Saudi startup aims to overtake leaders in last-mile delivery market
The global boom in electronic commerce, further boosted due to the coronavirus disease (COVID-19) pandemic, has resulted in a dramatic increase in the number of parcels delivered each day.
Customer expectations for speedy fulfillment have also been rising, leaving companies to grapple with multiple, last-mile delivery challenges.
Last-mile delivery is the most expensive and timeconsuming part of the shipping process and most e-commerce retailers in Saudi Arabia struggle with it. Delays, reduced success rate, and difficulty handling cash on delivery (COD), are among the many obstacles faced by the sector.
However, one Jeddah-based startup claims to have solutions to the problem.
Saee is a Saudi tech-logistical, last-mile delivery company aiming to introduce a new concept into the local market. The startup helps to facilitate higher success rates and improve profit margins for companies and individuals, while alleviating the need for costly overheads such as cars and couriers. “The most important things that retail, e-commerce clients expect from last-mile shipping companies is a high success rate, and rapid refunds,” Saee co-founder Tariq Alturkestani told Arab News.
Saee was founded with the support of King Abdullah University of Science and Technology (KAUST) to be the local solution for Saudi e-commerce platforms. It offers specialized services designed to meet retailers’ needs, such as guaranteed fast COD consolidation, and the facilitation of smart, flexible dispatch to freelancers, active customer service, and warehouse management. “I believe that e-commerce has a big dilemma called cash on delivery,” Saee co-founder Eihab Nassier told Arab News. “The end-user or the buyer is not obligated to take whatever they picked from the internet. “Accordingly, the success rate for the shipments is 70 percent, since only seven out of 10 shipments get received by clients. This means that e-commerce retailers are enduring about 30 percent of the cost with no actual revenue.”
The other side of the COD problem is slow cash flow, especially for small- and medium-sized enterprises (SMEs).
“As an e-commerce platform, the cycle means that I should send the shipment and get it delivered and then collect the money, transfer it, and then deposit it into my account which takes anywhere from 10 to 20 days. So, we’re talking about a cash gap of 20 days in the best-case scenario. But it often reaches three months,” said Nassier.
One of the solutions that Saee is offering for the problem is the concept of cash before delivery (CBD). “We give the clients the cash before the shipment is delivered with a very small percentage just to endure the cost,” he added.
“We do a transfer every week for our clients, and we have dedicated teams as well as an in-house developed technology to give our clients updated reports constantly.” Saee delivers last-mile shipments in more than 120 cities and towns using 13 dispatch centers throughout the Kingdom and is working on expanding its reach further. “By the end of this year, we hope to be covering the entire Kingdom,” said Alturkestani.
Another factor that distinguishes Saee from other companies in the field is its reliance on a fleet of freelancers, which means it only recruits couriers according to demand. According to Alturkestani, the firm’s elastic model and having one of the highest delivery success rates in Saudi Arabia has made major e-commerce companies prefer Saee over other leading courier companies in the Kingdom.
The KAUST partnership with the Saudi Human Resources Development Fund (HRDF) in the 9\10th accelerator program allowed Nassier and Alturkestani to meet and start their collaboration in 2016.
The company first began to reduce the unemployment rate for females in Saudi Arabia by carpooling women to work and was subsidized by the government program Wusool. However, after a royal decree allowed women to drive, Saee gradually pivoted its model and moved to dispatch of e-commerce packages.
Saee began working with big companies in Saudi Arabia and after raising its profile began targeting smaller companies with services that matched their demand. “We just started two service products for small enterprises, even those who have one shipment per month only. We wanted to give them more options and to create an impact,” Nassier said.