Startups Try to Put Remote E-Commerce Customers on the Map

A handful of startups are trying to solve one of the more vexing problems in e-commerce: how to deliver a package to a home or office that doesn’t have an address.

That is a constant challenge for online retailers and delivery companies in many of the fastest-growing e-commerce markets, including India, and parts of the Middle East and Africa.

Rather than having a conventional street address, an office in one these regions might give its location as “200 meters south of the Pizza Hut.” A home might have no identifier beyond a street name, or even just a part of town.

On major Asian e-commerce sites, such as China-based Alibaba Group Holding Ltd. or Flipkart Internet Pvt., India’s largest online marketplace, customers who don’t have a street address just enter their name, city and phone number on the checkout screen, and sometimes include nearby landmarks in the “address” fields. Their packages are either delivered to a central location for pickup, or delivery drivers simply call when they get close.

In dense urban neighborhoods, drivers may find themselves wandering up and down streets, phoning the recipient multiple times to confirm and reconfirm directions. Many consumers who have enough disposable income to shop online still shop in stores to avoid the hassle of arranging a delivery.

Now, companies are competing to solve that problem with technologies ranging from mobile apps to new global maps that create a unique address for every spot on the planet, using designations that are shorter and simpler than multidigit geographical coordinates like latitude and longitude.

Some of them have attracted investments from venture-capital funds, which expect that retailers, governments and other groups will pay to be able to reach a broader swath of the population. While it isn’t clear how many people world-wide lack a street address, the fledgling companies say the number is in the billions.

MENA360 DWC LLC’s Fetchr works with several major retailers, and what3words Ltd. provides its global grid data to logistics companies, as well as governments, mapping agencies and relief organizations.

“The only way e-commerce is going to progress [in emerging markets] is for the delivery person to know where to deliver the package,” said Cathy Roberson, a logistics-industry analyst. “These companies are making it happen.”

Late last month, Dubai-based logistics company Aramex International announced a $3 million investment in what3words, which assigns a unique series of three words to every 10-foot by 10-foot square of the Earth’s surface. Aramex said it plans to use what3words for e-commerce deliveries in the Middle East, Africa and Asia. The investment was part of an $8.5 million round of funding, in which Intel Capital and two British firms also took part.

What3words, which was first used at musical festivals to help roadies find the right stages on which to set up their equipment, said it would use some of the funds to expand its services to 25 languages from 10. The tech company has already joined up with delivery and postal services in Brazil and Mongolia to reach neighborhoods and regions without addressing systems.

Dubai-based Fetchr uses the GPS location of a package recipient’s mobile device as an address. The delivery company, which operates in Dubai, Bahrain, Saudi Arabia and Egypt, has raised $12.5 million in funding from investors including venture-capital firm New Enterprise Associates.

OkHi Ltd., based in Nairobi, Kenya, has raised $1.1 million for its technology, which creates an “address” in a mobile app using a combination of a geographic location and a photograph of the customer’s front door. The company’s founders say they have reduced e-commerce delivery times by as much as 50% in Nairobi.

“This is an example of a leapfrogging technology,” said Dave Mount of Silicon Valley investment firm Kleiner Perkins Caufield & Byers. “These regions of the world could go from having really imprecise address systems to the most precise in the world, with the help of technology.”

Mr. Mount said Kleiner Perkins hasn’t invested in Fetchr, what3words or OkHi.

Emerging economies are the fastest-growing markets for e-commerce, as internet connections improve and more people gain enough disposable income to buy items online, said Sucharita Mulpuru, an analyst at Forrester Research. Upper-class and upper-middle-class consumers, who are more likely to have internet connections, are driving that growth, Ms. Mulpuru said.

“If there’s a way to crack open those other classes, it could have huge potential,” she said.

When a customer makes a purchase online via a retailer that uses Fetchr, he enters his cellphone number, which the technology uses to arrange delivery via its mobile app. As with Uber Technologies Inc.’s car-hailing service, the customer’s location shows up in a map within Fetchr, and the app then tracks the shipment and notifies the customer when it is about to arrive.

Co-founder Joy Ajlouny said Fetchr couriers wear orange shoes and orange backpacks so they are easy to identify on city streets. Their uniform includes shirts that declare: “We give a ship.”

“We’re hipster,” Ms. Ajlouny said. “We’re bringing a taste of Silicon Valley to emerging markets.”

Delivery companies and governments that use what3words can find anyone if that person provides the three-word “address” associated with his or her location, says Giles Rhys Jones, the company’s chief marketer. He said that can be entered in the address field on any e-commerce site and a delivery company will know how to find it.

“It’s a relatively easy thing to build into apps or back-end systems,” said Mr. Rhys Jones. “There’s not a lot of explanation required: You go to this map, find your 3-word address and tell us.”