Sunday, December 4, 2022

GIG Logistics expands to China

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Key takeaways:

  • GIGL expands to China to help Africans purchase items directly from Chinese stores
  • GIGL is now present in Nigeria, Ghana, the US, and the UK.
  • The expansion will help African customers circumvent payment and quality control hurdles that come with shopping from China online. 

African logistics company GIG Logistics (GIGL) is now a registered company in China, bringing the number of countries where it is present to four: the UK, the US, Ghana, and Nigeria.

Speaking to Techpoint Africa, Dr Ocholi Etu, GIGL’s Director of Operations, said the expansion was necessitated by the company’s constant need to satisfy its customers’ needs. 

“In the last 24 months, we’ve been very busy in terms of product expansion and geographical expansion, and this is all targeted based on our central philosophy, which is customer obsession.”

Etu said the demand for logistics connectivity to China had been growing rapidly, and the company started its expansion to the country last year when it completed its China registration.

Importing from China is big money

 A 2020 World Integrated Trade Solution report showed that Nigeria’s largest imports, worth $16 billion, were from China. The US and India came second and third, with $5 billion and $4 billion, respectively. In June 2022, Nigeria’s imports from China totalled $1.2 billion.

These figures are down to China being one of the world’s largest manufacturers. According to Statista, 28.7% of global manufacturing output comes from China; the US is second (16%), and Japan is third (7%).

Cheap labour, low compliance, and zero per cent value-added tax on exportation are some of the reasons most manufacturers prefer to produce in China, which is why it is known as the world’s factory

China is also the global leader in eCommerce. In 2020 American eCommerce giant Amazon made less than half of what its Chinese counterparts Alibaba and JD.com made. 

Beryl TV Alibaba-recorded-the-highest-eCommerce-retail-sales-worldwide-in-2020-682x682 GIG Logistics expands to China Technology

But there’s a problem 

While Chinese eCommerce platforms might be the go-to place for most Africans to get products, GIGL’s Etu said they have experienced issues with making successful purchases from China.

GIGL’s China expansion seeks to address these issues, which range from payment constraints to “what I ordered vs what I got” problems. 

Here’s how GIGL’s China expansion will work

According to Etu, Kim — an artificial intelligence-powered personal shopper — is an essential part of GIGL’s China expansion. 

Kim is a WhatsApp bot that will complete customers’ orders in China. 

When customers find a product they want on any Chinese website or online store, they send the link to Kim and give it adequate information on the product. 

Kim communicates this information to GIGL’s China office. They get the product, ensure it meets the minimum advertised quality, repackage it, and deliver it to the customer’s address through GIGL.

Payment constraints won’t be an issue, as customers can pay the naira equivalent of the cost of the item to a local GIGL bank account. 

Speaking about payments, Etu also revealed that GIGL had to pause integrating crypto into the GIGL app (GIGGo) due to recent regulatory moves by the Securities and Exchange Commission (SEC). He’s, however, certain that the company will still explore the use of crypto for payments. 

Country Manager for GIGL China, Eleanor Cui, said: “GIGL is bridging the gap between China & Nigeria’s commerce by solving one of the biggest challenges in the e-commerce industry: payment in local currency when shopping on foreign websites.”

GIGL is playing the long game

While GIGL is focusing on being a gateway for foreign items in Africa, it still has its eye on global domination. According to Etu, it is a gradual process beginning with mastering the Nigerian and African markets and culminating in expansion to other parts of the globe. 

He’s also optimistic that GIGL could one day offer logistics services within mainland China, competing with some of the world’s biggest eCommerce and logistics companies, such as Alibaba and JD.com. 

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