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Poor Infrastructure was my Largest Obstacle – CEO Konga

On CNN’s ‘Marketplace Africa’, host Zain Asher sits down with Shola Adekoya, CEO of Konga, one of Nigeria’s largest e-commerce sites, to talk about the challenges of starting the website and introducing e-commerce to the country.

Adekoya explains that poor infrastructure in Nigeria was one of the largest obstacles he faced when launching Konga. He notes that introducing e-commerce to the country meant that organizing logistics “was a nightmare”.

In response to this, Adekoya came up with a simple solution: “We ended up building our own logistics infrastructure that covers every state in Nigeria.”

Despite building infrastructure across Nigera, Konga parcels sent from sellers across the country must still travel on many poor roads. This means that the company is unable to offer delivery times of less than five days. Adekoya says that this is an ongoing conundrum for the company: “How do you get to the places the fastest? That’s what we live and breathe every day! It depends where you live [on] the road network. At any given point in time, we do keep to our five day average. We’re trying to bring that down to four days, but it’s really challenging.”

This wasn’t the only issue faced by Adekoya and his team. He explains how many Nigerians were suspicious of online shopping when Konga began: “There’s a lot of history around Nigeria and online fraud, so people were already skeptical about putting their card details online [to make] transactions and many people hadn’t even started using things like online banking.”

As a result, launching the online shopping site involved ensuring that the customer felt confident in the company. Adekoya explains: “In terms of educating people on making payments online and the fact that it’s actually safe, there was a lot of work that needed to be done.”

Adekoya’s company soon launched KongaPay, a pay-on-delivery service which eliminates the need for customers to enter sensitive information online. Customers only complete their payment when their goods are delivered to their satisfaction.

Ashers asks if this service has had a detrimental effect on Konga’s potential profits because customers are able to change their mind on their purchase. Adekoya answers: “Today, about 20 percent of products will come back because of pay-on-delivery. It’s something that we have to deal with.”

Regardless of this, Adekoya attributes KongaPay to the company’s success: “Now with KongaPay, we’re giving customers a little bit of comfort around paying online. I personally feel like without giving the customers the flexibility of getting their money back very quickly, it becomes difficult to sell [products with] prepay.”

Another one of Konga’s successes is the Konga Marketplace, a service which allows anyone to become a seller on the site. Adekoya explains: “The marketplace is a fantastic phenomenon for us. You have about 250 to 300 thousand products now from different merchants which our customers have access to.”

Konga also provides much support for the sellers to ensure that they are making their businesses better. Adekoya outlines the steps the company has taken to improve Konga Marketplace: “We have about 75 thousand registered merchants and we’ve trained these people on a regular basis in terms of customer service and how to pack products. We’ve created a platformed where merchants can come and expand their business.”

Adekoya tells the programme that he is satisfied with Konga’s success: “As a business model, we are quite happy with where we are today. Investors are happy with us. The staff are happy… and merchants have been able to enrich their businesses. It gives us a lot of joy.”

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