Texting for Cheaper Food with Soko text
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