Last week’s merger of two e-commerce giants will further deepen retail online shopping, writes Emma Okonji
Last week’s announcement of the merger between Konga, Nigeria’s largest online mall and Yudala, Africa’s pioneer composite e-commerce company, has continued to elicit excitement among industry stakeholders who are of the view that the merger of both firms into a single platform with one brand identity, will boost consolidation and enhance speedy growth of the country’s e-commerce sector. The merger, which takes effect in five days’ time, precisely on May 1, 2018, was announced by Zinox Group, owner of Konga and Yudala.
Zinox Group had in February this year, acquired Konga, but kept the business plan of possible merger to its heart, while strategising on how best to manage the two e-commerce companies. The silent strategy, however, left stakeholders with their worries and speculations about what could possibly come out of the acquisition.
But their worries were put to rest last week when Zinox Group announced the merger, a move that has elicited lots of excitement among industry stakeholders, who saw the merger as the best business decision that makes economic sense.
Barely two months after Zinox Group acquired Konga, Nigeria’s largest online mall, the group decided to merge the operations of the acquired Konga, with its home grown e-commerce company, called Yudala.
The merger plan will see Yudala operate under the same platform with Konga, but with a new brand identity known as Konga, with effect from May 1, 2018.
Zinox Group had in February this year, acquired Konga, an e-commerce company, but did not disclose the merger plan with Yudala until last week.
The merger plan, according to Zinox Group, would see both e-commerce company effectively become the biggest organised retail and e-commerce/marketplace outfit on the African continent. The strategic decision will see both companies leverage the combined strengths of both platforms and is expected to further broaden the scope of organised retail and e-commerce in Nigeria and deliver more value to customers and merchants.
Speaking during the announcement of the merger, Konga Chairman, Olusiji Ijogun, said: “Combining forces to power the new Konga will enable us effectively achieve our goals of platform expansion and accelerated growth, as we embark on an ambitious journey to redefine the retail ecosystem with the industry’s most advanced technology.
“Effective from May 1, Yudala will now operate under the name Konga, with dual CEOs in the persons of Nick Imudia who will be in charge of online among others and Prince Nnamdi Ekeh who will be responsible for offline. This merger will further strengthen our position in the Nigerian retail market as we creatively position Konga as the first profitable e-commerce company in Africa.”
According to Ekeh, “We are very excited about the operational merger between Yudala and Konga into the new Konga. A merger of this magnitude has never been experienced in Africa. We will be leveraging on Konga’s strong technology backbone and online experience as well as Yudala’s offline experience, network of retail stores and operational efficiency. In the near future, we plan to have a Konga store in every local government area in Nigeria. While this is ambitious, we believe that every Nigerian deserves the right to have access to the full range of genuine products offered by Konga.”
On his part, Imudia said: “We believe this operational merger between Konga and Yudala will bring immense opportunities for consumers in the e-commerce space. We urge all shoppers, consumers, merchants and clients to stay tuned as we unveil the massive ambitious contents we have to offer.”
One of the exciting benefits of the merger according to Zinox Group, is the possibility it offers prospective shoppers to order online, pay and pick-up the product(s) at the nearest Konga offline store. There are also increasing business opportunities for merchants nationwide.
Stakeholders who hailed the merger, said it would open up the e-commerce sector in Nigeria, given the capacity of Yudala and the robust technology of Konga.
Industry perception of the merger
Reacting to the merger announcement, industry stakeholders said they were excited about it because of the consolidation it would bring in the e-commerce sector.
Chief Executive Officer, Pinnet Technology, pioneer Internet Service Provider (ISP) in Nigeria, Mr. Lanre Ajayi, said the merger was a welcome development that would enhance consolidation in the e-commerce sector. According to him, having acquired Konga, it makes business and economic sense to merge both operations together for the purpose of faster expansion and profitability.
“Most businesses in emerging markets like ours do not survive harsh business environment because they either operate in silos or with small capital that will not withstand most business challenges. Some of the GSM companies in the telecoms sector are doing well today because of the injection of huge capital into the business from various financiers. We need such collaboration that will enable injection of fresh funds into the e-commerce business in Nigeria and that is exactly what the merger between Konga and Yudala will bring to the table,” Ajayi said.
Consolidation is the best way to go and we need more of consolidation in the e-commerce sector to further drive businesses to sustainability and profitability,” Ajayi said.
President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, said the acquisition and subsequent merger was one good thing that had happened to the Information and Communications Technology (ICT) industry this year, because it would help the e-commerce industry to become more vibrant, competitive and it will enhance service quality.
“It will bring about more deployment of broadband infrastructure by InfraCos for last-mile service delivery, since e-commerce business, which used to be an emerging market, is beginning to witness rapid growth and development,” he said.
Other industry stakeholders who commended the Zinox Group, led by its Chairman, Leo Stan Ekeh for the acquisition of Konga, said Zinox took the best business decision to merge the two giants together into a bigger e-commerce company that will drive innovation in the e-commerce sector.
Widely applauded by industry watchers as a masterstroke, they said the merger would broaden the range of products and solutions on offer within the Konga/Yudala stable, while giving the customers and merchants more options and access to an expanded variety of guaranteed quality offerings and payment methods.
The new structure
The Konga Business platform will now include two distinct but fully integrated aspects including Konga Online, the e-commerce/marketplace platform and Konga Retail, the offline arm of the business. Both will be supported by Konga Pay, a CBN-licensed mobile money platform and Konga Express, a world-class logistics company with advanced delivery capabilities for internal and external customers.
Head of Corporate Communications, Zinox Group, Mr. Gideon Ayogu said the merger would further expand the operations of e-commerce in Nigeria, an industry that Zinox pioneered in Nigeria with the launch of BuyRight Africa.com which was challenged by the absence of credit card and e-payment infrastructure when it was launched over 12 years ago.
About Zinox Group
The Zinox Group is arguably Africa’s most integrated technology group, with strong interest in Original Equipment Manufacturing (OEM). Under the group, it operates as Zinox Technology, the first Nigerian OEM that assembles local computer, known as the Zinox Computer with naira sign. It equally operates as Technology Distribution (TD), the number one IT distribution company of all kind of computers and their accessories in Africa.