“In Nigeria, ecommerce is not a digital business,” Ndubuisi Ekekwe
Read this nice piece by on Business Day. He explained the Konga and Yudala merger. The key line is this: "Till date, no ecommerce business in Nigeria has turned profitable". He went on to quote my position that running an ecommerce business in Nigeria should not be seen as a digital endeavor. In business, forget the hype. Yes, follow the data, and most especially the compositions of marginal cost, you would make better decisions.
Some experts have seen the merger as confirmation that the ecommerce space remains a hard nut to crack for investors and will take more than new monies to witness real growth. Till date, no ecommerce business in Nigeria has turned profitable.
“In Nigeria, ecommerce is not a digital business,” Ndubuisi Ekekwe, a technology expert wrote in a recent blog post. “It is a traditional business because the highest element of its marginal cost is offline.”
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To make matters worse, the space has seen more significant exits that it has witnessed new investments. Efritin.com and OLX are the most recent casualties in the space.
Reports have also emerged that investors in Jumia, the biggest ecommerce platform and Konga’ major rival, is seeking an exit through the Nigeria Stock Exchange. As if to confirm the reports, the company recently sold Jumia House, an arm of its business to Propertypro.ng – formerly Tolet.com.ng. Jumia struggles became evident when in the first 9 months of 2017, it saw its losses widen to €80.7m ($99.1m), while revenues were just €57.3m ($70.4m)