Rabbit, the e-commerce platform, announced Tuesday that they have launched Gomla, a new product offering customers that buy in bulk the cheapest prices across Egypt, and next-day delivery.
Rabbit launched Gomla in response to a shift in global consumer behaviour towards bulk buying, strongly reflected in the Egyptian market. Market data indicates that bulk buying is set to evolve into an EGP 5bn market by 2024. Originally triggered by the pandemic, the trend has been sustained driven by inflation and added price pressure. Other reasons include availability (with some supply chain challenges persisting), and families spending more time at home with hybrid work. Consumers are buying both bigger quantities and larger package sizes (average volume per unit is up 2.1% year on year). The most popular products for bulk buying are paper products (55%), household cleaning products (35%), shelf staples (26%) and personal care items (22%).
“We created Gomla to fulfil the growing need for great savings, something users across all segments presently are focusing on, especially ahead of Ramadan,” said Ismail Hafez, Co-Founder and COO of Rabbit.
“Whether it’s a large family household, or a young couple looking for great deals on their monthly restock, Gomla caters to a new user segment altogether, and brings more choice to existing users of our 20 and 60 minute offerings in a different consumer moment,” said Ahmad Yousry, Co-Founder and CEO of Rabbit.
Costco, the wholesale club brand that has become synonymous with bulk buying, is currently the third largest retail player globally (after Walmart and Amazon), with $222.7bn of net sales across 14 countries around the world in 2022, a 40% increase over 2 years. Wholesale clubs (sometimes referred to as warehouse clubs) were originally popularized in the US in the 1970s. The business model, selling consumer goods in bulk at deeply discounted prices exclusively to members paying an annual fee, has stood the test of time. However, a myriad bulk buying options have been made available by both online and offline retailers around the world.
“Gomla is essentially Costco sans the membership fee,” elaborates Hafez.
Prices for products on Gomla are less than or in line with major supermarket chains that compete heavily on price. Customers enjoy the additional savings in transportation costs, and added convenience of doorstep delivery.
Whether membership based or not, the model works by keeping operational costs down and passing on the savings to the end consumer. To this end, Rabbit works directly with over 200 suppliers to eliminate middlemen and reduce margin leakage across the value chain. Moreover, the no-frills operation via “dark stores”: compact, tech-enabled and highly efficient neighbourhood warehouses, eliminates the massive costs associated with large brick-and-mortar stores.
By working directly with suppliers, Rabbit is also able to ensure the authenticity of the products sold, and their compliance with applicable standards – which has emerged as a concern as of late.
Finally, focusing on a smaller, meticulously curated selection is another success factor. For example, Costco limits its assortment to 4,000 SKUs (compared to 142,000 at Walmart.