There’s a common saying in Ethiopia: “Fifty lemons may be a burden for one person, but they become an ornament for fifty people.”
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This saying embodies the spirit of collaboration, illustrating how difficult tasks become easier when done together. This collaborative ethos is deeply ingrained in many aspects of Ethiopian life. A new startup has harnessed this spirit and applied it to e-commerce to create an innovative platform.
Chipping In to Buy Cheap
Operating for the past seven months, ChipChip is an e-commerce platform primarily selling agricultural products. “We aggregate demand, socialize it, and provide a platform for manufacturers,” says co-founder and co-CEO Amir Redwan. Drawing from their experience in the food delivery sector, the founders identified opportunities to expand the supply chain and address the high inflation rates affecting food products. Inspired by the success of social buying apps in countries like China and Indonesia, ChipChip was founded in 2023 to bring a similar model to Ethiopia.
The name ChipChip is a word play on “Cheap”. It also derives from the concept of chipping in. The idea is that users can chip in to get cheap products, Amir told us. This concept is central to ChipChip’s business model.
What is Social Buying?
ChipChip offers a special feature known as group buying. Here’s how it works: if you want to buy a product, like onions, you join a group on ChipChip with other users who also want to buy onions. ChipChip then aggregates the demand and buys the onions in bulk directly from farmers, who offer discounts for bulk purchases. The bulk order is then distributed among the group members according to their demand, allowing each individual to get discounted products. “It’s like a digital ቅርጫ,” says Biruk Getahun, co-founder and CMO.
Agricultural products often face inflated prices due to price-gouging middlemen, who act as intermediaries between farmers and consumers. These middlemen purchase goods cheaply from farmers but inflate prices for consumers without providing additional value. ChipChip disrupts this model by connecting farmers directly with consumers, eliminating middlemen. This approach ensures farmers receive fair compensation while users enjoy more affordable products. Currently, ChipChip collaborates with farmers from five regions across Ethiopia.
Entirely mobile app-based, ChipChip ensures everything from shopping to payment is handled digitally. This approach has proven effective. The co-CEO highlighted the unexpected level of acceptance, citing up to 40,000 registered users who have downloaded the app and over 10,000 active users.
ChipChip’s social buying model has also been effective in building trust. One of the main challenges of e-commerce in Ethiopia is a lack of trust among customers. Establishing customer trust regarding product quality and pricing is a hurdle in many platforms. However, ChipChip's unique social buying feature leverages user referrals to naturally build trust. Its discounts have also made ChipChip popular, offering products with up to 55% of the market price. As a result, ChipChip now handles up to 3,000 orders per day.
Future Vision
“We’re currently focused on growth than profits,” Amir says. The company is building traction and trying to solidify its place in the Ethiopian market. Although ChipChip has gained some initial investment through seed funding, it plans to attract additional foreign investment from VCs.
ChipChip plans to expand to the broader African market in a short time, Biruk told us. The founders are very optimistic about their company’s potential and plan to share their solution with the rest of the continent.
Advice for Startups
“Entrepreneurship is very satisfying, but it’s also very hard,” says Biruk. He advises aspiring entrepreneurs to do the work and bring their ideas into reality. “You won’t rest until your ideas come through fruition” he adds, “but once you do, it’s the most satisfying thing”.
