to the needs of our clients by developing and enhancing our platform, and we can also leverage on our Mylerz who are always located strategically everywhere around the country as dictated by business needs.

How many employees do you have? How big is your fleet? Do you have your own fleet and staff, or do you outsource to another entity?

We are well over 300 employees across the firm, with over 200 of us being the Mylerz who conduct the delivery. The rest of us work here at our HQ, from our IT teams to administration to human resources, etc. But because we are still in the growth phase, every month is different as we expand our team every month.

We have 17 hubs strategically located around the country, and we have over 200 delivery tools" ranging bicycles to motorbikes to trucks to jumbo 8-tonners for hauls across governorates.

Our Mylerz are all company employees, complete with social security and medical coverage. We train our staff, who proudly wear their uniforms, drive our branded vehicles, and provide meticulous customer service.

We did not really pursue an outsourced/crowdsourced model because then our customers could have one point of contact today and an entirely different one tomorrow. How can we ensure our great customer service if cannot guarantee or have no control over who will be making the delivery?

Our biggest edge is in the technology platform that we built from the ground up, so it was equally important to us to have our team fully trained on how to best use this technology, meaning our staff had to be true Mylerz from the get go.

We have a particular company culture so by hiring our own staff, we are able to ensure that our entire team is part of our vision and values of ensuring our customers receive the absolute best service we can deliver.

Lets talk about the market in general. How much do Egyptians use logistical services?

I would say there are two markets, the organized market and the social/informal market, which together make around 250 million packages per year.

The organized market, if we phrase it that way, consists of registered merchants and stands at around 100 million packages per year, representing about 40% of the total market.

The other market, which consists of social sellers (those with Facebook pages, for example), accounts for around 60% of the total shipping market.

E-commerce is on an exponential growth trajectory, so there certainly is demand for better shipping services.

Is there a difference in how organized and social clients use your services?

We aim to provide all our customers with the same great quality of service, but theyre different in terms of their demand. Social sellers want to deliver the package and may not necessarily be concerned with customer experience. They want to sell their products and collect their cash, so they may not necessarily be looking to create brand loyalty. A social seller on one Facebook page today could sell on another page tomorrow or under a different name on an entirely different platform.

Meanwhile, the organized market tends to comprise businesses that do want to generate brand loyalty, so to them the entire customer experience is very important. They are more likely to use our full suite of services to gain more insight and look at trends that help them make better business decisions.

Can we talk about the companys growth and performance? How much do you collect per delivery, on average?

Mylerz processed in 12 months around 1 million packages. So we are definitely heading in the right direction, and we are very ambitious about our growth prospects. Since inception, weve been growing 30%40% Q-o-Q, and I am confident and hopeful we can continue this trend.

Weve managed to collect now well over EGP 500 million in COD, and weve exceeded 100,000 packages per month, but again we are in an aggressive growth stage, so every month is different.

We collect around EGP350EGP400 per COD transaction, though thats a flat average across various e-commerce industries so it might not be very meaningful. For example, we could collect over EGP10,000 for a computer, EGP5,000 for a smartphone, or EGP250 for an article of clothing.

Why do Egyptians prefer to pay COD? Whats your outlook on the future of online payments?

Credit card penetration rates in Egypt are still low, and I think there is a general distrust between buyers and sellers, though this is definitely improving with time.

Right now, I would say the split is around 80/20 (80% COD, 20% online or digital payments), but I think this rate is improving by five percentage points every year in favor of digital payments.

That said, FinTech payment solutions are really picking up, and our Mylerz are equipped to receive nearly every kind of digital payment, including mobile wallet QR codes.

I think new FinTech solutions make a lot of sense. By facilitating and financing customer spending with a solution like valU by EFG Hermes Finance, for instance, you are also increasing the average customer shopping basket. We are actually in the process of working with micro financing companies. By facilitating and also digitizing the payment and collection process, we would effectively shorten the cash cycle for our merchants, meaning they can collect cash sooner and use that to re-invest in and grow their businesses.

As a company that depends on cash collection, how do ensure safety and security?

Well, to put it bluntly, it would be a nightmare without having our operations processes down pat. Each of our Mylerz could be collecting upward of EGP 30,000 everyday, and accidents and incidents do happen, so of course we have insurance. Our Mylerz are insured, our transactions are insured, our delivery vehicles are insured, and thats aside from medical insurance coverage in case of accidents. Our hubs are also insured because the hubs themselves could carry significantly more cash.

What insight can you shed on e-commerce in a post-COVID reality? Can you share trends about consumer behavior with regard to retail shopping (online vs brick and mortar)?

For the last 15 years, the last mile delivery industry has been growing a solid 25% Y-o-Y. During 2020, that div skyrocketed to 80% directly because of the COVID-19 pandemic. The pandemic channeled disposable income that would have otherwise been allocated to travel or other out-of-home expenses.

That said, I believe that in a post-COVID world, that div will not drop back down to 25% but likely hover at around 60%.

The convenience of e-commerce combined with rising smartphone, tablet, and computer penetration rates across generations and demographics will just become the new norm. So while COVID did push the adoption of e-commerce, this is something that would have just become reality regardless of the pandemic.

What do CAPEX and OPEX look like for a company like Mylerz?

Our biggest expenses are salaries at around 70%. The next biggest expense, of course, is delivery costs.

The thing is we launched Mylerz as a socially and environmentally responsible startup. Our vehicles operate on compressed natural gas (CNG). So while the upfront cost for our vehicles are more expensive, the fuel cost is less than conventional vehicles. More importantly, these vehicles produce less carbon emissions.

Our packing materials are also biodegradable, which is more expensive than the typical materials used in this industry. We could have used conventional materials, which are easier to source and scale, but we opted to reduce our carbon footprint and use less plastic.

Aside from being environmentally aware, what other CSR activities does Mylerz engage in?

We partnered with UNICEF and are involved in projects focused on youth empowerment. We are actually involved in a particular project where we take delinquent juveniles, offer them rehabilitation via training, and hire them as paid interns to provide them with potential career prospects. This keeps them off the street and allows them to learn new skills they can leverage in their future.

We're very excited because none of the other private sector companies have done anything like this, while since our inception weve already seen 8 amazing youth graduate through our program.

This is aside from our traditional internship programs, though we focus on those who come from Upper Egyptian universities.

Can you make forward looking statements about the market? Where do you see your industry in 35 years from now?

According to the statistics available to us, online sales as a percentage of Egypts total retail market stands at around 2.3%. If you look at the same breakdown in China, that stands at over 45%. If you look at the US and Europe, that stands at over 26%. So we have we have 1012 multiples to reach where Europe is today, and 21 to reach where China.

Online sales in Egypt are growing at an accelerating pace, so I expect our percentage of online sales will likely accelerate within the coming period because of the internet of things, because of the exposure, because of globalization, global shipping efficiencies, and also because the market is just inherently interesting.

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