Marketplaces won’t work in Nigeria. What can work is niche ecommerce sites
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Hello everyone. I think it’s imperative to note a few things.
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Profit making at the expense of Customer Satisfaction is a horrible business model. In today’s society customers are driven by trust. You could have the largest e-commerce website in Africa and still have low customer retention.
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E commerce companies like Jumia and Konga rely on a lot of vanity metrics. You could have 1,000,000 visits on your website in a month but that doesn’t translate to customer retention when only 1000 transactions are successfully carried out on the platform, out of which 500 of the purchased products are returned. At the end of it all only 100 customers would return to your online store next month when they need to shop for something.
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Nigerian online shoppers are highly under appreciated which is just terrible. On any of the aforementioned companies their employees especially the logistics guys treat customers without any form of empathy. A good company culture that emphasizes empathy i believe is the solution here.
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I disagree that online marketplaces won’t work in Nigeria.
a. A good business model+A bad market, market would ALWAYS win.
b. A bad business model+A good market, market would ALWAYS win
c. A good business model+A good market, RECIPE FOR SUCCESS
d. A bad business model+ A bad market, RECIPE FOR DISASTER
Unfortunately, a,b and d are only the models which we are ever so unfortunate to experience -
Finally, Inorganic growth is not sustainable and in most cases the high costs of marketing and customer acquisition outweigh the gains. Imagine if Facebook had to pay to create awareness about their brand would it currently have over 2 billion users? My Recommendation, Organic growth it’s slow and difficult but well worth it!
Adios guys, gotta run.
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You nailed it here.
In addition, Those 2 giants are fighting a battle of scale and sadly new commers are too lazy to offer what’s lacking rather they pick up the bad habits hook-line-sinker.
My recommendations;
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Grow emotional equity within your vendors. Make them rockstars and they’ll un/consciously become your brand ambassadors. Let them FEEL you are doing everything for them.
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Create an enabling environment for commerce. Let’s customers prefer shopping on a seller’s store on jumia/konga to that of the seller directly.
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To botres point 2, let customers see you as their superheroes against any seller dat delivers below par service or product. Customers will love and become your ambassadors.
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Allow the vendors take the Glory while you take the commission.
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Who competes against his own content providers? We shouldn’t know jumia, we should know Kelechi’s STORE ON JUMIA/KONGA. By this, customers are smart to know that but for Konga/Jumia, Kelechi would have insulted or sold them bad product.
There’s more but yeah, it’ll soon get boring… Anyways in summary, they giants and others are struggling because they Ignore their #1 customers - THE VENDORS/SELLERS - and go after spending on #2 - buyers.
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This 
. Enter Frontdesk. @somtoifezue
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Lool Oga Sir, I’m not trying to “brag” about my company’s growth. It will be foolish and pointless.
All I was trying to say in that post was that “of all our services, the only one that is performing poorly has the same business model of konga and jumia, this is 500dishes”. Even if they all have 10 customers each per month, 500dishes has just 1, and it has eaten the most money.
Please let’s tell ourselves the truth, THERE’S SOMETHING SERIOUSLY WRONG WITH THAT BUSINESS MODEL ONLINE HERE IN NIGERIA AT THE MOMENT, AND IT CAN BE IMPROVED!!!.
… and please please stop mentioning dealdey here. 
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Being a bit messy in our thought process an help us achieve more realistic results.
For the high end Nigerians
Konga’s website looks like Cow Dung compared to amazon, asos, zara, and even Jumia. I don’t know how you can gain the confidence of this group of Nigerians with a website like that. The guy that says he shops clothing on asos - Its the overall showcase of clothing. The model wears it, he sees the fit. That is compelling. So if I got the chance to speak with the engineers at Konga, I would ask them to tell me if they genuinely think the high end Nigerians [Those who consider themselves stylish - even though they are mostly broke :)] are properly catered for in the quality of what they put on display. So this goes back to engineering. The reference to sales on instagram is a reflection of this group of people. These stylish Nigerians on IG believe in the power of great pictures. They see these lovely pictures and are compelled to place order by paying into an account of someone with the hope that they will deliver the product. They dont need “Pay on delivery”.
For the MMM level Nigerians
I cant speak for them because I feel disconnected. But i think MMM gives them a tip if they introduce people to MMM. Isn’t that a clue to how marketing works in grassroot Nigeria. Offer the ones who have tried your service an instant tip of 10% for every referral and lets see If these MMM people will respond. I shared a post about the power of instant topup for mobile app referral as we observed with our applications. Only problem was - We didn’t have the engineering service quality for customer retention at the time. Summarily we were atracting new customers but unable to serve them.
And speaking of customer service, why dont we have products from LG (Samsung, slot and the major offline outlets) listed and tagged “certified - guaranteed delivery from LG Shop with 1yr warranty - Call 08021234567”. if i see this beside some phones and dont see it beside others, I am going to be definitely reassured. The number can just be a konga CUG number. Does not have to be the merchant.
Why dont they focus on those major outlets by having a special team that will also ensure the number of pictures of offered products from those stores are sufficient to convince the site visitors. Also, those products should have a special tag that differentiates them from the “pure water merchants”.
