Among these stimuli is e-commerce.
Africa is witnessing quantum leap in internet penetration
and increased deployment of internet-enabled handheld mobile devices. This is
the fuel driving up e-commerce on the continent once considered a clear
outsider in the tech-driven e-commerce ecosystem. At the cusp of the growing
e-commerce market in Africa is Konga, trading under the name konga.com. Since
its acquisition in 2018 by Zinox Group, in one of the most discretely executed
corporate ‘coups’ and seamless acquisitions on the continent, Konga has
continued to beat the odds and confound book-makers.
Within the first two years after its acquisition, Konga had
re-invented itself, growing its turnover by over 800 percent, cut inherited
serial losses and re-focused its corporate values by being more customer-centric,
while deploying superior technology to achieve more. Leveraging
light-years-ahead technology, Konga has been able to run lean and mean,
delivering last mile in real time ahead of the competition and offering a new
threshold of value-for-money in a manner never before witnessed in Nigerian
e-commerce bourse.
E-commerce business all over the world comes bundled with
several complications. It’s expensive usually with initial huge losses. It’s
technology-demanding and requires conscious long-term investment and patience.
To ride the tide, operators must work round these treacherous complexities
which include heavy investment in back-end technology, innovativeness to adapt
to fast-changing consumer tastes and technical paradigm shifts. All of these
would require seamless and steady retooling of strategies.
In Africa, e-Commerce is largely the playground of the
youths. A huge chunk of the patronage comes from the youths, the nouveau riche,
the upwardly mobile, dashing generation of purpose-driven, career-minded men
and women who have little time to spare on making physical, in-shop purchases.
Konga appeals to this group because its leadership is driven by young men and
women who understand the tapestries and nuances of multi-tasking and time-management
in the modern era.
Konga’s ownership is truly Africa. This gives it a
head-start in the continent’s e-Commerce space. It has been able to combine
indigenous manpower with a network of quality foreign technical service
providers. An e-Commerce house is as good as its back-end. Top e-Commerce
outposts in the world who have remained at the cutting edge of competition
despite the inevitable turbulence share a common denominator.
They are the ones that spend big on infrastructure. Back-end
infrastructure and manpower capacity drive the process. Konga understands this
and has spared nothing in upscaling its infrastructure and upskilling its staff
to global standard. Within the first two years of its acquisition, the
investors quietly and deliberately built top-notch nationwide facilities and
restructured the firm’s technologies to fit into the new vision and ambition of
emerging as a global brand.
On May 1, 2018, barely three months after its acquisition,
Zinox merged Konga.com with its omni-channel retail outfit, Yudala. The product
of that mega-merger was a swifter, bigger company which retained the brand
name, Konga. This was how arguably the biggest e-Commerce and retail company in
Africa was born. But beyond that, Konga has continued to astound market
watchers with its innovativeness in payment services, delivery to last mile and
a steady decline in inherited market churn.
Statistics clearly show that soon after the acquisition,
Konga customer churn dropped considerably. Customer churn is the rate at which
customers stop doing business with an organisation. It’s the percentage of
subscribers who discontinue their subscriptions to a service within a given
period. In the e-Commerce market, customer churn has been a big issue as some
customers after experiencing unsavoury transaction with an e-Commerce house,
not only discontinue patronage but enlist to share their ugly experience with
friends and people in their network (professionals, business associates and
partners etc.) and, in the process win them over to also discontinue patronage
of that organisation. This has been one of the downsides of some e-Commerce
companies: their inability to retain existing customers, let alone grow their
customer base.
A couple of factors are responsible for this. Lack of
customer satisfaction, late and untimely delivery of goods to clients, foisting
substandard products on customers and poor customer care service are among the
reasons for customer-hesitancy and eventual withdrawal of patronage. This is at
the root of the poor marketplace performance of many e-Commerce outposts. The
new owners of Konga have overcome these drawbacks, using high-end technologies,
leveraging on their affiliations with global original equipment manufacturers
(OEMs) and clear understanding of the Nigerian environment.
A Handy Advantage Of The New Konga Is The Combination Of The
Online E-Commerce Strength Of Konga.Com And The Nationwide Branch Network Of
Yudala. This has helped them to deliver a truly omni-channel retail for the
first time in Africa. The heavy behind-the-scene investment in infrastructure
within the first 18 months of acquisition coupled with the reliance on physical
Experience Centres (neighbourhood well-stocked physical Konga stores) largely
ignited the fire of sustainability and profitability. This explains the miracle
of Konga breaking even barely three years after the acquisition.
A combination of these factors plus the company’s ability to
disrupt the market form the basis for the new push by Konga to list at the
London Stock Exchange (LSE). Analysts believe that with its strong showing in
Africa, Konga listing on the LSE would raise the bar for African investors
hunting fortunes in the global market. It’s considered the game-changer for
African investors. Konga, as an African brand, has shown capacity to adapt,
innovate and create value for both customers and investors. Going global will
only help its team of young outliers rack up return on investment as well as
improve the continent’s business profile on the global investment index.
Data from Statista, a renowned statistics portal, reported
that the total value of e-Commerce in Africa grossed $16.5 billion in 2017 and
is expected to hit $29 billion by 2022. It’s no surprise that Konga has become
the fastest-growing e-Commerce house in Africa. This further underscores the
United Nations Conference on Trade and Development (UNCTAD) e-Commerce Index
Report 2018 which placed Nigeria, South Africa and Kenya as accounting for more
than half of the online shoppers in Africa.
Nigeria is reputed as Africa’s largest business to consumer
e-commerce market in terms of both number of shoppers and revenue and Konga is
at the core of this market volume. This is what it’s taking to the global
market: an ingrained ability to re-invent itself at all times, innovate through
the contours of competition and grow its customer base. When tomorrow comes and
Konga, the e-commerce heartbeat of Africa, lists at the LSE, Africa would have
made a bold statement: We are not the continent ruined, we are the continent
ready to roll.
Author: Ray Umukoro, pan-Africa ICT blogger, writes from
Lagos