Barely two years after its acquisition of its rival company OLX, Jiji is the news again for another acquisition, this time, outside its traditional business.
The classified online market on Monday, announced the acquisition of transactional car marketplace Cars45. The amount was not disclosed. It is an unpopular business move though OLX has done a similar deal in the past.
In 2019, OLX invested $400 million in Frontier Car Group (FCG), a Berlin-based company that builds used-car marketplaces focusing on emerging markets. The investment gave the classified online market place a controlling stake in FGC. In 2020, OLX Group, via its OLX Autos brand, acquired Cars45 from FCG. The deal, coupled with the growth in the used car sales on its platform, is believed to have spurred the interest of Jiji to acquire Cars45.
Per Tech Crunch, the plan is to merge Cars45 operations in Nigeria (primary market), Ghana and Kenya with Jiji as the classifieds marketplace wants to consolidate its position in the space. In addition, the acquisition of Cars45 will help mitigate problematic trust and safety concerns that have sometimes plagued Jiji and offer a different car buying and selling experience via its transactional marketplace model. In turn, Cars45 users will benefit from Jiji’s dominance in online classifieds. The acquisition is expected to see Cars45 grow the vehicles category.
“We will integrate this into one company because this acquisition has a lot of benefits for both. It’s a very common practice when marketplace and transactional business models work together as one project,” co-founder and CEO Anton Volyansky said regarding the integration of both platforms. “For instance, a seller of a car, it’s convenient to sell both ways via a marketplace or auction model. So, it would be like a seamless process for selling the car.”
Jiji said sales of used cars have upped in its classified market place, buoying the decision to acquire Cars45, but the acquisition will set the company on a new path of practice that requires more vehicle inspection than it is done with cars on Jiji market place. Jiji’s CFO David Ojo, said Cars45’s key value is its network of inspection centres where cars are inspected by more than 200 parameters.
But unlike the classified marketplace where it has dominated for long in Africa, and only recently has Facebook Marketplace to compete with, Jiji will have to face a big rivalry in the car business. Swiss-owned ROAM, Jumia Deals, and Autochek, are other players Jiji will have to compete with.
Volyansky believes bringing the classified marketplace experience into Cars45 will spur growth, setting the company apart from other players, as it will have the advantage of being the first classified marketplace to venture fully into traditional car dealership.
“In terms of classifieds, we’re looking at opportunities, but we are already a leader in Africa, so I think there’s very limited space for whom to acquire. However, we’re primarily interested in deals like Cars45, where we bring our leadership positions from classifieds and acquire very close business models that give us exposure to the transactional marketplace. So for us, a major interest will be to acquire adjacent business models,” he explained.
Besides leveraging on existing markets, Jiji is also planning to explore new markets using combined resources from the two companies.
“We are proud to have built a trusted buying and selling experience in autos. It makes sense to combine online and offline expertise. Merging with Jiji is aimed at creating a new kind of automotive retail experience for users in Africa. We are confident of jointly building an African Champion in the O2O Automotive Sector. Together we look forward to making transactions transparent and convenient for our customers, dealers and franchisees across all our current and future markets,” Soumobroto Ganguly, CEO of Cars45, said.