After two years of operation, Nigerian delivery startup DropX has ceased operations, joining the ranks of startups facing closure in 2023 amid challenging economic conditions.
Founded in 2021 by Praise Alli-Johnson and Oluwatope Liasu, DropX aimed to revolutionise local deliveries in Abuja by connecting businesses and individuals with efficient services.
The startup initially gained traction, attracting 2,000 users and enlisting 500 drivers for its platform. However, challenges arose when a misalignment between driver pay expectations and user willingness to pay became evident. To address this, DropX adjusted its prices, focusing on high-value customers dealing with bulk food deliveries, cakes, luxury goods, etc.
Despite these efforts, operational challenges persisted. Users were scattered across Abuja, leading to difficulties in response times, especially outside specific areas.
The startup attempted to address this by hiring more users in town and engaging drivers who also worked for other ride-hailing platforms like Bolt and Uber.
As DropX expanded its user base, it became apparent that the car driver model couldn’t accommodate all segments effectively.
Attempts to onboard independent delivery bike drivers also faced challenges, and requests for cheaper deliveries increased, impacting the sustainability of the business model.
Furthermore, DropX faced issues with users engaging in off-app deals with drivers, resulting in cash transactions outside the app.
Additionally, a collaboration attempt with the Nigeria Postal Service (NIPOST) to enhance delivery services faced challenges despite multiple pitches.
Praise Alli-Johnson, co-founder of DropX, expressed burnout and cited challenges as reasons for the closure, emphasising the complexities of managing assets like bikes, cars, and drivers in the logistics sector.
The shutdown of DropX underscores the competitive and demanding nature of the Nigerian delivery market, shedding light on the obstacles faced by startups striving to navigate operational complexities and align with user expectations.
