Sim Shagaya: Building Konga, Africa's Version Of Alibaba – Part One

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Chatting with Simdul Shagaya is like an intense, super-charged colloquy on doing business….in Africa. “We are the custodians of the dreams of the middle-class of Africa,” Shagaya emphasized repeatedly, as he talked about his fast-growing e-commerce company, Konga.com, that he founded just 2 years ago, July 2012. With his ambitious goal of making Konga.com ’the engine of trade and commerce in Africa’, the e-tailer’s dynamic founder and CEO is betting big that Africa is poised to be the next frontier for online retail. Notwithstanding failed attempts with a dating site (alarina.com), a job placement site (jobclan.com), a classified site (gbogbo.com) and media streaming service (iNollywood.com), “the timing was wrong. These startups were just way ahead of their time”; the experiences and insights gained from these entrepreneurial endeavors however, would eventually enable the Harvard M.B.A graduate to pioneer the online industry in Nigeria, particularly e-commerce retailing. “Konga, through hard work, innovation and an all-consuming desire to better the lives of this society through technology, leads the field in Nigeria today in Gross Merchandise Value (GMV),” said Shagaya, who also launched a sprawling e-commerce platform, Konga Marketplace in 2014 with the aim of becoming a provider of e-commerce infrastructure services for all e-commerce market participants.

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Chatting with Simdul Shagaya is like an intense, super-charged colloquy on doing business….in Africa. “We are the custodians of the dreams of the middle-class of Africa,” Shagaya emphasized repeatedly, as he talked about his fast-growing e-commerce company, Konga.com, that he founded just 2 years ago, July 2012. With his ambitious goal of making Konga.com ’the engine of trade and commerce in Africa’, the e-tailer’s dynamic founder and CEO is betting big that Africa is poised to be the next frontier for online retail. Notwithstanding failed attempts with a dating site (alarina.com), a job placement site (jobclan.com), a classified site (gbogbo.com) and media streaming service (iNollywood.com), “the timing was wrong. These startups were just way ahead of their time”; the experiences and insights gained from these entrepreneurial endeavors however, would eventually enable the Harvard M.B.A graduate to pioneer the online industry in Nigeria, particularly e-commerce retailing. “Konga, through hard work, innovation and an all-consuming desire to better the lives of this society through technology, leads the field in Nigeria today in Gross Merchandise Value (GMV),” said Shagaya, who also launched a sprawling e-commerce platform, Konga Marketplace in 2014 with the aim of becoming a provider of e-commerce infrastructure services for all e-commerce market participants.

sim shagaya konga

With over 10 years experience in new media and investment banking, Shagaya, whose corporate Africa stints include Google GOOGL +0.89%, Lucent Technologies and Rand Merchant Bank in South Africa, launched e-Motion Advertising in November 2005, a Lagos-based integrated marketing and communications agency. In March 2011, the serial entrepreneur then founded Dealdey (Africa’s answer to Groupon GRPN -1.47%), which grew to be Nigeria’s leading daily deals site. Spotting a gap in his native country; “Nigeria is a market with deep mobile penetration and fast growing access to the internet,” coupled with the fact that the country’s largest city, Lagos with a population of 21-million people making it the epicenter of one the largest urban cities only has two world-class shopping malls, the Palms, which opened in 2005 and Ikeja Mall, in 2011, Shagaya swiftly launched Konga, a spin-off from Dealdey. His primary goal with Konga, was to aggregate the youngest and fastest-growing market that was dispersed, under-served and that traditional retailers were simply failing to reach; “Konga is a word that is found across the numerous ethnic groups on the continent. To the Yoruba’s of Nigeria, it means a ‘water well’. Something that everyone uses….everyday.” And everyday, consumers in Nigeria and across West Africa started to log onto Konga.com for products that they otherwise were purchasing in physical retail stores.

