Real estate developer Sixth of October Development and Investment Company (SODIC) partnered with Egyptian startup Goodsmart to make it easier for residents to acquire their needed household items and groceries. Goodsmart will provide a box for each resident in SODIC East compound, through which various daily-needed items are delivered.
It sounds quite simple: an isolated box next to the house door with a lock and an application from which one can order groceries, stationery, meat, baked goods and medications. The house owner opens the app before 9:00pm, orders what is needed for the next day and wakes up the next morning to find his needed products in the box next to the door, with gel packs to keep the products cool.
But behind this seemingly simple system lies a warehouse, a team of 85 people and endless automated processes.
Business Forward sits down with 36-year-old founder and CEO of Goodsmart Amr Fawzi to take a peek at how the company reached an agreement with SODIC and the process through which the box is filled.
The deal with SODIC
Every resident in the SODIC East compound is getting a free box and a one-year subscription for Goodsmart’s services upon move-in. “We’re solving a huge problem for them. The residents do not have a supermarket in the compound,” Fawzi says.
“We come in with our 22,000 products and provide residents with their needs every morning,” he adds.
We come in with our 22,000 products
Some people in SODIC’s management who lived in Sheikh Zayed were already Goodsmart clients before the deal came to life. They recommended the service to their company in order to be “the first compound to offer such a service,” according to Fawzi.
The negotiations started four months ago, between setting up the unprecedented model and formulating the contracts. In three weeks’ time, the deal will come to life and Goodsmart will start delivering to SODIC compounds in Sheikh Zayed, and later on in the Fifth Settlement. The deal brings with it 1,000-6,000 clients.
“We already got offers from other compounds which makes us look into leveraging the model. This would help us with our sales process,” he adds.
Which need is Goodsmart fulfilling?
“In 2013, I wanted to start my own company. Everyone has an issue with getting household items and groceries,” the founder tells Business Forward. The issues arise from unattended delivery – one always has to wait for the deliveries of supermarkets and pharmacies and so on, resulting in a lot of deadweight time.
Goodsmart also realized that the products people need for their house can be repeated over intervals. “If you eat a yoghurt or an apple every day, there is no sense in buying a large amount of it and then at some point throwing the rest away because it has gone bad. So, the repeated ordering of certain items every day can minimize household waste,” he states.
After a year and half of preparation, Goodsmart launched and “solved these problems with a mobile app and a box,” according to Fawzi.
The delivery of the order takes place between midnight and 6:00am, without ever meeting the client.
Delivery takes place between midnight and 6:00am
How does it work?
“Everything is based on automation. I always think about automation and improving the process. We are a paperless company,” Fawzi explains.
Clients place their order on the app and the system checks if the products are available in the startup’s warehouse in Sheikh Zayed. If not, the suppliers bring their products to the warehouse. Then drivers take the items and deliver them to the designated clients.
“We are always on the lookout for those who are best at what they offer – the best butcher, the best bakery, the best stationery [provider]. We add them onto our platform so that people can order their products,” he says.
Any product that can stay unaffected for over a month is placed in the warehouse. Products that require freshness, like tomatoes for example, are delivered to the warehouse everyday in the needed quantity from suppliers, such as farms and bakeries.
“We use data for all our operations. We just built an automatic replenishment system using artificial intelligence to foresee what our clients will order everyday through understanding the client for a year. Its precision stands at 98 percent,” Fawzi reveals. “We know exactly what the client is going to order and this helps us minimize waste in our warehouse and ensuring the right size of the warehouse.”
Most clients are residents of Sheikh Zayed and 6th of October, usually in compounds where facilities and stores are not available. The next step is the Fifth Settlement.
How is Goodsmart performing?
In the past four months, Goodsmart doubled its revenues and number of clients.
“In the first year, we grew very fast, and then we slowed down for a year and a half, because we wanted to establish a better infrastructure within the company,” the founder recalls. Fawzi’s three brothers joined the company at different phases to support him.
“The internal enterprise resource planning (ERP) system is built in-house from scratch. We started testing on friends and family for three months before expanding,” he says.
A year later, Goodsmart won the first prize at the Injaz Egypt startup competition, after which the team started to fundraise and nailed a $750,000 fund from Algebra Ventures.
The fund was put into building a very strong team. Today, about 60 percent of the team works on operations, while 40 percent are in-office team members. “We are currently raising a second round and preparing for a third round,” Fawzi concludes.