In this interview with Olaseni Durojaiye, the Managing Director of Konga.com (a leading online shopping platform), Shola Adekoya, discusses the rising profile of e-commerce and how technology can drive trade and increase human productivity. Excerpts:
Is online shopping a passing fad or a tradition that has come to stay?
We will continue to witness the trend and it will increase. The internal indices are there; we are in a digital age. As a continent, Africa is also beginning to see the change, this may be the early stages but we will gradually see more and more online transaction as against traditional method of shopping than we see today. It is not a passing fad; it is here for the long haul.
Who are your target markets?
At Konga we target everybody; it is for all Nigerians. There isn’t any who cannot shop online because we’ve made it super convenient wherever they are; even those in remote villages. For those in remote villages, all they need to do is internet access. The beauty of Nigeria is that we are one of those places where in terms of internet penetration we surpass a lot of African countries, even some western countries with regards to mobile internet penetration. Konga covers every part of Nigeria; even into the creeks and island settlements in the Niger Delta.
At what cost?
We’ve actually made it very affordable. For Lagos and every other state capital it costs only N1,000 and for the very far places it actually costs less than N3,000. And we can only achieve this because we spent time building our network ourselves; we used some courier companies in the past but compared to when we do our delivery by ourselves the performance was a lot better; we’ve seen about 60 per cent improvement in our delivery services and we are also able to achieve cheaper shipping to our customers.
Interestingly, we have only recently introduced a new service whereby people can now receive purchases same day in Lagos, and this is because we’ve built a network that allows us to deliver goods anywhere in the country.
The big challenge for many businesses operating in Nigeria right now is sourcing forex. How is this affecting your operations?
For us, most of our operations are based in Nigeria. We also have a small team in Cape Town that helps us with developing software but you’ll find out that most of our costs are in naira so the impacts are minimal. However, when you go into products you’ll find that there have been slight increases in prices generally because those people that bring in the products also have to pay for the items. So it affects prices but it doesn’t affect our operations; that’s as far as it gets; it also affects our merchants, even at that we ensure at all times that we give customers the best value available in Nigeria.
Your operations depended heavily on the internet, how is internet penetration impacting your business?
Internet penetration in Nigeria is very high if you look at the number of handsets available. I’ll say when you have almost 100 million consumers using data in Nigeria; the question is what are they using data for? As a data customer, are you using it socially or for business? I think there is need for people to understand that the internet of today is beyond just social. You can actually use it to do business online. I’ll say majority of people who use data in Nigeria still use it for social reasons rather than business.
But then, the interesting part of it is that the online market is available market. For Konga, it is huge and over time we can only convince those customers by giving them excellent services and they’ll begin to see that online is beyond social reasons and that they can do e-commerce with it as well.
A major complaint around online shopping borders on customer dissatisfaction. A customer shop online and when it is delivered, the item falls short of expectations at other times it is defective.Is there anything that Konga can do to have a safeguard against issues like that?
I think we need to break it down to the issue of manufacturer defects which happens in any production worldwide, whether in electronics or whatever the goods are. But the beauty of Konga is that we give our customers protection against this, our customers have seven days to return a defective item, and we take it back and replace it.
We also have the issue of expectation versus reality. Apart from Konga also being a retailer on the platform, we also have about 40,000 merchants that list out goods on the website today; it is to bridge that gap so that even as our merchants list items on the website, the description of those items are well documented and it sets the right notification for the customers.
In addition to that, what we also do is that we have a whole floor dedicated to trust and safety and what they do is to ensure that whatever you buy on Konga.com you never lose out. It is either you get a replacement or you get your money back, and you can reach us by phone, Facebook Twitter etc.
Again, we also have a payment solution called Kongapay. It is automated, you make a purchase then you have an issue and you want your money back, Kongapay ensures that you get your refund; but with Kongapay, your money is held in an escrow it doesn’t go to Konga or the merchant until you are satisfied. Even if you don’t pay with Kongapay you are also protected. We’ve come up with these solutions to give the customers comfort around the platform.
How much is Konga worth?
Konga is a private business so I wouldn’t want to put that information in the public domain.
In talking diversification of the economy, some ICT player claim that ICT sector has the potential to earn Nigeria more revenue than oil and gas sector, what is your take on this?
When you say ICT, and I am talking technology here, that covers very wide area; in essence you are talking technology in terms of students studying robotics, software development, and automation etc. Basically things that’ll make life easy for Nigerians; I do agree.
Two things are involved. First is that you begin to develop a new set of skills and we will end up with solutions that you can export to the rest of the world. When we started Konga, we used to pay a lot to software developers to enable us operate our business but today we have over 150 technology engineers building solutions for Nigerians and Africans and these solutions are built for the environment and they work perfectly well.
There is a need for more of these, more so when you think of the industrial revolutions coming, Nigeria belongs to a global community, everybody is going digital, everybody is using technology to improve the way they work. You have robots now assisting human beings with work, in Agricultural technology is doing harvesting and achieve more out there every one hour.
In Nigeria, we need to give technology a bigger role in whatever we do such that the productivity that we get from our people increases; we have a huge population. The moment we are able to bring technology to bear on our population we will see that we can actually move away from our dependency on oil and gas. And, now is the time to catch that train rather than later when things have moved on.
What new strategy are you bringing to bear on your office to ensure that your brand continue to be a category leader in your business space?
The strategy is that we will continue to address the issue of customer experience and satisfaction with technology. We will be driving more of our initiatives with technology and continue to give Nigerians tools that show us as being more efficient than competition. Efficiency as a business, yes, but more importantly that we are able to deliver fantastic customer experience. We will continue to demonstrate that we understand the customer better, we know what they want and we are actually ready to give them what they want. An example is that when we used to import technology it takes us a couple of days to ship items out of our warehouse, now it takes us four hours and that is possible because we’ve built a localised technology that has allowed us to do that.
Where do you see Konga in the next 10 years?
Ultimately, it is to find us as an enabler that give the tools that make e-commerce happens, to merchants, customers and courier companies as well as all across Africa and not just Nigeria is where you’ll see us; we’ll like to bring technology into trade and commerce.