E-commerce has become increasingly strong in Kenya over the past few years, but Vincent Milewa, CEO of RafuBooks, discovered a gap in the book delivery market.
“I always wondered why I couldn’t buy books online and have them delivered the same day to my home in Nairobi. The few times I ordered online, it took about three to four days for delivery. Of course, I recognized a business opportunity.
Milewa explains that bookstores are not as common as other businesses in Kenya and many people struggle to get supplies. To meet demand, the company works with international and local suppliers. “Nobody should wait for a book for four days in the same city, unless it comes from abroad. Like food, it must be delivered quickly.
The company initially sold novels and self-help books, expanding to religious texts, school textbooks and children’s books. “We have processed over 15,000 orders since our launch in 2018. We grew by 30% last year. In 2020, during the Covid-19 lockdown, our sales increased largely due to the lockdowns and people were at home.
Setting up the business
Rafu means ‘shelf’ in Swahili and Milewa reveals that he started the business as a side business. Graduated in computer science in 2004, he worked in the telecom industry for more than a decade in sales and marketing with various multinationals before launching his company.
“I went through a tough phase in 2018 and I read a lot. At one point I was reading two to three books a week, but getting them was a challenge and I hated going shopping in town. I always wanted to create an e-commerce platform. At the beginning, I had a small selection of books with the main objective of fast same day delivery in Nairobi. People can order at 3 p.m. and still receive it the same day,” says -he.
When RafuBooks was established, Milewa’s finances were not very good and part of the initial capital came from an investment group of which he was a part. It started with a few books, a website, and three employees, which has since grown to eight.
“I shared a corner in a small office with my friends where I kept two desks and a large shelf. We subsidized a lot of books to get to where we are now.
While maintaining his full-time job for a year while starting RafuBooks, he invested half of his monthly salary in the business. The business has also received support from family and friends and he has been actively seeking outside investors over the past year. “We are still moving forward with an acceleration program that could generate investment.”
Strategies to increase sales
According to Milewa, having delivery staff in-house rather than outsourcing to a third party has helped accelerate RafuBooks’ growth. “My business model was expensive to begin with as I was paying salaries when there was no profit, but as the volume of purchases increased it became viable to have in-house delivery. The cost remains fixed despite the order volume.
RafuBooks works with Kenyan authors who register on its portal and sell directly to readers on the platform. It has 150 local writers with around 300 titles.
The company has 12,000 registered customers on its website. To retain this clientele, it now also offers other items. “We realized that books and gifts go well together. So when we thought about diversification, we gave gifts like chocolate, wine and flowers. It was a great learning experience for us, and the giveaway part was a perfect complement to the book industry.
Lack of people reading a challenge
RafuBooks’ main challenge is a reading culture that has been eroded by the internet and social media. “The number of bookstores in Nairobi speaks volumes and most of what they sell is textbooks. The majority of Kenyans read for academic reasons, they don’t just read for pleasure.
As such, RafuBooks had to build its market from scratch. “We have to keep expanding it and that takes a lot of effort. Business will be good when the market grows. Combined bookstores in Nairobi only sell 20,000 combined copies of bestsellers, which isn’t a lot, it could be better.
Milewa’s vision for RafuBooks is to become the Amazon of East Africa and provide product categories other than books. “Each country on the continent is different, so it is difficult to expand in many countries due to legal, cultural and other constraints. Thus, growth in East Africa will be our short and medium term objective.
For now, the company delivers to Uganda and Tanzania, but there are plans to expand to other neighboring countries.
Contact details of RafuBooks CEO, Vincent Milewa
Contact details are only visible to our monthly/annual subscribers. Subscribe here.