Neil du Preez of Mellowvans tells us about a light electric vehicle platform.
First of all, how are you and your family doing in these COVID-19 times?
Neil du Preez: We’re good. I’ve got three young children, who had to adapt to new ways of learning and schooling, which was ok, but it was clear that they missed friends, birthday parties, and other normalities. In South Africa, our beaches were closed during the lockdown, which was also the Christmas holiday period, so it was tough keeping kids off the beach and out of the water.
What is Mellowvans?
Neil du Preez: MellowVans are electric delivery vehicles that provide low-cost, efficient, and emission-free utility services in cities. They are attractive and eye-catching, with a class-leading range, acceleration, and safety features. Each vehicle runs at less than a dollar per day in operational cost, provides over 100 km of range, and features 2.4 cubic meters of space, which is more than enough for most urban deliveries. MellowVans have been developed with feedback from some of the world’s leading e-commerce and delivery companies. Our vehicles are safe and feature full internet of things functionality, combined with bespoke client-specific offerings like active cooling and security features. MellowVans are also great for urban advertising, with focused, location-specific campaigns.
What is your business model?
Neil du Preez: Mellowcabs’ business model is based on a leasing model, where we retain ownership of our vehicles and lease them to clients for set periods of time. This usually is a 2 to a 3-year contract, with an annual escalation and a monthly maintenance and insurance cost. Clients can be delivery companies, large retailers, e-commerce sites, store owners, restaurants, or delivery drivers.
We have an additional revenue stream through advertising space on our vehicles. Advertising on our vehicles is highly effective and a lucrative form of income.
Tell us about you, your career, how you founded Mellowvans.
Neil du Preez: The development of a light electric vehicle platform was inspired by Asian and European mobility systems and their influence on individuals and the economy. Mobility is a precondition for economic growth: mobility for access to jobs, education, health, and other services. The mobility of goods is also critical to supply world markets in our globalized economy.
The development and manufacturing journey started at the end of 2016, with several iterations of the vehicle, testing, and prototyping, with input from drivers and operators, until we got to a position where we feel that we have a great product-market fit. We are currently in the process of setting up for serial production in April.
How does Mellowvans innovate?
Neil du Preez: We look to the market and what our client’s needs and problems are. Innovation means nothing if it’s not solving a direct problem and being implemented in the correct way.
How does the coronavirus pandemic affect your business finances?
Neil du Preez: It’s been really good for us on the demand side, driven by the incredible rise in E-Commerce and home deliveries. The urban delivery market is expected to reach EUR 2.3bn by 2027, with a growth rate of over 16% CAGR. The epidemic is accelerating the consumer interest in both the purchase of goods online and the benefit of home deliveries. Considering that freight-related urban trips account today for up to 20% and keep increasing, there is an urgent need to address the last-mile delivery challenge.
Did you have to make difficult choices regarding strategy, and what are the lessons learned?
Neil du Preez: Our four strategic attention points over the next year will be;
- Designing our organization in a way that easily scales in order to generate consistent revenue growth and avoid stall points.
- Embracing a “land & expand” sales approach.
- Packaging Value-Added Services for Repeatable Selling & Delivery
- Package our service offerings as if they are products, using project-based pricing or even annual/timeline subscriptions.
How did your customer relationship management evolve? Do you use any specific tools to be efficient?
Neil du Preez: We will be investing heavily in Customer Experience Management, which I believe is the future. Customer experience is a top priority to businesses for the next 5 years. The reason is simple; the companies that focus on customer experience reduce churn and increase revenues – leading to higher profits. For many, customer service and customer experience are seemingly interchangeable. Yet, one is a single touchpoint with a brand, while the other impacts feelings and emotion and encompasses the entire customer journey.
Did you benefit from any government grants, and did that help keep your business afloat?
Neil du Preez: Not at all.