By Pascal Oparada
The possible merger of Yudala and Konga is set to rule Africa’s e-commerce industry, findings by Theniche reveals.
Konga was recently acquired by Zinox, owned by Nigerian businessman, Leo Stan Ekeh. His son, Nnamdi, is the chief executive officer of Yudala, one of the biggest online shopping companies in Nigeria.
Last year, it raked in over N200 million in revenue.
This is in contrast to the global loss of over $40 million in 2016 by Jumia, another big player in the industry.
Naspers, the broad-based multinational internet and media group, offering services in more than 130 countries, shutdown another e-commerce company, OLX, in Nigeria, recently. The coast is now clear for Jumia, Konga and Yudala to dig their feet in and fight for the huge market share of Nigeria’s e-commerce industry.
OLX joins Efritin Nigeria which closed shop in 2015, citing high cost of doing business as reason and the likes of Traderstable and Ady to exit the sub-sector
Naspers made it big when it invested in China-based Tencent. But repeating the luck in Tencent has eluded it for years.
From Mocality to Kalahari, from Konga to OLX, it has struggled to repeat China in Africa, says Ndubisi Ekekwe, a tech analyst in a post on LinkedIn.
The e-commerce sector would see massive redesigns in coming years as Yudala and Konga both owned by one family join forces.
With Konga, which has also seen investments from Naspers and owning about 36 per cent of the market share in Nigeria, if combined with Yudala’s 30 per cent share, other e-commorce companies like Dealdey and Jumia would just be playing catch up.
Mark Zmyslowski, co-founder and former global CEO of Jovago, now Jumia Travel said , “The slide I was using three years ago predicting the real winner of Konga/Jumia fight will be Yudala, unless they change their strategies”.
But Konga seems to have done just that, by selling itself to Zinox. It appears that the only way for Konga to continue on its trajectory of profit is to merge to become a leading e-commerce force in Africa.
KongaPay would be used by Yudala, which is yet to develop its own payment system to drive sales, while the logistics arm of Konga, Koga Express, will be used in delivering to customers real time.
But unlike Jumia, whose presence is pan-African, Yudala and Konga are limited to the Nigerian market alone.
“This is not a problem to both companies because Nigeria has the population to sustain them”, says Justin Ekeoma, a tech analyst.
“What is important is that Konga and Yudala must join forces if they wish to upstage the hard-fighting Jumia”, Ekeoma said.
Recent reports indicate Amazon and Ali Baba, the two biggest e-commerce firms in the world, are already looking at the market in Africa and in Nigeria in particular.
It will be good for Yudala and Konga to form strong partnerships to ward off these two giants.
