We wrote this few weeks ago on the social buying companies:
When Groupon – the U.S. based web behemoth – purchased Twangoo , a South Africa company, we felt that a new phase of M&A is starting in Africa. Groupon is the undisputed global leader in the crowd-buying business where group of people get discounts for shopping at stipulated time and place. But after rejecting Google’s $6b acquisition offer, it has come through enormous competitions, from copy-cats. LivingSocial which has received good funding from investors is leading this charge.
So, it was not a surprise that Groupon with the massive funds in their disposals were moving global, especially Africa to lock threats. That was when it picked Twangoo – the leader in South Africa in this sector. With South Africa done, it must be Nigeria. That is where Qluqlu and DealDey come into play. Both are still young and expanding. Possibly, if they execute, Groupon or LivingSocial could acquire them. With their offers, you can get a 30-70% discount if you crowd-buy with others!
It has been estimated that these two leaders in Nigeria have saved more than N1m to users of their services. Of course with that success, more people will join. That is what a new one, named Group Buy Nigeria is doing.
As these services become popular, more players will come. Group Buy Nigeria is just a new one and will be ready this summer. We need to see the innovation they bring into this game. If they have the resources to massively promote their services as DealDey is doing, they will be successful. This business requires enormous investment in advertising.
It is very important that Nigerian startups become innovative and think of new ways to come with new products and services. While a clone of the foreign ideas is workable, we need to dream locally and see how we can become global game changers. QluQlu, Dealdey and Group Buy Nigeria are all playing games populated by many people and getting separated in this low entry barrier business is critical.
Does Nigeria need this model? Can we sustain this business model? Time will tell, but the fact remains that Africans are not thinking innovatively. We are lead by the external world and we just follow. This is very unfortunate.