This is from its interim 2016 report that covers Q1 - Q3 activity. A considerable volteface from the last report in which it essentially threw Konga and it’s valuation under the bus, and caused not a few headaches across the entire ecosystem.
Konga is progressing well on its path to profitability and reached break-even before overhead costs for the first time in September 2016. Active customers per end of August increased by 5% compared to last year, as Konga focused on improving operational efficiency.
The full report is here. Skip to page 8 for Konga.
E-commerce platforms like this in Nigeria are still yet to accept how Nigerians PREFER to buy stuff. We are still doing copy and paste around here…
After burning on advertising, “they” achieved 5% customer growth Y-o-Y. That means without paid advertising, the number of active customers would have been -%, what does that say about the current e-commerce model in Nigeria?
They will all continue to achieve NEGATIVE NET INCOME until they change something.
One is even doing “Big Brother Nigeria”.
I’ll like to see them spend $0 on paid advertising for three months straight and check what happens (if they still exist).
My Own Experience & Confession: Throughout last year (2016), Sharphire spent less than $3000 combined on paid advertising of all its services (500dishes took over 90% of it). Guess what, of all our services, the only service with “a flatline” in terms of revenue growth has the same business model with the likes of Konga & Jumia! (500dishes)
… The rest grow at an average of 23% monthly in hardcore revenue (with virtually $0 in paid advertising). Throughout 2016 we ran 100% on our revenues and are still growing beautifully.
I MIGHT BE VERY WRONG, BUT FROM WHAT I’VE SEEN, WE ALL NEED TO START AGAIN AND REBUILD ONLINE SHOPPING IN NIGERIA FROM THE GROUND UP TAILORED TO THE AVERAGE NIGERIANS BUYING HABIT, IF NOT!!!.
Konga is being slaughtered by Jumia. Its as simple as that.To the victor goes all the spoils. Jumia’s numbers on e-commerce is really what one has to look at.
The answer is in the truth. What was the last thing you bought offline/physically or directly from the merchant/seller (that’s available on Konga or Jumia), and why didn’t you order them from these extremely popular platforms?
If we all start sharing our reasons on this thread, I’m sure something awesome will come out of it.
If I want to buy a tv, i’ll go to a samsung, LG or sony store. If I want to buy clothes, I go to asos, macys or zara. When the dollar became crazy, I got family in the abroad to help. Also, for clothes, I have a couple friends who are “fashion designers” who I patronize from time to time.
The truth is, I never feel I can get a decent deal from Jumia or Konga. I don’t think the Nigerian market is ready for marketplaces. Does Jumia accept responsibility for merchants fuck ups? Is their logistics on point?
One more thing, the average Nigerian’s buying power is very low. There’s only so much we can afford.
On the paid advertising, these guys really spend way too much on it. I guess they have a budget and must put it to use.
This is wrong and i don’t believe it’s the problem. Amazon wouldn’t exist if jef had listened to this. But this:point_down:i believe is the real problem.
When you ask people why they dont buy online, they dont complain about price but quality of service and product. And these coys only made things worse by introducing pay on delivery.
This problem can and will only b solved when Nigerians begin to embrace local content. But no we all want to wear gucci and prada!
This is what I’ve been saying since, you’re still talking about “Amazon” (a foreign company).
Why does it seem that Nigerian Merchants are the worst? Are Uber drivers not Nigerian? Are the hotels on hotels.ng not Nigerian too?
… So you see that there’s more to this.
I used Amazon as an example because they have been around for along time(20yrs+)and I’m pretty sure they didnt get it right fron day one and course corrected as they moved on. Payporte is one company that i think is trying.
My point is alot of folks don’t buy online not because they are afraid to use their cards online or cannot afford the service( infact most will pay more for better quality of service) but nobody wants to order an egg only to receive a quail egg and when you ask for a refund it becomes a problem.
We both know that this is not a merchants fault but that of the company. The quality control dept is the most important dept in every customer service driven business but most chose to ignore.
I will gladly wait for one or two more days if i order a product on konga and i get a feedback saying the quality that was delivered by the merchant was of low quality and i should be patient for a better quality. Any sane person will be patient.
So no, i diagree that Nigerians prefer to buy stuffs offline. They do this because this companies do not have better return policies and quality of service.
My Guy this is the general status of e-commerce today. (I’ll use Konga as a placeholder for “marketplace”)
I’ll give you just 2 sample cases that cause problems in this space even with awesome merchants (these are not the cases all the time).
Case 1
Konga (and friends) spends $20 to get you to order a lovely shoe.
You pay online/on delivery (in most cases the merchant calls you first) … the deal is complete/you’re satisfied (Konga’s commission is $5 after spending $20 - they hope you’ll keep coming back).
Next week, you want to buy another shoe, but because you loved the last merchant so much (and you now know the merchant’s name) you try to find the merchant directly so you can talk and negotiate or get a better deal.
The merchant welcomes you directly with open arms. Questions to Ask in Case 1:
Why do people prefer to talk and buy directly from a Merchant?
Why should the merchant not sell directly to you this time without konga?
Case 2
Konga (and friends) spends $5 to get you to discover a lovely shoe online.
You get the name of the seller (under the shoe listing) and actually google it
You find the merchant on Instagram (get the phone number) both of you discuss, the funny thing is that you might even pay before delivery … the deal is complete/you’re satisfied (konga got $0 after spending $5).
Questions to Ask in Case 2:
Why did this person go through the long process to find the same Merchant?
Why did the merchant not direct the customer back to their Konga seller page?
AN IMPORTANT INFORMATION THAT SHOCKS ME
Right here in this same Nigeria, the sheer size of transactions (GMV) that happens daily on Instagram alone is more than all e-commerce marketplaces combined, why?
I think the “One” doing Big brother naija isnt a bad idea for advertising- millions of Nigerians watch that show. And it all depends on how was spent to sponsor the show.
I see what you’re saying and you’re pointing to a problem but you’re not suggesting a solution, neither are you pointing out the supposed behavior of Nigerian customers which the e-commerce companies are missing. This can lead anyone to think you don’t know the answers to your own questions. Am I correct?
I always wonder why this is. Jumia has like 70% market share. Considering Konga launched before Jumia, I wonder what went wrong for Konga in that aspect. What’s Jumia doing that Konga isn’t? Cos it looks like the exact same model to me and the paid adverts look to be in the same quantity overall. So what’s the catch?
Pedant alert, but only two people know the answers to the questions they ask. Examiners and assholes.
To be very honest, there is a lot of “weird” behaviour when it comes to e-commerce, even for self-described digital natives. I pay with my card on Supermart because I know that if story enter the matter, last last, I will get a refund or store credit. Same with Printivo. With Jumia and Konga on the other hand, I’m dealing with unverified third parties 99 percent of the time, and I’m never handing over the cash until I’ve verified the goods. I’ve had to reject orders because what got shipped to me wasn’t quite what I was led to believe I was getting. The marketplace model is great for scale but sucks for trust, and that’s where things become really tricky.
This is wrong and i don’t believe it’s the problem. Amazon wouldn’t exist if jef had listened to this. But this:point_down:i believe is the real problem.