LAST MILE DISTRIBUTION | Design and support innovative inclusive ventures
Helping African Queen digitalize operations
During Covid, African Queen, a leading distributor in Uganda and a British International Investment (BII) investee, recognised an opportunity in the crisis – and set up an entirely new distribution model called AQ Direct (AQD). The objective of AQD was to provide efficient and direct access for its products (school supplies, tissue and hygiene, personal care products and other consumer products) via a Tuk-Tuk fleet, to increase distribution footprint and help reduce costs of purchase for small retailers.With funding from BII technical assistance facility, Hystra provided technical assistance to help AQD understand the key purchasing pain points of small shop owners, and design a business model overcoming those. The business was launched in March 2021 and quickly gained traction, proving the market need. However, profitability was still elusive.In 2022-23, AQD requested a second round of support from Hystra, including a detailed analysis of the unit economics of different models. This led to key findings on factors affecting profitability, that still drive how the business is run today:
Growing numeric distribution by optimizing time in the field: To limit the time spent by Tuk-Tuks at each shop, two concrete solutions were discussed and implemented: a re-design of the Tuk-Tuk, and the implementation of a pre-seller model whereby pre-sales agents on motorbikes, who can move fast in traffic, take orders, and Tuk-Tuks only deliver.
Restructuring routes to achieve profitability: With a better understanding of route profitability, AQD decided to close lower profit routes.
Aligning incentive schemes: AQD reviewed sales agents’ incentive scheme to match key drivers of success for the business as a whole.
Reducing cash in the sales pipeline: To limit fraud and credit risks, AQD pushed for mobile money payments from its clients. As of 2025, over 70% of AQD clients pay digitally (from less than 7% in 2022).
AQD is now fully a profitable business unit, having grown at a 52% CAGR over its first 4 years and outlived all of its larger and better-funded digital-first last-mile competitors who had instead chosen to focus on expansion first rather than profitability.
Learn more in this case study.
“With the assistance of Hystra, we were able to start understanding best in class models of execution in digital and last-mile, and better segment our customers. You have helped us see and want to develop the future.”
- Kim Kasule, Project Manager for African Queen.