The serial entrepreneur knew he was really on to something with his then-new venture when their “servers crashed at 8am that morning during Black Friday, or Yakata Sales, of 2013,” he explained, recalling Nigeria’s largest e-retailer’s near sales miss at the start of the 2013 holiday shopping season. Yakata, which is a Nigerian colloquial term meaning “final” or “complete” pioneered and localized the concept of Black Friday within the Nigerian and West Africa e-commerce industry. The response for Yakata sales, which ran for 5 days, from 27th November to 1st December, was overwhelming. “We had planned for 2x the amount of regular traffic – based on surveys we had carried out – however; we had well over 16x regular day traffic, more skewed to the male demographic. It turned out Konga was much more popular than we realized,” said Shagaya, who is from Plateau State in north-central Nigeria. On that day, according to Shagaya, sales revenues had skyrocketed at an astounding rate within six hours. Since then Konga.com’s sales have grown at a meteoric pace, “we sold more goods in the first 6 hours of Yakata Sale than during the entire previous month of October 2013.”

Fast forward to Konga.com’s 2014 Yakata sales and this time, 50 Million Naira (USD $273,201.46) worth of orders were processed every hour with more generated from the e-tailer’s mobile app. “We received a total of USD $3.5 Million worth of orders during 2014 Yakata Sales. This compared to USD $300,000 for Yakata in the previous year. We were particularly pleased by the fact that a large part of the volume was channeled to small and medium-sized businesses,” said Shagaya. Similar to Black Friday and Alibaba’s Singles Day sale, the key drivers of the Yakata sales revenues were “electronics; laptops, phones, and tablets. Games such as play-station also sold out quickly. For us, the trend also extended to fashion with people looking to update their wardrobes for the ‘end-of-year’ festive season”. With the ambitious goal of making Yakata sales a pan-African shopping event, Konga is the most visited online shopping site in Nigeria according to web ranking company SimilarWeb surpassing competitor Jumia. The region’s leading e-tailer is listed in the top 10 most-visited websites in Nigeria at # 8 ahead of Jumia at # 10, Twitter TWTR +0.5% at # 13 and Linkedin at #14.

To comprehend Konga.com’s phenomenal growth story is to understand the dynamics at play and the man and the team driving the vision behind Konga.com. Nigeria today and indeed much of Africa is very similar to the United States at the end of the 19th century; the U.S. was undergoing rapid transformation and economic growth characterized by expansion of the railroads, initial deployment of the federal highway system and rush of technological innovations and inventions. As the country industrialized and expanded, a middle class started to emerge even though poverty was still pervasive. Additionally, the traditional retail business as we know it today in the U.S was practically non-existent then. At that time, consumers patronized small independent retailers and bought goods from these locals merchants who offered a limited selection. “Sears, Roebuck & Company rose against this backdrop. The story of Sears spans a hundred years and in many ways, it rode the growth of the United States,” said Shagaya as we talked about the ascendancy of online retail that is poised to leapfrog and disrupt the brick-and-mortar retail business models in Africa. “I really believe that the Sears-U.S. story is analogous to the Konga-Africa story. It will take time and effort but we have an opportunity here to tell the story of the rise of Africans out of poverty aided by powerful information technology. Sears rode the steam engine, electricity and the rise of U.S. manufacturing. Konga will ride information technology, electricity and growing African manufacturing.”

While the West, particularly the U.S provides great insights on how to build a business or an industry from the ground up; the trajectory of China’s economic transformation however, closely resembles the transformation taking place on the continent. Both Africa and China leapfrogged to mobile phones, bypassing the building of the infrastructure for land-lines. Currently, China’s entire retail infrastructure is leapfrogging to e-commerce, circumventing the process of building a national network of physical retailers. Shagaya is increasingly looking East, particularly China and specifically e-commerce behemoth Alibaba, on lessons on how to harness the power of internet commerce for Nigeria and Africa; “we think technology will be hugely redemptive for Africa and will unleash the already existing entrepreneurial energy of this part of the world.”

* 1 USD = 183.015 NGN

 

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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