Wednesday, January 14, 2015

Sim Shagaya: On Building The Next Big Thing, Konga, Africa's Version Of Alibaba - Part Two

Following part one's coverage of Nigeria and West Africa's # 1 online retailer; founder and CEO, Simdul Shagaya, describing the growth trajectory of his fast-rising company said, “our progress so far simply speaks to what happens when you have this incredible focus on the needs of the customer. Retailers manifest the dreams and aspirations of customers.” Konga's laser-like focus on the customer (Amazon has similar strategy) is remarkable given that the odds against Shagaya and indeed most entrepreneurs in Africa are manifold and daunting; in Nigeria and indeed much of Africa, logistics is a huge challenge due to lack of relatively well-developed infrastructure (African countries typically conduct only about 10 per cent of their trade with each other), the continent is not a manufacturing hub and relies heavily on finished products typically from the East and the West (natural resource extraction contributes more that 30 percent of Africa's GDP with very few industries on the continent adding value to their natural resources), low trust which diminishes transactions between buyer and seller (given the lack of digital-payment penetration across the continent, most consumers still pay with cash while a small percentage of people in Africa enjoy the convenience of card-based, online and mobile payments and banking); barriers to e-commerce in Africa seem insurmountable. “The primary challenge in Africa is the absence of coordinated and structured logistics networks. Logistics does exist in a chaotic, unstructured type of manner. And one of the greatest challenges Konga must tackle will be to bring order to this frenzied, unstructured energy of logistics that currently exists in the market,” said Shagaya.

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