Prince Nnamdi Ekeh is the co-chief executive officer of Konga.
On the sidelines of the first Creative Africa Exchange recently held in Kigali, Rwanda, Ekeh speaks on the company’s growth strategy and other issues. Excerpts:
The Konga omni-channel
Konga is best positioned as the leader in the Nigerian e-commerce market. We are not just an e-commerce company but we run an omni-channel model with over 30 physical stores spread across Nigeria. So, we are closest to the people. Also, we are seeing huge growth in the business and in our customer base. Between last year and this year, the business grew by almost eight times.
Konga’s strategic business ideals
The company is run efficiently and with transparency and integrity.
The key is growing your revenue while being able to manage your costs. That is the only way for sustainable growth. In the last year, we have been able to grow revenue by eight times but we have also been able to reduce our costs by 65 per cent. That is quite huge.
Konga is creatively resolving the challenge of logistics, which has hobbled other players in the market. The company had relied on its deep understanding of the Nigerian terrain – a factor that has distinguished Konga in the marketplace.
The starting point for us was identifying the problem. There is a huge problem in Nigeria where the informal market is so huge, so massive; in fact, almost 98 per cent of the market. This means that people don’t have access to quality products; they don’t have access to quality after-sales service.
So, we identified this problem when we came into the market. What we hold ourselves on is integrity and making sure that we are supplying quality products and as quickly as possible. We had to look internally and invest in a logistics platform for ourselves. So, we built a logistics platform working with franchisees in local areas. If you understand the dynamics of local villages in Nigeria, most people know each other. As long as we had the name and the phone number of the person who requires the product, someone in the local village knows that person. So, we partnered with local people and empowered them to deliver to the last mile for us.
Today, we have built KXpress, our logistics platform, to the point where we are not only delivering for Konga but for other partners. That’s where you begin to add value because not only Konga has that problem. A lot of people have the same problem. People who sell on social media have that problem too. So, we are building a platform not just for ourselves but for the entire industry. With that, we are able to scale much quicker.
Our goal is to dominate Nigeria, which the company has all but achieved, before expanding to other African countries.
Nigeria is one of the largest markets in Africa. We are looking at consolidating in Nigeria and ensuring our customers get the best services and then rolling out across Africa. If you are able to scale to the point where you can solve a lot of the problems in Nigeria, it makes it easy to take on other markets outside Nigeria. Definitely, Nigeria is the focus for now. That’s where we started and that’s where we hope to scale and once that is done, we can begin to expand to other African markets.
We have a lot of things going on. We are also adding a lot of business units. We recently launched our travel business in February 2019 and also have a Central Bank of Nigeria-licensed mobile money platform called KongaPay. We also have KXpress, our logistics business. We are a platform and as a consumer, we want to connect you to all these different services we provide. We also plan to roll out a lot more services so that our customers stay within that platform as we continue to grow the customer base.
Incidentally, there has been a lot of talk about foreign players such as Amazon and Alibaba eyeing a share of the potentially money-spinning Nigerian e-commerce market. We welcomed the development, but no one understands the Nigerian market better than Konga.
We love the competition because the market is huge. Competition is good. It keeps you on your toes. I mean, Nigeria has over 200 million people and the informal market is still like 98 per cent. That means, all the big players in the market are only sharing just like 2 per cent of the potential of the industry. As the formal market grows, we also see the pie growing which means more revenue for all of us. I think the market can still accommodate more players.
I should know my market better than anyone else. The funny thing is, when the foreign players come into the market, they face exactly the same problems. They face the crazy Lagos traffic; they face the bad roads and bad infrastructure. So, we all have to face the same problems; which we have experienced all our lives, so it’s a bit easier to adapt and just like what we did with the logistics problems, it’s easier for us to find those innovative solutions.
We take pride in giving others an opportunity like the one I was privileged to have.
Luckily, I was privileged to go to school abroad. I returned and I had access to funds. What keeps me up is, how do I provide the same opportunity to people under me. In a way, I am doing that with Konga. I will give you an example. We have a seller that started off selling on our platform. She had a small shop in Balogun Market in Nigeria, which is a huge market, but like with very tiny shops, she was struggling at that point in time. She started selling on our platform and, today, she has about 13 stores and her children now school outside the country. That’s huge and all we have done is just provide her a platform to sell her products. She has access to the whole of Nigeria.