Over time, technological transformations have revolutionised the ‘last mile’ delivery space to the end consumers in Pakistan due to strong growth in e-commerce. Yet the B2B (business-to-business) movement of goods is still happening through an unintelligent, manual and antiquated process. Small and medium-sized businesses are especially hampered by the unavailability of warehousing space and long-term contracts needed to access the logistics facilities. Lack of warehouse flexibility and insights lead them to overspend on inventory.
That’s not all. An opaque and slow supply chain system means that the time to set up operations is too long, with limited visibility or tracking of the stocks and orders. Large companies have the wherewithal to either set up their warehouses and purchase a fleet of trucks or rent both on a longer-term basis on the strength of their financial muscle and big volumes. But the smaller businesses can’t and are often not entertained by large freight and warehousing firms because of low volumes.
This problem of warehousing and transportation for smaller businesses is now being taken care of by a young supply chain start-up — Oware. The tech-driven company was set up in January 2021 and has since been assisting businesses, particularly small and medium manufacturers, to fix their warehousing and logistics problems at the backend. Or what they call the ‘first mile’ in the supply chain infrastructure to boost their sales through flexible, on-demand warehousing and distribution solutions.
Valued by international investors at $15 million in May last year, when it raised $3.3m in a pre-seed funding round backed by the US investor Flexport Fund, the company is already being billed to be a game changer for B2B warehousing and distribution requirements of the businesses in Pakistan.
The young supply chain start-up offers shared warehousing and distribution facilities across the country at flexible terms
“As elsewhere in the underdeveloped countries, the smaller businesses in Pakistan are also being held back by an antiquated warehousing and logistics system. These companies must lease or buy a property and hire staff to manage their warehouse to store their inventories to grow and expand,” Adil Nisar Vohra, the co-founder of Oware, told this correspondent in an interview.
“Building and renting warehousing is capital intensive and requires long-term contracts that a small or medium business with low volumes can hardly afford. Hence most businesses struggle to secure warehousing capacity to store inventory, find it difficult to keep track of stocks and have to face distribution problems. Most warehouses in Pakistan are run on paper or phone calls or WhatsApp, or emails. This increases businesses’ cost of entry and expansion,” Mr Vohra elaborated.
Oware has opened 12 warehouses across four cities — Karachi, Lahore, Multan and Islamabad — and has a presence in 20 cities offering 500,000 square feet of space to rent; half of this space is active at the moment. It has already signed 50 businesses, including large multinationals.
The businesses can simply lease the space they require to store their inventories in any of these facilities rather than having to find and manage warehousing for themselves or renting extra space, raising their costs. It also offers a distribution service, moving goods from port to factories to warehouses or customers such as other factories, businesses, or retailers.
No long-term contract is needed to use Oware services that connect its customers with freight and warehouse owners at one platform.
Oware’s technology helps businesses by offering scalable, tech-driven warehousing and distribution for B2B and retail through its connected fulfilment centres and third-party logistic providers. This allows companies to quickly commence their operations from one or more locations anywhere in the country to reach more customers unhampered by operationally intense and complex logistics planning and investment.
Mr Vohra argued that the lack of warehouse flexibility forces businesses with lower volumes to overspend on inventory storage, resulting in expensive and late deliveries and theft due to poor visibility into operations.
“At Oware, we help them tackle these issues created by a fragmented market. Our solution to the problem is based on a shared infrastructure that enables businesses to build sales at significantly reduced costs. Our focus is on the manufacturers to give them access to their customers by making available warehousing and distribution with better transparency they need at minimal costs and on a flexible term period. Our company lets the businesses track and manage their shipments.”
Oware was born out of Mr Vohra’s personal experiences and difficulties. When he set up his own company to source, manufacture and distribute LED lights after leaving a ride-sharing technology company, he soon ran into warehousing infrastructure problems. Renting a space to warehouse his products in Mardan helped him boost sales by 30 per cent.
But shortly after, he realised that it had raised his costs exorbitantly because he did not have enough volumes to use more than half of the space he had leased at any given time.
“That meant that I was paying double the rent for the space I was actually using to store my lights. At that point, he spoke with his co-founder Raza Kazmi, and they sat down to give shape to their idea of a supply chain technology company that offered shared warehousing facilities across the country at flexible terms. “This means we may have a 25,000 square feet warehouse, but you can rent just 200 square feet. Moreover, you don’t have to sign up for a five-year period; you may use that space for one week for whatever period you want it for. That means you have to pay for the space you use and the period you occupy.”
“We have created a connected world of distribution, a digital supply chain management and shared warehousing and logistics infrastructure by mapping all warehouses across the country. We are optimising the first mile of the supply chain by simplifying the whole process for maximising efficiency and use of resources,” Mr Vohra said.
“A product must move between several warehouses, fulfilment centres and trucks to reach its destination. Multiple businesses manage this complex process without interconnected systems. We’ve built a connected world of distribution that enables a leaner and faster route to market for our customers at a competitive cost. We help them by levelling the playing field by giving them access to warehousing facilities that are available only to the large companies and multinationals.”
The start-up rents its warehouse space and works with third-party logistics providers. An asset-less company, Oware has partnered with warehouse owners and freighters that handle almost everything its customers need for inventory storage and deliveries. Its online portal manages product inventory at its warehouses and tracks shipments in real time with a digital proof of delivery.
“We help companies to grow by ensuring flexible response to demand fluctuations and faster, affordable delivery of goods. They also get real-time visibility on stock levels and movements into the entire operation,” Mr Vohra explained. Oware supply chain technology is also available to multinationals and large national corporations that own warehousing space and trucks to manage their inventories and logistics better. The company has licenced its technology to a foreign company and a couple of Pakistani firms to help them update their supply chain management.
Oware understands business in Pakistan, has experience in supply chain management, and its technology is local. So it can also offer this technology to larger firms at a much lower price than its foreign competition to improve their operations.
Khalid Wattoo is a farmer and a development professional Sara Mehmood is a researcher in forestry and environmental sciences
Published in Dawn, The Business and Finance Weekly, January 9th, 2023