More acquisitions in global e-commerce space as Jiji buys OLX in Nigeria, others
Apparently squeezed OLX which had market acceptability issues due to a viral child kidnapping scandal in Nigeria few years ago, has been acquired by Jiji, a fast-growing online classifieds marketplace.
Earlier Konga, in which Naspers is a major investor, had sold its business to Zinox Group in 2018 as Zinox went ahead to subsume its indigenous Yudala into Konga to deepen capacity and customer base.
Apart from acquisitions, it would be recalled that Efritin.com had closed down in 2017, citing the high cost of doing business as reasons for the exit.
Recall that OLX had closed its business in Nigeria last year February but maintained its online marketplace while laying off workers, as part of the process to consolidate its operations in the country.
Business Hilights gathered that as part of the deal, the OLX users in Nigeria would be directed to Jiji marketplace in a transaction backed by one of Jiji’s cornerstone investors, Digital Spring Ventures.
In a statement issued by Naspers on the acquisition, both companies have also reached an agreement to acquire the other OLX businesses in Ghana, Kenya, Tanzania, and Uganda, subject to regulatory approvals.
After concluding the deal, all users of the sell-and-buy classifieds websites of OLX Nigeria, OLX Ghana, OLX Kenya, OLX Tanzania, and OLX Uganda would be redirected to Jiji.
The statement further disclosed that joining Jiji’s family would allow OLX users in these countries to benefit from Jiji’s market-leading products and services.
Making remarks on the deal, Chief Executive Officer and co-founder of Jiji, Anton Volyansky, said, “Users will always come first for us. We warmly welcome OLX’s customers to the Jiji family and we look forward to our new customers joining Jiji on its journey to empower the lives of its customers by providing a safer, more secure and enjoyable online shopping experience.”
Also speaking, Board Director and Co-founder of Jiji, Vladimir Mnogoletniy, observed that “We believe that this transaction is pivotal for Jiji’s business. With this transaction, we plan to build the largest Africa-based classifieds business, creating a new experience for Africa’s fastest-developing countries and their combined population of 300 million. We firmly believe that in the next two to three years, ours will be one of the top 10 classifieds businesses in the world by traffic.”
In his reaction, a partner at Digital Spring Ventures, Zhanibek Sydykov, said, “We are pleased to be able to assist our partners at Jiji on this transaction and we strongly believe that the combined Jiji and OLX businesses will become a formidable force in the African e-commerce market. This transaction further advances the consumer reach of one of the star portfolio companies in our current fund, which is focused on partnering with ambitious entrepreneurs to deploy capital in the Internet and technology sectors in some of the world’s most exciting emerging markets.”
Analysts say a major challenge facing e-commerce space in Africa and Nigeria in particular has been the problem of advertising a beautiful product and delivering a variance. Whereas very few usually accept the delivered product and put a stop to further orders, many had been in the habit of raising objections as to why they were given an entirely different product which did not tally with their original demand in terms of quality and appearance.
Avaliable statistics show that global e-commerce sales grew by 13 per cent in 2017, hitting an estimated $29 trillion, according to the latest numbers released by the United Nations Conference on Trade and Development (UNCTAD).
The report noted that a similar surge was seen in the number of online shoppers, which jumped by 12 per cent and stood at 1.3 billion, or one quarter of the world’s population.Though most Internet buyers purchased goods and services from domestic vendors, the share of those buying from abroad rose from 15 per cent in 2015 to 21 per cent in 2017, as growth was driven mainly by an increase in the United States.
As a result, cross-border business-to-consumer (B2C) sales reached an estimated $412 billion, accounting for almost 11 per cent of total B2C e-commerce, representing four per cent increase from the previous year’s numbers.
UNCTAD Secretary-General, Mukhisa Kituyi, said “The new figures show that e-commerce is indeed creating export opportunities. But the question from a development standpoint is whether businesses in developing countries are prepared to seize the opportunities.”
