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In the Middle East and parts of Asia, it's typical that retail packages never make it to the consumer, mainly because many people don't have an address and so they're difficult to find. Hard to believe in the U.S., where the US Postal Service dates back to the Revolutionary War.
In Saudia Arabia, about 40% of delivered packages are returned, said Idriss Alrifai, co-founder of Fetchr, a Dubai-based startup that's just raised $11 million to change the supply and logistics infrastructure (or lack of it). To date, the company is available in Saudi Arabia, Bahrain, and United Arab Emirates, and later this year in Qatar and Kuwait.
Alrifai and co-founder Joy Ajlouny both have backgrounds in the fashion and commerce industries, where they both experienced poor supply-chain logistics. In other words - frequently-returned packages. "Delivery companies couldn't find the customers," said Alrifai.
"There are no addresses and mailboxes in the Middle East," said Ajlouny. "It's also a problem in Brazil and Russia and Africa... What's amazing is that these markets are booming. The problem is with the logistics."
Today, goods are delivered by drivers who call up the consumer multiple times to get their location. In some cases, consumers are giving them directions on the phone because there are no addresses to give. Of course, a person can share their GPS location, though that process may or may not be an easy thing to do.
With Fetchr, consumers can place their order and provide their cell phones. Then the company gets the order, dispatches it to the driver and the driver can then just go to the location of the phone. Of course, there's minor problems like not being in the appropriate place to receive a package, or having to be home at the time a package is being delivered. But it's better than the current solutions. It's also less expensive.
Each package (under 3 kilos or 2.2 pounds) costs roughly $6.50 for same-day delivery. It's a flat fee across the country. "The competition charges the same prices for a three-day delivery," Alrifai explained. "For same-day delivery, it's $80 [per package]."
Currently, Fetchr delivers about 2,000 packages a day. Some 85% of those packages are for customers purchasing from Fetchr' customers, such as Groupon and Sony and international retailers. Fetchr has 130 companies it's providing delivering logistics for. About 15% of the packages are for consumers who are sending packages to other consumers.
To date, there are 130 drivers who get paid a salary to deliver packages. In the future, Fetchr would like to incorporate an Uber model in which it can have a network of third-party drivers paying per package delivered, said Alrifai. The company hired a general manager at Uber to help ensure it can set up the proper system.
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