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    (0) Remittance, Retail & Last mile delivery connection in developing countries


    It is the argument of most that the success of Amazon in the retail space in the U.S. is largely due to the fact that Amazon has successfully figured out and continues to refine the last mile delivery conundrum of getting packages in the hands of customers as quickly as possible. The online grocery business is one of the most competed for and lucrative aspects of the same day package delivery space. Amazon’s purchase of Whole Foods is part of its overall strategy to improve the effectiveness and efficiencies in which it addresses the grocery delivery needs of its customers with the promise of same day, even 1-2-hour delivery guarantees. The result of Amazon’s strategy is that is has significantly disrupted the retail and especially the grocery retail space, particularly in the U.S market.

    Zyleck, founded by an immigrant and someone who has traveled extensively around the world, has extensive knowledge of the remittance space, engineering and technology strength, as well as patented IP and expertise in the transport network mobility space, believes that the retail space in developing countries is poised for disruption and the opportunity is great. This begs the question, what is the connection between remittance, retail and last mile delivery? In answering this question, let’s first address each of these three areas separately, and secondly, let’s look at the intersection of these three areas and the size of the market potential.


    There are numerous studies that have been carried out that considers the use of remittance flows into developing countries around the world. While there are several arguments around what are the primary uses of such funds by the recipients, one thing is very clear, the purchase of groceries/food is one of the primary uses of remittance inflows. Figure 1, (adopted from “In the corridors of remittance Cost and use of remittances in Bangladesh” published by International Labour Organization) shows a break out, in percentages, of the use of remittances by the Bangladeshi migrant households.

    From Figure 1 it can seen that more than 75% of Bangladeshi households use remittance for food purchase. While this one data point from the Bangladeshi studies is not a statistical representation of all developing countries on the use of remittance inflows, one may assume (for purposes of establishing a baseline), that the data is not atypical of what may be found for most developing countries with high remittance inflows relative to their GDP.

    Retail in Developing Countries

    In a Development Policy Perspective paper produced by the German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE) on the subject of “Making Retail Modernization in Developing Countries Inclusive” the following was stated:

    “Ignoring retail modernization and trying to keep modern retailers out of national markets is neither desirable (because the productivity effects will fail to be realized) nor feasible in the long term (due to the prevailing overall trend towards trade and foreign direct investment liberalization). Delaying the inevitable adaptation of local retail systems to international best practices may imply higher adaptation costs in the future.”

    In the context of the above quote it begs the question, what should be included in a modernization strategy for retailers in developing countries? The quick answer is eCommerce. In the World Trade Organization (WTO) produced paper “e-commerce in developing countries opportunities and challenges for small and medium-sized enterprises” the paper points to a study by the United Nations Conference on Trade and Development (UNCTAD) that has shown that:

    “Small, Medium Enterprises (SMEs), while generally lagging in information and communication technology (ICT), have the most to gain from increases in productivity thanks to e-commerce. SMEs, however, actually run the risk of missing opportunities in both productivity and profitability by not engaging in e-business. SMEs also have a large role to play in the economies of developing countries because it is these same countries that have the greatest potential to benefit from e-commerce”

    The WTO paper continued to point out the following:

    "Unlike the requirements necessary to run a business from a physical building, e-commerce does not require storage space, insurance, or infrastructure investment on the part of the retailer. The only prerequisite is a well designed web storefront to reach customers. Additionally, e-commerce allows for higher profit margins as the cost of running a business is markedly less."

    "Another advantage provided by e-commerce is that it allows for better and quicker customer service. In some cases, customers could have direct access to their own personal accounts online and can avoid calling companies on the phone. This can save both time and money. Adding customer online services such as overnight package delivery services can also have commercial benefits. These can be complemented by package tracking services which allow customers to check the whereabouts of their packages online. This helps provide good levels of customer satisfaction with very little effort from the side of the business."

    In this white paper we have, for emphasis, highlighted the last few sentences in the above quote as it points to the connection between retail and last mile delivery.

    Last Mile Delivery Opportunities in Developing Countries

    In the article “Overcoming The Last Mile Challenge: Distributing Value To Billions” published by Forbes back in 2014 the writer points out that the last mile is a problem that affects both developed and developing countries. At the beginning of this white paper, reference was made to Amazon and how it is solving this last mile problem in the U.S. The Forbes writer concluded the following:

    “While the “last mile” probably represents the greatest challenge for global economic development, it also represents a significant opportunity for innovators to come together across sectors and across borders. And if executed correctly, the impact could be unprecedented.”

    Connection between remittance, retail and last mile delivery - Take the case of Jamaica

    A 2016 report from the USDA Foreign Agricultural Services points out that Jamaica’s total consumer food service sector generated an estimated US$680 million in 2015 sales. Independent foodservice establishments constituted about 60 percent of those sales, while chain establishments contributed the remaining 40 percent. In 2015, Jamaica imported a total of US$841 million worth of food and beverages, of which approximately 60 percent was destined for the hotel, restaurant, and institutional (HRI) sector, while the remaining 40 percent was channeled to household consumers via retail stores such as supermarkets and smaller outlets. These two numbers of US($680m + $841m) x 40% suggest that local (not including the tourist sector) Jamaican consumers spends perhaps nearly US$$600 million on food in 2015. Assuming a 5% year on year growth, in 2017, local Jamaican consumers would have spent perhaps nearly $670 million on food.

