Issue #12. Logistics in Côte d'Ivoire & Global Sports Consumption
Exploring a Côte d'Ivoire company's approach to improving logistics efficiency, and examining global fan preferences in consuming games.
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Company of the Week: Kamtar
At $1,900 GDP per capita, West Africa is one of the world's poorest regions. It faces severe economic challenges, health issues, and limited access to basic necessities, despite some progress.
The region's economic underdevelopment is evident in its infrastructure, particularly in transportation and logistics. The 5.1 million square kilometers area has under 50,000 km of paved roads, less than Slovakia, which is 100 times smaller. Another issue is the scarcity of transportation vehicles. Benin, for instance, has as many trucks as Malta, despite being 26 times larger in population. Similarly, Togo has fewer trucks than Bahrain but is six times larger. These limitations result in restricted intra-regional trade and higher logistics costs.
However, Côte d'Ivoire stands out in the region. It's the wealthiest West African country and boasts 545,000 commercial vehicles traveling on 10,000 km of paved roads, the most in the region. This infrastructure sets the stage for quality logistics, as seen with Kamtar, a local company making strides in this area. Although there’s room to grow, it sets the stage for improved logistics, as seen with Kamtar, a local company making strides in this area.
The company and the business
Kamtar connects logistics operators with consignors like manufacturers or construction companies, streamlining delivery operations by eliminating intermediaries and increasing transparency.
Each vehicle is equipped with sensors for cargo tracking. Orders can be placed and paid through their website or app, where users specify details and are matched with a driver. While Kamtar positions itself as a logistics operator, it offers a range of vehicles, from dumpster trucks to forklifts.
Kamtar is a closed marketplace platform, à la Uber, and so it offers the same advantages:
It's asset-light, owning no vehicles.
Customers and drivers can't bypass the platform for direct transactions.
Network effects: more drivers attract more customers, which in turn attracts more drivers.
Kamtar not only connects logistics operators with consignors but also offers additional benefits to its customers. First, it provides essential driver training, including lessons on punctuality and politeness. Come to think of it, every employer should provide such training, regardless of the industry. But that’s beside the point. Secondly, Kamtar insures the goods transported by its operators, offering peace of mind to customers.
The numbers
Kamtar makes money on commission, charging between 10% and 30% for each delivery. Some back of the envelope math suggests that the average delivery costs €45, from which Kamtar makes around €9. Since its inception in 2018, Kamtar has grown to operate 8,000 trucks and claims to have the largest vehicle fleet in West Africa as of 2020.
While Kamtar does not publicly disclose its revenue, we can make educated guesses. In 2018, the company aimed for 10,000 deliveries, with 1,000 drivers on the platform, indicating about 10 deliveries per driver. Now, with 8,000 drivers and an average commission of €9, Kamtar’s estimated revenue stands at approximately €720,000.
The funding
Kamtar has secured funding in the range of $3.5 to $4.5 million. The most significant round occurred in 2021, with investments ranging from $2.8 million to $3.5 million, contributed by Sendy and Toyota Tsusho Corporation. Sendy, a Kenyan logistics startup, actually shut down in August 2023. Toyota Tsusho Corporation is a trading company and part of the Toyota Group. This funding is expected to enable Kamtar's expansion into other West African countries, with plans to launch operations in Benin soon.
The future
One of the key tailwinds for Kamtar is the African Continental Free Trade Area (AfCFTA), which took effect in 2019. By 2035, it's estimated that AfCFTA could increase intra-African trade by 81%, reaching $532 billion. And judging by the Toyota Tsusho Corporation’s press release, it’s the reason why they invested in the company. Otherwise, they wouldn’t be mentioning it in literally the first paragraph.
Another growth lever has to do with ecommerce platforms that are expanding in the region. Wasoko, a Kenyan B2B company connecting retailers and manufacturers, has entered Senegal and Côte d'Ivoire, its first markets in West Africa. Chari, also a B2B operator, is entering the Senegal market with plans to launch in other French-speaking nations too.
