E-commerce has gone from strength to strength in Kenya over the last few years but Vincent Milewa, CEO of RafuBooks, uncovered a gap in the market for book deliveries.
“I always wondered why I couldn’t buy books online and have same-day delivery to my home in Nairobi. The few times I did order online, it took about three to four days for delivery. Of course, I recognised a business opportunity.”
Milewa explains bookshops are not as common as other businesses in Kenya, and many people struggle to get stock. To meet the demand, the company works with international as well as local suppliers. “Nobody should wait for a book for four days within the same city, except if it is coming from abroad. Like food, it should be delivered fast.”
The company initially sold novels and self-help books, expanding to religious texts, textbooks and children’s books. “We have processed over 15,000 orders since we launched in 2018. We grew by 30% last year. In 2020, during the Covid-19 lockdown, our increased sales were largely as a result of the lockdowns and people were at home.”
Setting up the business
Rafu means ‘shelf’ in the Swahili language and Milewa reveals he started the company as a side hustle. A 2004 computer science graduate, he worked in the telecoms industry for over a decade in sales and marketing with various multinational companies before launching his business.
“I went through a tough phase in 2018 and read a lot. At some point, I was reading two to three books a week but obtaining them was a challenge and I hated going to town to shop. I had always wanted to start an e-commerce platform. At first, I had a small selection of books with the primary goal of fast, same-day delivery in Nairobi. People are able to order at 3 pm and still get it the same day,” he says.
When RafuBooks was established, Milewa’s finances were not very good and some of the initial capital came from an investment group he was a part of. He started with a few books, a website and three staff, which has since increased to eight.
“I shared a corner in a small office with my friends where I kept two desks and a big shelf. We subsidised a lot of books to get to the level where we are now.”
Retaining his full-time job for a year while RafuBooks got off the ground, he invested half of his monthly salary into the business. The company also received support from family and friends and he actively searched for external investors last year. “We are still progressing with an accelerator programme that may yield investment.”
Strategies for increased sales
Having in-house delivery staff rather than outsourcing to a third party helped to accelerate RafuBooks’ growth, Milewa says. “My business model was expensive initially because I was paying salaries when there was no profit, but when the volume of purchases increased, it became viable to have in-house delivery. The cost remains fixed despite the volume of order.”
RafuBooks works with Kenyan authors who register on its portal and sell directly to readers on the platform. It has 150 local writers with about 300 titles.
The company has 12,000 registered customers on its website. To retain these customers, it now also offers other items. “We realised books and gifts go well together. So, when we thought about diversification, we offered gift items such as chocolate, wine and flowers. It has been a great learning experience for us, and the gift part has been an ideal complement to the book business.”
Lack of people reading a challenge
RafuBooks’ primary challenge is a reading culture that has been eroded by the internet and social media. “The number of bookshops in Nairobi says it all and most of what they sell are textbooks. The majority of Kenyans read for academic reasons, they don’t read purely for enjoyment.”
As such, RafuBooks has had to build its market from scratch. “We have to keep expanding it and it takes a lot of effort. Business will be good when the market grows. The combined bookshops in Nairobi only sell a combined 20,000 copies of bestsellers, which is not much, it could be better.”
Plans for expansion
Milewa’s vision for RafuBooks is to become the Amazon of East Africa and supply other product categories apart from books. “Each country on the continent is different, so it is tough to grow into many countries because of legal, cultural and other constraints . So, growing into East Africa will be our short- to medium-term goal.”
For now, the company is delivering to Uganda and Tanzania but there are plans to expand into other neighbouring countries.