Share

Space in your suitcase? App turns travellers into paid couriers

Sao Paulo - If you’ve ever visited friends or family in Brazil, chances are they’ve asked you to ferry something into the country - be it vitamins, the latest iPhone or even a kitchen faucet.

Now there’s an app that aims to expand that practice beyond friends and family and turn complete strangers into couriers. And profits.

Grabr, a three-year-old San Francisco-based startup, puts travellers in touch with consumers and helps them work out the logistics of buying and handing over goods. In the simplest of terms, it’s both a rental agency for spare luggage space and a delivery service. Or it might be considered a newfangled courier service.

Taxes and import fees are high in developing countries like Brazil, and access to goods is limited. Recently, to make matters worse, airlines imposed tougher weight limits for luggage. International travellers must now dig into their wallets if their baggage exceeds 22.6kg, versus the prior cutoff of 31.7kg 70 pounds.

"People will wait for family or friends to travel and bring things back for them,” Grabr’s Brazil head Michele Chahin said in a phone interview. “We are bringing technology to something that comes naturally for Brazilians.”

How it works

The platform is designed to protect both sides. The traveller makes the purchase, the buyer pays, and the app holds onto the funds until both parties meet up and confirm all is correct. The buyer pays a previously agreed-upon price to the traveller, and Grabr takes 7% off the top as a fee.

Buyers typically save at least 30% on goods compared to local prices, said Chahin, who is the only Grabr employee in Brazil. Grabr, which competes with other apps including PiggyBee and Backpack, has overseen the ferrying of more than 350 000 deliveries globally since operations began, from Moscow to Ho Chi Minh City. Last year, 40% of deliveries went to Argentina and 30% to Brazil, Chahin said.

The market is bigger in Argentina, for now, because residents there have less access to certain products. In Brazil, goods are more readily available but taxes on imports can be painfully high. The most in-demand products are electronics, including anything made by Apple. Makeup, hair products and collector’s items are also popular.

Grabr wants its clients to adhere to local regulations and pay necessary customs fees. The app has links to websites of customs agencies around the world. “Users are expected to work within the limits,” Chahin said.

More funding 

Last week, Grabr received $8 million in funding led by Foundation Capital and said Foundation general partner Charles Moldow will join the board. Prior investors include Founders Fund and SignalFire. The company said in a statement that it plans to use the new funds to introduce new features and hire more staff.

Sao Paulo resident Allan Castellon loves the app. During the holiday season, the 35-year-old used Grabr to buy Megablast speakers that he says aren’t sold in Brazil. He paid $159 plus a delivery fee of about $20. Castellon, who works at Triple S Cloud Solutions, estimates that a similar product sold locally would cost around $900.

“Our taxes are so high here, it makes things so expensive,” said Castellon. “Maybe the government will pick something up from this and realise things need to change.”

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.87
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
+0.1%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent-ruolie
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders