Tex­ting for Cheaper Food with Soko text

Southern Innovator - - WASTE & RECYCLING -

Grad­u­ate stu­dent so­cial en­trepreneurs from the Lon­don School of Eco­nom­ics (LSE) are pi­o­neer­ing a way to re­duce food prices in Kenya us­ing mo­bile phones.

An­swer­ing a call to ac­tion to ad­dress global food in­se­cu­rity by the Hult Prize, the team looked at how they could make food cheaper for ur­ban slum dwellers.

The Hult Prize is a start-up ac­cel­er­a­tor for bud­ding young so­cia­len­trepreneurse­merg­ingfromthe­world’suni­ver­si­ties. The win­ner re­ceives Us$1mil­lion and men­tor­ship to make her/his idea be­come real.

The in­ter­ested re­tail­ers would be re­quired to send us an SMS ev­ery evening de­tail­ing what they need

Soko­text uses short mes­sage ser­vice (SMS) mes­sages from mo­bile phones to em­power veg­etable sellers and kiosk own­ers in slums when it comes to bar­gain­ing the price for whole­sale fresh pro­duce. It makes it pos­si­ble for them to ben­e­fit from bulk prices by pool­ing all their or­ders ev­ery day. Usu­ally the ven­dors lack the funds to buy in bulk and have to make nu­mer­ous time-con­sum­ing trips to the cen­tre of Nairobi to buy stock.

Soko­text re­duces the price of fresh pro­duce by 20 per cent for kiosk own­ers by buy­ing the pro­duce ear­lier in the sup­ply chain. Soko­text then de­liv­ers the food to a whole­sale out­let at the en­trance to the slum.

This ap­proach makes avail­able a wider range of pro­duce and re­duces the price. And best of all, it will knock down prices for the poor­est peo­ple and en­able them to buy more and bet­ter-qual­ity food.

The team mem­bers be­hind Soko­text are from a va­ri­ety of coun­tries: Canada, Colom­bia, Ger­many, Kenya and the United King­dom.

Hatched at the LSE, the en­ter­prise pro­to­typed its ser­vice in Mathare Val­ley, Nairobi, Kenya, for four weeks dur­ing the sum­mer of 2013. They started with 27 users of the ser­vice and be­gan the sec­ond phase of test­ing in Novem­ber 2013; they are work­ing with a lo­cal NGO, Com­mu­nity Trans­form­ers. Ac­cord­ing to Soko­text, slum dwellers are spend­ing 60 per cent of their daily bud­get on food.

Mo­bile phones are a good choice since they are now a com­mon com­mu­ni­ca­tions tool, even in slums.

On their web­site, Erik Hers­man, the re­spected blog­ger and com­men­ta­tor on tech­nol­ogy in Africa, said of Soko­text that it “rep­re­sents a fan­tas­tic low-tech ap­proach that could re­ally scale for de­creas­ing the in­ef­fi­cien­cies in ur­ban slum mar­kets.”

Telling the blog 140fri­day.com, 21-year-old co-founder and Chief Ex­ec­u­tive Of­fi­cer of Soko­text Su­raj Gudka ex­plained: “From our re­search, the Mama Mbo­gas [smallscale veg­etable re­tail­ers] spend be­tween 150-200 K Sh [Kenyan shillings] [US$1.70 to US$2.30] daily, about 25 per cent of their rev­enue, to buy their stock, and since they do not buy in bulk, they get their goods at a higher price.”

Get­ting the mar­ket traders to co­op­er­ate is very dif­fi­cult, Gudka found, be­cause com­pe­ti­tion is fierce and trust is low. Soko­text sees it­self as a so­lu­tion to this sit­u­a­tion.

It gath­ers to­gether all the or­ders from the traders us­ing SMS text mes­sag­ing and then buys the goods in bulk at a much cheaper price.

“To use our ser­vice, the in­ter­ested re­tail­ers would be re­quired to send us an SMS ev­ery evening de­tail­ing what they need,” ac­cord­ing to Gudka, “and then we will source the pro­duce and they come pick it up from us the next morn­ing. In this way, they do not have to in­cur the ad­di­tional costs of trans­port­ing their goods and it also saves them time.”

Soko­text is be­ing in­cu­bated at the Nailab in Nairobi, a start-up ac­cel­er­a­tor that of­fers a three-to-12 month entrepreneurship pro­gramme, with a fo­cus on grow­ing in­no­va­tive tech­nol­ogy-driven ideas. Soko­text’s sum­mer pi­lot test con­firmed that tak­ing the or­ders can work but found that get­ting the prod­uct to the mar­ket in time was dif­fi­cult.

The next step will be to set up a pres­ence in the Mathare slum: “We will be selling about seven to 10 dif­fer­ent kinds of pro­duce, and from our cal­cu­la­tions, ac­cord­ing to our pro­jec­tions for how much the Mama Mbo­gas buy ev­ery day, we hope to get 40-50 cus­tomers within three months.”

The Soko­text web­site (soko­text.com).

Su­raj Gudka (above), the 21-year-old co-founder and Chief Ex­ec­u­tive

Of­fi­cer of Soko­text.

Soko­text co-founder Sofia Zab (left). She over­sees Soko­text’s mar­ket­ing strat­egy and man­ages Soko­text’s tech­nol­ogy prod­ucts. • soko­text.com • nailab.co.ke • hult­prize.org • whiteafrican.com/about

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