Personal Experience in 2015 - I wanted to send a gift of a 65inch LG TV for someone. It was offered with a double door fridge. The price on jumia was same with konga +/-N1000. But the LG shop in Port Harcourt had it for extra I think 70k. I still bought from LG Shop. I was just thinking of stuff like 'What if it breaks down after 2 months? I don’t want the guy sending emails to Konga or Jumia.
Yes they listed the 1 or 2yrs warranty but that product listing was not convincing. They should have special products with special support numbers or something that makes these products clearly distinguished.
If people share their personal experience, it all boils down to the inability to convince buyers and/or poor service after purchases.
Advertising and bringing in people you cant serve is a waste of resources.
Those vendors offering crap should be killed. There is no point opening up to vendors who advertise 4piece bedsheets and deliver 1piece like I experienced with my first Jumia purchase which convinced me that Jumia was a waste of time. Hold the money and dont pay vendors until quality is assured. If the vendors leave, fine, but the few who will remain will deliver quality.
Unfortunately, most Nigerian companies are staffed by people who start off being very defensive when you give them a -ve feedback.
Personally, I have told my team to prioritize negative feedback over positive feedback because positive feedback is of no relevance when there is no ego to serve.
So I don’t think the problem with ecommerce in Nigeria is the model.
The business owners are just tolerating a lot of stuff probably due to the emotional train associated with our tribal and religious issues.
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Sir, you’re getting what I’ve been trying to say since, thank God 
Hope you are aware that your entire post suggests a change in the model in general?
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Maybe the Nigerian consumer market is in a nascent stage.
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People under estimate the blow back from the current recession. This isn’t any recession; its one where while income is’t rising, overall cost is. Nigerians are SIGNIFICANTLY poorer today than last year.
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Ad spending has been drastically cut from what I hear though hard numbers will be nice to see
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Organic growth is the best approach but qualitative KPIs must be improved on such as the customer experience. Konga needs to consistently deliver a better service
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Pay on delivery was a terrible idea by those early eCommerce execs who wanted to jump start these websites on a bubble. Also I do not agree with free delivery. Nothing is free in life. Jumia, Konga and many others who are struggling now failed to understand Nigerians.
MTN, Glo and others stopped taking huge losses when they stopped the “free” marketing strategy. They now offer bundles and packages instead of aimless promos that only makes things worst
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I don’t agree with this
Most importantly, negative feedback let’s you know what you are doing or did wrong
What’s your counter argument. I’ll love to learn
I’m curious, why do you say that?
Do you know any seller on Amazon?
Yes I do know some. However, I prefer to use Amazon directly cos they have made the marketplace safe for me
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My addition to this is discussion is that, I think it would better serve Jumia/Konga if they were the vendors at first offering products the way Amazon does. That way the have control over the quality of product and possibly after sales service they would offer to the customer
OR
Both companies should pick a niche category that they can focus on whilst the improve the quality of their marketplace vendors for other niches.
Side note: No offense to the Konga web developers (am hitting Konga as I use them more as I hardly visit Jumia) as I presume some of them would be on this forum but your search is downright atrocious to say the least. You would search for something, filter it to relevant items, yet it brings up irrelevant items. For instance how does an iPhone show up in a search for a Samsung phone?
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Random: Re: Konga’s search: I wanted to buy a poker set at some point so I typed ‘poker’ in the search box and what results did I see? Polka dot blouses.
[That’s mostly the merchants’ fault but I was under the impression that QA/content management/etc should include spellchecks.]
So banks we arrive at the crux of the matter…
.Trust on Product Quality ( Shops listed on Marketplace must have a Trust policy or Refund policy so that if customers taste isnt met, they send another product according to taste)
REMOVE POD COMPLETELY( when u go to Sabo market to buy u dnt buy on credit you pay, if people will pay for Goods they have the right to ask for seamless good customer service and you have the responsibility to meet up) ,
Get better at Lock-in Strategy…For us is if we give you a bad experience and internal investigation show is our fault we re-do your job FREE of charge, if the mistake is yours we negotiate a discount to top up, in cases we give you a discount on next order, this is simply to keep you coming back)
I dont shop online because i haggle a lot and the online experience doesnt give me that chance to do so, according to Phillips consulting there are what 30 million middle class nigerians you can only target bombarded by 17-20 million SMEs according to SMEDAN and NBS and Ads from everybody from Jiji to Konga.
We naturally will find the cheapest products of high quality, sweet customer service, fast turn around and better operations.
But i think Konga needs to really work on a hybrid model where they focus Strongly on Offline( A Mall/Shoprite Competition is one idea) then take people online and reduce money spent on billboards and focus on Trade show and Yard Sale meetup events.
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Theres nothing free its how they package to you that its free.
Amazon and now Walmart Ecommerce may offer you free delivery but the cost of delivery has already been factored into CP and SP( cost price n selling price) when they calculate margins they can reduce n use volume to counter balance expenses , our Guys have not learnt how to provide Good Experience in shopping online( Thousandss of angry customers daily shows you QA/CS isnt looked at from a revenue standpoint, hence they will keep getting it bad.
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What if I told you there is no e-commerce. There is no e-commerce.