Thursday, August 16, 2012

Kasuwa, Jumia, Konga, Kalahari and the business of making money online in Nigeria

I have always wanted to write something about this group of people for a while. They have something in common. They are e-commerce sites and they are modeled after the success of Amazon is the world’s largest online retailer and one of the most successful internet empires on the face of the planet. However, duplicating Amazon’s success has been a bit of a challenge in sub-saharan Africa. Naspers closed its operations in Nigeria in 2011 after stating that its ability to make near-term profits wasn’t probable. It shut down in both Nigeria and Kenya at the same year. It commenced operations in Nigeria and was only alive for twenty months. It sounded like a less-strategic move as one would wonder “I thought they said Africans were consumers, why then did Kalahari fail?”. I think Naspers failed on the Kalahari e-commerce projects as it didn’t really understand the terrain it was playing in as well as logistics problems it encountered. I’ll explain a bit further. Online business in Africa, especially Nigeria is a bit of a challenge.