Published in Sep-Oct 2021
From Dawaai and TAG to Sadapay and Tajir, Pakistani start-ups raked in over $100 million in funding in the first half of 2021 alone, higher than the $66 million registered during the entirety of 2020. In August, Airlift further upped 2021’s total investment by securing $85 million – the largest Series B financing in Pakistan’s start-up history. The funding comes after Airlift pivoted in September 2020 to become a purely e-commerce grocery delivery business called Airlift Express.
Airlift began as a bus-hailing service that aimed to convert commuters who used public transportation; now, with a different business model and the Series B funding, the company plans to expand and take their grocery delivery operations to 15 Pakistani cities by the end of the year (up from the current eight) and is also considering entering another developing market in a few months.
According to Ali Mehdi, General Manager, Airlift, “We want to be one of the first start-ups to have started in Pakistan and then expanded internationally, rather than the other way around. Locally, we are looking at entering cities such as Mardan, Multan and Sahiwal and we are exploring adding higher-value categories like electronics to the app.”
Speaking about the reasons why Airlift decided to change their business model, Mehdi says this was due to the pandemic which saw a drop in the demand for bus services and because the company saw a market opportunity in terms of grocery deliveries. “Although there were grocery delivery companies operating at the time, they could only deliver after a delay of four to six hours or even the next day. There was also a high unreliability factor in terms of product availability and quality. Our aim was, and is, to be quicker, more reliable and competitive on prices.”
Airlift was one of the first companies to offer express grocery delivery and use ‘dark stores’ (similar to supermarkets in terms of size and configuration but not open to the public) for their inventory. Companies such as Careem would pick up products from nearby stores and then drop them off, while Airlift opened 20 to 30 dark stores, so that when a customer taps on ‘checkout’ for an express delivery, the order is immediately sent to the nearest dark store for onward delivery.
As is the case with any other business, grocery deliveries have their own set of challenges. They require upfront investment for fixed assets, building a rider fleet and hiring employees.
“As companies grow bigger, they tend to lose out on a high-quality customer experience. However, we strive very hard to maintain the same level of customer experience that we had on day one – while operating on a scale 100 times larger compared to when we launched. We try to maintain our edge. If someone places an order and has a problem (late delivery, wrong items), we have a responsive and supportive customer support team that is able to resolve these problems. We designed our business on the principle to always ensure that 100% of the orders are delivered accurately, which is why we have real-time information on inventory in our warehouses so that if a product is unavailable, it shows up as ‘sold out’ on the app.”
Airlift’s product base is also customer-centric and the products that they stock are largely data driven. “It’s purely dependent on what customers order; how much they order and how frequently. While our initial decisions on what to stock may be based on internal estimation methods, whether they stay on the platform or not is driven by customer demand.”
Airlift have primarily been using digital (Instagram, Facebook and YouTube) and OOH (billboards and branded vans in major cities) to attract customers. However, according to Mehdi, as with any other business, the best marketing tool to date has been word-of-mouth referrals.