But there seem to be some bumps in the road. Although the company had plans to expand to other West African countries since 2020, it has yet to do so. With the demise of Sendy, Kamtar’s main investor, we’ll see what the future holds.
Random Story of the Week: Sports Consumption Around the World
67% of global consumers follow sports regularly. Some estimates suggest that 3.5 billion people are football fans alone. While love for football is nearly universal, how people consume it, or any other sport, varies worldwide, largely influenced by technology.
Let’s start with two general divides.
First, while 51% of global fans prefer to watch sports on live TV, in Asia, consumers lean towards social media. This divide is stark when considering outliers: 68% in the UK prefer TV, but only 39% in China do. In India and Indonesia, nearly half of consumers primarily use social media for sports, compared to just 20% in France.
Second, is the choice between watching entire games or settling for clips and highlights. Over 40% of consumers in Europe and North America prefer full games, while in Asia, there's more balance between the two options.
As you might’ve guessed, the preferred mediums and parts of the game people like to watch are closely linked. There’s a 0.95 correlation between watching sports on live TV and preferring full games, and a 0.65 correlation between social media consumption and a preference for clips.
Now let’s try and explain this consumption divergence.
Now, let's delve into the reasons behind these consumption patterns:
1. Device Preferences: The divergence in media consumption is influenced by device preferences. TV penetration in India and Indonesia is lower than in Europe or the US, at 72% and 92% respectively, but still high enough for TV to be the preferred medium. However, people in Indonesia, India, and Mexico spend over 55% of their internet time on mobile, compared to under 50% in Germany, France, and the UK. Time spent on social media also varies significantly, with the former group averaging over 2:50 hours and the latter under 2:20 hours. Hence, more mobile usage correlates with increased sports consumption on social media and not device ownership as such.
2. Disposable Income: The wage gap between countries like India and Indonesia and the US is larger than the difference in cable prices, making cable packages less affordable. In India, despite channel subscriptions, the cost discrepancy remains substantial.
3. Differences in Broadcasting Rights: Live sports are a significant reason some people haven't yet cut the cord. In the US, for instance, NFL games average 16.7 million TV viewers. Although the rights to broadcast these games are complex, all Sunday games (the primary day for NFL games) are broadcast by Fox. Compare this to India and the IPL (Indian Premier League), where Star Sports holds broadcasting rights, but JioCinema offers streaming rights and streams games for free! This strategy was so impactful that JioCinema experienced a 20% drop in viewership after the IPL season. In Germany, the majority of Bundesliga games belong to Sky, with about 7-8 million subscribed households1. As a result, 41% of Indians stream sports online, compared to less than 20% in Germany.
4. Working Hours: In countries like Mexico, India, and Indonesia, people work over 2,000 hours per year, averaging about 5.5 hours per day. Europeans, in contrast, work between 4-4.5 hours daily. With less free time available, people in the developing world spend less time watching TV and more often consume games in clips on social media.
5. Mobile Data Prices: In most developing countries, 1GB of mobile data is available for under $0.3. While this might not suffice for watching an entire game, it's enough for highlights. Additionally, fractional plans are common in Asia. For example, Zong in Pakistan offers a 1-hour YouTube plan for just $0.007, allowing fans to watch clips even after exhausting their main data plan.
6. Cultural Tendencies: Though it may be speculative, countries like India, Indonesia, and Mexico are largely collectivist societies. This might influence a greater tendency towards communal activities, including discussing live games on social media. While this also occurs in more individualistic societies such as the US, it may not be as prevalent.
The current era of sports consumption is indeed unique. The shift in mediums (from cable TV to OTT and social media platforms) and devices (from traditional TVs and PCs to VR) is reshaping how fans engage with sports. It appears that watching games via cable TV as the primary method of sports consumption is becoming a relic of the past.
Last subscriber data is for 2018. Even if we assume a 3% churn starting from 8.2 million in 2018, it would still be 7 million.