Nigeria grows online presence by 7% annually – Konga.com boss

Traffic can be a daily nightmare in Lagos, Nigeria, where the roads get so jam packed that a short journey can take a few hours; which is why Nigeria's emerging middle class is turning to online shopping. 

CNN’s Vladimir Duthiers reports on the country’s recent appetite for e-commerce, sits with Sim Shagaya;

Founder & CEO at Konga Online Shopping Limited in an exclusive interview- Excerpt

Despite poverty, political and ethnic divisions-- he believes the economic winds in Africa’s most populous country are blowing in the right direction: Nigeria has been growing at an average of seven percent over the past few years, it has an expanding middle class, and more young consumers have disposable income. 

But it's not just income levels that are rising, for some - from 2000 to 2010, the number of internet users rose from 200,000 to more than 40 million. The internet is as if not more profound force than the printing press, then the steam engine, and it represents a shift in the way society is structured and the way commerce is done.  Faced with those statistics, shagaya says starting an e-commerce business was a no-brainer.

I got to participate in what people were calling the first dotcom boom, doing a lot of work for online companies. The internet was really changing the way people were doing business and even how society was structured and that influenced me greatly. So when shagaya came back to Nigeria-- he launched konga.com. 

Konga is a retaileršits an online retailer that allows Nigerians to order someday anything they want, from anywhere in the country where we will be able to get it to them in as little as 24 hours or at most 3 days. That is our promise to them. But even with an expanding economic landscape, delivering merchandise across the country quickly and efficiently would mean navigating Nigeria’s physical landscape - a traffic choked challenge across crumbling roads that companies like amazon.com rarely if ever face.

 In Nigeria we don't have a functioning postal system in any real sense of the word. So Konga's greatest challenge has been to create that from scratch. We have basically had to build up a fleet of motorbikes and deliveryman, we have had to build up a system for getting goods anywhere in Lagos within 24 hours and anywhere in Nigeria within 72 hours and less and that's a huge challenge.

There are other challenges - credit card usage is growing but risks associated with online scams have kept Nigeria mainly an all cash society.  Only 10 per cent of Konga's customers use credit cards.  For the others it's cash upon delivery. Either way, buying online is catching on. And for Shagaya one advantage of doing business in Nigeria is costs. You will find out that Nigeria is an amazing economic environment to do business in. 

The margins are generally better than other parts of the world.  The cost of labor is generally cheaper than in other parts of the world. So you can do interesting things that you really couldn't do in the west and Konga is not alone.  There are about 70 online retailers in Nigeria selling everything from books, food & shoes to even used cars.  Shagya says he welcomes the competition.

And Nigerians likely do as well because it means competitive pricing-- and when it comes to shopping, they, like everyone else, love a good deal.

 The immediate sort of objective is to give the Nigerian customer the best price the best convenience the best selection of goods that anybody else can give them in Nigeria whether they are online or offline doesn't matter. You go on Konga dotcom, you find this Panasonic blender, you order it , we will call you to verify that order because in this part of the world, people want that human contact, you need to build trust with people. So immediately that order goes first to our customer care people who call you. And as soon as they check that you indeed want this good, in a few minutes really, there's somebody in the warehouse running around to pick that item for you.

 Shagaya employs 70 people - up from 10, just four months ago-- he says that comes from growing customer demand. But while the company is expanding, he knows that his country still has challenges: unemployment and grinding poverty remain major issues-- with more than 20 percent of the population jobless.  That number is even higher for young people-- driving crime and discontent. 

We are under no illusions that this was a one, two or three year journey. We knew that this was going to be a very long road to build out this system that we think we owe Nigerians to build out.  Our desire is to allow Nigerians to consume with dignity.

 I am not saying that what we are doing here is altruistic by any means, we're a business. But I think what we are also doing is building our country. What we are doing is almost a patriotic duty.

It is that kind of thinking Shagaya says, that has fueled the growth of great companies and industries around the world. He is hoping to continue that trend in his home country.

Brief About Sim Shagaya:

Sim Shagaya is a serial technology and media entrepreneur who has worked for Google, RealNetworks, Microstrategy. He holds degrees from George Washington U, Dartmouth and Harvard. He is the founder of DealDey, a Groupon kind-of group-buying site that offers its members in Lagos discounted deals on several kinds of products and services.

Day by day DealDey sends emails to members/customers about the latest discounts on consumables. When the required amount of customers is attained, members automatically receive a coupon along with details about their purchase’s collection.

With Nigeria’s internet market shaping up, customers are hoping to make the most out of the benefits of online shopping.

... Making SENSE of digital revolution!