    Nielson in a 2015 report entitled “more than half of global consumers are willing to buy groceries online” says that for the U.S. online product sales is roughly 60% non-food to 40% food. Using this as a baseline for estimating the total food/nonfood market size in Jamaica, one would divide the estimated US$670 million spent on food in 2017 and with a rough guide, conclude that (670/0.40) US$1.67 billion is the addressable eCommerce market size.

    2017 CNBC article said that online grocery sales will take about 20% of the market. For simplicity, we will assume this 20% represents the total online potential for the Jamaica market. Therefore, the eCommerce market size for Jamaica can be estimated to be around US$335 (20% x 1.67 billion) million.

    Data from The Dialogue – Leadership for the Americas, as shown in the table below, shows that US$2.374 billion dollars were the remittance inflows to Jamaica in 2017.

    2010 data from the Central Bank of Jamaica shown in Figure 2 below shows the usage of remittances inflows into Jamaica. Let’s assume that this 2010 distribution still holds through for 2017.

    Therefore, on this assumption, one could further assume that between Food and Transportation (18% + 4%) 22% of the 2017 remittance inflows of US$2.374 billion, amounting to just over US$522 million is up for grabs by eCommerce players who simultaneously provide both the online grocery shopping experience and the last mile mobility services.

    The 2010 report from statistical institute of Jamaica says that about 43% of Jamaican households receives remittances and the report further says that the total number of households in Jamaica were 853,660. Therefore, 43% equates to 367,074 household receiving remittances. Using the Bangladeshi data provided earlier and the assumption that the Jamaica market, in this context, is similar, one may conclude that 75% of this 367,0074 or 275,305 households’ grocery buying needs are met by remittance inflows. The eCommerce potential in terms of users is therefore estimated to be a minimum of 55,061 (20% x 275,305) households.

    It was earlier established that the eCommerce market size for Jamaica can be estimated to be around US$335 million. Therefore, mobility services market potential is at least US ($522 - $335) = $187 million. One could further assume that last mile package delivery could be a sizable portion of this estimated overall mobility services market size.

    The Innovation

    The average cost for the sender to transfer US$100 is about US$10. The average cost for the typical receiver to mobilize (travel to and from pickup/shopping locations) to receive the funds and shop in Jamaica is perhaps another equivalent US$15. Public transportation limits the size of each grocery shopping, because it is difficult for an individual to carry more than 1 bags of groceries on a single shopping run. Therefore, multiple unnecessary trips are made to the grocery store and or a more expensive transportation option is chosen to support physical grocery shopping. This cost does not take into consideration the indirect cost of time spent going firstly, to collect the funds sent and then secondly, to go physical grocery shopping. Therefore, pricing last mile delivery with a tiered pricing structure of between equivalent of $15.99 for 1-2/hour delivery window to as low as $9.99 for same day delivery is comfortably attainable.

    Data is cited as showing Jamaica with over 2.5 million cell phone users and that about half of Jamaica’s population of 2.8 million people have access to the Internet at home, at work, at school or through their mobile phones, which is one of the highest in the region. The combination of smart phone plus a closed loop prepaid card mobile payment network provides the enabling force for the success of eCommerce in Jamaica. Therefore, an SME operating in either or both the remittance and retail business, should seize on the opportunity to leverage eCommerce to maintain a competitive advantage or face the threat of an entrant with disruptive abilities.

    This White Paper, using Jamaica as an example, demonstrates the potential opportunity for disruption, to combine three separate, but connected businesses, essential to the GDP of a developing nation, to bring about retail modernization, transportation efficiencies and lower cost directed remittances.

    Providing better customer service and quality of service to our customers through a blog
    (1) Providing better customer service and quality of service to our customers through a blog

    Our aim to provide our customers with the best quality of service and range of quality products we possible can and to do to at the most affordable and convenience way possible. We take pleasure in constantly improving to match our customers and need and find joy when our customers share their experiences with others through their favorite social media channels.

    (1) Why we at ZyppsKart provide our customers with the ability to create wish lists

    What comes to your mind, when you hear the term” wish list”? This feature is exactly how it sounds like: a list of things that you wish to get. At KaribKart, we would you like our customers to be able to save products in a wish list so that they review or buy them later? We also would you like our customers to be able to share their wish list with friends and family for gift giving?

    Offering our customers a feature of wish list as part of shopping cart is a great way for us to provide the best quality of services to our customers. Having the feature of wish list on our store site allows us to engage with our customers in a smart way as it allows our shoppers to create a list of what they desire and their preferences for future purchase.

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