Cartona: Connecting Retails, Wholesalers, and FMCGs in One Platform
Updated 9/3/2024 8:00:00 AM
Arab Finance: Egypt's retail market is undergoing a significant transformation, driven by the rapid adoption of digital services and e-commerce solutions.
The sector is anticipated to grow from $200 billion in 2020 to $254 billion in 2025, with a compound annual growth rate (CAGR) of 5%, according to Oxford Business Group’s report on the retail market in Africa.
As the country's economy continues to expand, the demand for efficient and cost-effective solutions for retailers and wholesalers is on the rise, positioning companies like Cartona, a leading B2B marketplace, at the forefront of this.
So, Arab Finance interviewed Mahmoud Talaat, CEO and Co-Founder of Cartona, to explore the company’s impact on the sector’s financial performance and its vision for the future.
1-Can you describe Cartona’s business model and how it differs from traditional B2B marketplaces?
Carton is Egypt’s fastest-growing B2B e-commerce marketplace, designed to empower the traditional retail market by streamlining the distribution process.
Our platform directly connects retailers with wholesalers, suppliers, and fast-moving consumer goods products (FMCGs), enabling buyers to order inventory via an easy-to-use mobile application that provides access to a network of curated sellers.
Through Cartona, retailers can better manage stock and working capital via cash or credit orders, improving profit margins. Retailers and suppliers can fully integrate our proprietary technology for ordering, inventory management, branding, embedded finance, ledger, and tax functions. The platform offers detailed market insight into buyer behavior, price competition, and market share.
Our asset-light business model is a major competitive differentiator, especially amid an inflationary environment. This model maintains a lean cost base and compelling unit economics, with the company reaching experience levels on par with asset-heavy operating models.
2-What are the biggest challenges Cartona faces in scaling its operations? And how are you addressing them?
The market we operate in is fragmented and offline, with digitalization being gradually adopted. This presents a significant challenge we are committed to overcoming. Our mission is to engage and integrate suppliers and retailers into our platform, ensuring they remain relevant in a rapidly evolving digital landscape while making trading easy and accessible.
We aim to be the go-to solution for increasing profitability for suppliers, retailers, and stakeholders involved in our marketplace. By enhancing efficiency, reducing costs, and fostering growth through our technology-driven platform, we support the financial success of all connected to Egypt’s traditional retail market.
3-Can you share some insights into Cartona's target customer base and the main pain points you are addressing for retailers, wholesalers, and FMCG companies?
Cartona’s target base is retailers and sellers, including producers, distributors, and wholesalers.
Retailers often lack visibility and access to a broad range of suppliers, limiting their options and causing them to purchase products at less competitive prices. Market fragmentation and the lack of access to supplier credit also force many retailers to purchase inventory with cash.
Dependency on cash can hamper retailers’ ability to scale and grow their businesses effectively. So, we offer embedded financing options and social, engaging features for small retailers, such as the ability to pool orders and fiscal solutions that enable business growth.
Suppliers and wholesalers also rely heavily on cash transactions, which can limit their business growth. To support their operations, we offer cashless solutions, including installment options, which ease the financial burden and help manage their cash flow more effectively.
4-How does Cartona generate revenue? And what is your monetization strategy?
Cartona takes a transaction take rate from suppliers and retailers.
5-How has Cartona's partnership strategy, such as the collaborations with FMCG companies and the food delivery service Talabat, contributed to the company's growth and expansion?
Cartona consistently partners with FMCG companies to boost sales and demand, optimize costs, drive mutual growth, and enhance our marketplace.
By collaborating with leading enterprises in the e-commerce sector, such as Talabat, Amazon, and Noon, Cartona leverages its extensive supplier network and offers access to over 40,000 FMCG products, helping businesses efficiently source a wide range of products.
We partner with financial gateways to support the transition to a cashless society, simplifying transactions and making the process more convenient for our partners. This helps streamline operations and enhances the overall experience for retailers and suppliers on our platform.
6-Can you provide an update on Cartona's recent funding round? And how does the company plan to utilize the additional resources to drive further growth and expansion?
Recently, Cartona secured $8.1 million in a Series A extension round led by Algebra Ventures, with the participation of Silicon Badia and the SANAD Fund for MSME.
The raised equity, amounting to $5.6 million, will be used to accelerate Cartona’s different verticals, including FMCG and hotel, restaurant, and cafe catering (HORECA), and to grow its market share. Cartona also plans to establish firm foundations for regional expansion into new large markets in MENA, highlighting its commitment to becoming a dominant regional player in B2B e-commerce.
The funding round included $2.5 million in debt capital, raised from leading debt providers as part of our strategy to have diversified sources of capital. The debt was raised in local currency under competitive terms and will help fulfill working capital needs for local retailers.
With a significant cash position from previous funding rounds and invaluable support from reputable investors, Cartona is poised to continue transforming the traditional trade market and creating value for all stakeholders in the marketplace.
7-Can you share some insights into Cartona’s financials, such as revenue, growth rate, and profitability?
Cartona’s revenue growth for 2023-2024 was fourfold. The platform now has up to 188,000 retailers, with a presence in 17 Egyptian cities and a growing market share.
8-How does Cartona ensure fair competition and prevent monopolies on its platform?
Our strategy and business model are designed to enable the market, and we are deeply committed to supporting all stakeholders involved.
By leveraging technology, we create value and facilitate connections across the supply chain, ensuring all ecosystem participants can thrive.
9-What are the main growth opportunities for Cartona in the Egyptian and broader regional B2B e-commerce market? And how is the company positioning itself to capitalize on these opportunities?
Cartona’s total addressable market is vast, offering a significant opportunity to help businesses shift to online marketplaces in Egypt and MENA. As an asset-light model, Cartona can easily replicate its business model in different verticals and markets in the region.
This is proven with Cartona’s fast-growing new HORECA vertical, where the company leveraged its infrastructure and learnings in FMCG B2B core business, now serving over 3,000 customers already and proving scalability and opportunities available.
10-Can you elaborate on Cartona's efforts to foster financial inclusion and support the broader development of the Egyptian retail and wholesale ecosystem?
Traditionally, Egypt’s trade market has relied heavily on cash transactions. Cartona is actively working to reduce cash dependency through its digital platform and digital payment integration.
Our efforts have already resulted in 20% of our transactions being conducted via a cashless system. We aim to continue to enable the growth of retailers and suppliers via our platform and its features.
11-How does Cartona plan to expand its reach beyond Egypt and into other African markets?
Cartona has an exciting future ahead, and it looks forward to replicating the successful execution of its business model in other regional markets—all while making trading as easy and accessible as possible for retailers and suppliers.
Related News
