Konga, the poster child of Nigeria e-commerce is pivoting to pure-play marketplace helping merchant list and sell via WhatsApp. As we found out this morning, customers can no longer “Buy” on Konga, instead, they can only “contact seller” and chat up merchant to finalize order.
This is displeasing as we are currently concluding a report on e-commerce in Nigeria and a possible way it can re-invent itself going forward. With the hope that market players can adjust their strategy in the new year and “think different”! We will publish that later in the month.
Layoff as sign of trouble
Back in July 2016, Konga made its first significant layoff, the CEO had stated as well that the company will be downsizing every six months. It also made a whopping 60% layoff last November, we also learned from an insider that some were let go silently in December.
Sometimes, size could be a burden and the new vertical which looked like it could turn around the company, could not live up to expectation. At its height, the company was doing N700k daily in the transaction but was too small to move the needle at Konga. It’s also said that company has made a significant investment in suppliers and couldn’t sell enough to justify the need for such an investment.
There are rumors that Konga is currently pushing to sell itself as current investors as refused to back it and money in the bank is fast depleting. An acquisition talk was (alleged) to have been held with Yudala but the talk has not proceeded positively in recent days.
What this means for the industry
Our view is that, for as long as humans use the internet, commerce will remain a thing. As such e-commerce will not die but will need a radical model to execute in this market.
With Paystack recent report of N2.7b in transactions in December (mostly from Merchants), then e-commerce is actually working but not at scale. The question is, what’s the best way to do e-commerce in Nigeria?