Online grocery and delivery platform Zulzi has embarked on an aggressive expansion plan that entails adding pharmacies and fintech to its services, and setting up shop outside Gauteng.
Started in 2013 by Vutlharhi Donald Valoyi as an e-commerce platform selling and delivering books, electronic gadgets and later clothing, Zulzi morphed into a grocery delivery service around 2016 as a marketplace for consumers to order from retailers such as Pick n Pay, Woolworths and Dis-Chem, with deliveries within an hour. That gave the company exposure and insight into in-demand grocery items.
“We see the biggest growth in pharmaceuticals, where we want to offer comprehensive products and services,” said the entrepreneur.
“We are onboarding independent pharmacies to our platform and over time the offer will introduce medical consultations, where we connect customers with doctors,” Valoyi added.
Zulzi has introduced a feature on its app where customers are able to upload doctors' scripts and pay using medical aids.
Zulzi is also adding financial services products, including instant loans and peer-to-peer lending. The former will enable customers to pay for their groceries and medicine in the event card payments cannot be processed.
“We are going big on fintech. We want our customers to be able to pay with Zulzi wallet everywhere they go,” Valoyi said.
The plan is to enable customers who have opened such a wallet to use the money they receive from refunds, credit, loans and payback from peer-to-peer lending to pay bills.
Valoyi said Zulzi is looking at raising more money this year to fund its expansion, but did not divulge how much. Three years ago it raised R30m, which enabled the group to open dark (warehouse) stores to improve delivery time. Valoyi said Zulzi is the fastest grocery delivery service, with more than 95% of orders delivered in 15 to 20 minutes.
The platform also offers exposure to entrepreneurs who don’t have shelf space at major retailers
The company has five dark stores in Johannesburg and two in Pretoria. It will open more in Durban and Cape Town in the next two months.
While being an aggregator gave Zulzi exposure, it did not have control over the availability of products and margins were small. Opening warehouses has boosted the company’s growth, enabling Zulzi to operate for extended periods compared with retailers and improve delivery times from one hour to 15 minutes.
“That and the fact that we offer a comprehensive mix of products is what differentiates us from competitors. You can't find medication on other platforms,” he said.
About 2% of deliveries take an hour because, among other things, there may not be enough drivers on a day or orders are substantial.
The warehouses stock basics, from detergents, beauty products, baby food and nappies to alcoholic and soft drinks, meat, vegetables, fruits and prepared frozen meals. Every dark store employs 20 people, while the Paulshof store also has a pharmacy.
Valoyi said Zulzi processes more than 1,500 deliveries a day. The platform also offers exposure to entrepreneurs who don’t have shelf space at major retailers, he said.
“Not only do we procure from them, we also promote them on our app to give them exposure so customers can buy directly from them. That, to me, is critical,” he said.
Asked which items feature in most baskets, Valoyi said in the first quarter of the year it ranged from bread, water, ice, alcohol and cold drinks to beans and avocados. He said Zulzi customers are mostly women, but its male clients are increasing.
Valoyi, who worked as a software developer at companies such as Telkom and FNB, said operating in the grocery delivery industry is complex.
“We had to put in a lot of money to get to where we are now. We still need more to scale further. We get people asking us for help ... as there are not a lot of guys who can build systems.”
Valoyi and his team of software developers built the Checkers Sixty60 delivery platform. “There is a team of developers who continue to run it,” he added.
Next year, Zulzi is set to launch in smaller cities such as Mbombela and Polokwane.
The grocery delivery industry has grown substantially over the past three years, boosted by the pandemic. Major retailers have launched their own platforms or partnered with existing delivery companies to offer convenience to customers, and UberEats has added grocery delivery to its offering.
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