Fetchr warehouse dubai

Now it was clear he had not, so he pulled out his phone, opened the Fetchr app, and asked to have a driver collect his passport from his office and deliver it to him at the airport in time for him to catch his flight. Just a week before, a colleague realized she did not have her laptop when she arrived at a client’s office to make a presentation. She used Fetchr’s NOW, the company’s customer-to-customer (C2C) service that had been launched two years ago and only accounted for a fraction of Fetchr’s revenues, and her laptop arrived just in time for her presentation. Fetchr’s roots were in MENA360, a technology-based delivery and logistics company in the United Arab Emirates (UAE) that served both businesses and individual consumers via its mobile app. Founded in 2012 by Idriss Al Rifai, the venture was later rebranded as Fetchr. He had realized that delivering and receiving packages could be a frustrating experience. One of the reasons was that most homes and businesses in the region did not have formal street addresses, so it could be tricky for drivers to find the location where they were supposed to deliver. When it came to payment, most customers paid cash-on-delivery (COD), which meant someone had to be physically present at a particular address to receive the package and make payment in cash. Al Rifai wanted to simplify the process and create a customer-centric technology-based solution. Over the years, he grew its product and Fetchr was mainly focused on catering to the last-mile delivery needs of businesses such as e-commerce companies, retailers, and banks (B2C) as well as C2C. The Fetchr app was built on an impressive stack of technologies across the value chain to eliminate hurdles customers faced in the region. One of Fetchr’s important innovations was to use a customer’s GPS a coordinates to identify a location for delivery. Through this patented technology, Fetchr had been able to enhance delivery performance and success rate as well as customer experience. By mid-2016, the company had expanded dramatically, but it had operational efficiency and profitability issues. This was all the more worrying because investors were making it clear to Al Rifai that operational profitability was becoming increasingly important at that level of scale and Fetchr a GPS stands for Global Positioning System, a satellite-based navigation system. Professor V.G. Narayanan and Research Associate Eren Kuzucu (Middle East and North Africa Research Center) prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2019 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by jianxiong huang in BA3103-Fall2019 taught by SUNIL CONTRACTOR, Temple University from Aug 2019 to Feb 2020. For the exclusive use of j. huang, 2019. 119-018 Fetchr: A New Way of Last Mile Delivery should demonstrate that there was light at the end of the tunnel or the success of the company would be at stake. Amidst a discussion on whether to expand into Jordan and Oman, the Fetchr team was scrambling to find ways to cut costs and set about defining ways to improve its operational efficiency: they decided unit economics analysis was to be the way forward. So many questions loomed. Did the ways that the company was looking to reduce costs and improve profitability make sense? Should Fetchr take advantage of opportunities to expand while it was facing a potential loss of future investors? Should it make its existing operations more profitable, or continue geographical expansion? As he waited for his passport to arrive, Al Rifai was weighing his options. Industry Background Thanks to the popularity of e-commerce in the Middle East and North Africa (MENA), which was attributable to healthy, growing economies and favorable demographics, the logistics industry was also experiencing rapid growth, and at rates that surpassed what was happening in other regions of the world. (See Exhibit 1 for a map of MENA and Exhibit 2 for the e-commerce market in MENA.) Cultural factors also contributed to the success. For example, the absence of entertainment infrastructure such as cinemas in Saudi Arabia and the extreme heat prevailing in the region caused many people to spend time indoors. Additionally, the fact that women could not drive in Saudi Arabia till very recently favored the growth of e-commerce. Online shopping made it possible for all those people to do their shopping easily from home. The availability of high broadband penetration across the GCC b countries was also a factor of success for online businesses. Multinational logistics companies such as FedEx and DHL had had a limited presence in the market for a long time, but they had avoided establishing large operations in the region, owing in part to bureaucratic challenges and partly because they were unwilling or unable to deal with specific local realities. These included a reliance on COD for payment, a lack of efficient delivery networks, and the fact that some markets did not have a street address system meant that, in some markets, up to 40% of packages were returned to senders because the recipient’s location could not be found. 1 It was therefore the regional players that were competing to serve customers in the region and who were willing to cope with the realities on the ground, and they flourished as a result. Aramex, for example, a regional logistics company founded in Jordan in 1982, was the largest courier company in the MENA region. Having created a name for itself, it dominated the market. Last Mile Delivery Last mile delivery referred to the final step in the logistics process: the delivery of the product to the consumer. (See Exhibit 3 for last mile delivery in the logistics industry.) As a subsector of the logistics industry, it experienced similar growth and suffered the same pains that other parts of the chain did. The no-address issue in particular was a major challenge for last mile operations. Drivers had to rely on landmarks and geographical descriptions, and they sometimes had to resort to phoning the intended recipient to get directions—a highly inefficient process at best. Christopher Schroeder, who was the author of Startup Rising, a book that documented entrepreneurship in the region, noted, “The No. 1 challenge has always been the 'last mile' of logistics. While things seem to be improving, b GCC stands for the Gulf Cooperation Council, a political and economic alliance of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman. 2 This document is authorized for use only by jianxiong huang in BA3103-Fall2019 taught by SUNIL CONTRACTOR, Temple University from Aug 2019 to Feb 2020. For the exclusive use of j. huang, 2019. Fetchr: A New Way of Last Mile Delivery 119-018 the ability to find addresses in Saudi Arabia—and a lot of basic stuff in the last mile of execution—is going to be a big question they're always wrestling with and thinking about.” 2 Dissatisfied with international delivery companies and local players alike, some local e-commerce players established their own delivery fleets. Two of the big e-commerce players, the UAE-based Souq, MENA’s first unicorn company that had 37 million unique visitors every month, and MarkaVIP, an invitation-only flash sales company based in Amman, Jordan, were among them. 3 The drawback was that building and operating a proprietary delivery network was both capital- and labor-intensive. Building networks for delivering packages required purchasing fleets of cars, paying drivers and customer service representatives, procuring storage facilities, and hiring loading crews. Cash-on-Delivery MENA consumers were tech-savvy, as evidenced by high rates of Internet and smartphone penetration. People in GCC countries, for example, owned an average of 2.9 smartphones. (See Exhibit 4a for economic and demographic overview of MENA countries and Exhibit 4b for selected MENA countries.) E-commerce growth rates were high as well, yet 80% of online transactions were paid for not online, but on a COD basis. In this context,