In the emerging world, no great ecommerce company has been birthed without a payment solution; pick India’s Flipkart with PhonePe, and China’s Alibaba with Alipay. You can flip that construct: it would be hard for any paytech company to live sustainably in the developing world if your strategy is simply to win checkout pages of companies. Yes, dropping your lines of codes on websites of merchants cannot take you to the mountaintop.

The path to growth is simple: you must control the pipelines of transactions. That was what made OPay a formidable player with its amalgam of bikers, before it was muted by a change in Lagos state’s regulation. OPay was generating tons of transactions, $10 million a day, through the clusters of activities like loss-making ride hailing in its ecosystems. I have called that strategy a Double Play Strategy: you earn competitive positioning in tangential things which may not be evident to direct competitors. Competing against OPay as a fintech without compensating for the huge transaction funnels via ride hailing would end badly.

Today, we are learning that Flutterwave has unveiled Flutterwave Store. That is a brilliant move. Simply, the company and its partners will handle your deliveries (in some markets) while you focus on making sales after listing your products in the digital store.

Flutterwave Store is quite simply the best and easiest way to launch and manage an e-commerce business that accepts payments from anywhere in the world without creating a website, knowing how to code etc.

Flutterwave Store allows you to upload products, set prices and (in some markets) have our integrated delivery partners pick up when you have an order and deliver to your customer. “Buy Online, Pickup Curbside” store if you like.

Do not look far: Flutterwave has now an ecommerce marketplace. Yes, it has a double play since it can funnel transactions into its  own payment solution, making it a better company. The launch of Flutterwave Store elevates  the company as it can now defend its castle through leverageable moats, built on merchants and store business owners. This provides the company a stronger competitive positioning, away from the hardest job in paytech – competing for checkout pages of websites.

We use Flutterwave on this site. It is an amazing product – they keep making it better. Yesterday, we had a 100% transaction success, implying that all the people who tried to pay went through! Provided that percentage stays at triple digit, we will gladly keep paying our “tax” to it.

Flutterwave’s promise to deliver the items means that great things are on the horizon for merchants and small business owners. Of course, the company has to manage the risks well since logistics is a very expensive business in Africa as scale does not necessarily reduce marginal cost. The implication is that you can just be raking loses in the process. Yet, if the loss is compensated by the “taxes” collected on paytech commission, you can upgrade the size of the party hall!

Flutterwave 2.0 – using ecommerce to play a double play on fintech. This is a new company, across all metrics, because it can create a virtuoso circle and a positive continuum that will empower communities as it ramps up. Gaskiya!

Let me congratulate Jumia for entering Africa’s finest ecommerce market: South Africa. Typically, you tell startups from Nigeria to shine their eyes before they go south since South Africa is a more matured market, and exceedingly competitive. You do not thoughtlessly go into business in South Africa. If someone drops you blindfolded, in Cape Town, in the night, you may think you are in San Francisco when you wake up! Typically, a kid born in Cape Town or Johannesburg has to leave South Africa to visit Africa!

With South Africa, Jumia will become a real ecommerce company as there are enabling infrastructures which actually make ecommerce to earn that “e” for “electronic”. What we have in Nigeria are physical stores with online stores since there are no leverageable anchors that reduce marginal cost during scaling. Without those enablers, the scalable advantages move towards “0”, turning a typical digital platform marginal cost plot to look like an average fixed cost curve with no inherent advantages via economies of scale.

Largely, as I have noted here many times, operating a pan-African ecommerce venture is hopeless, because your marginal cost instead of going to near-zero, as you scale, turn into a curve that looks like an average fixed cost curve (a shape that is similar to the one you see in Dangote Cement which confirms that ecommerce in Africa is a physical business, not electronic). When that happens, scale does not bring efficiencies on transaction and distribution which  are critical for the profitability of digital businesses.

But in South Africa, Jumia can unleash its capabilities and can actually grow without the typical impediments imposed by the paralysis of African infrastructure. No wonder, investors like the call as Jumia’s stock has added about $1 to close above $4 since the announcement. Jumia  had listed at $14.50 a share, valuing the company at $1.1 billion. Just four days later, its stock hit $49.77, raising its value to $3.8 billion.

Jumia pays its co-CEOs with Wall Street scale and we expect them to deliver Wall Street-like value. In 2019, the duo collectively went home with $5.3 million in all compensations, implying that a Jumia CEO earns more than any CEO of a quoted company in the Nigerian Stock Exchange, including the CEO of MTN Nigeria, and GTBank CEO. They certainly need to deliver!

Of course, Takealot, South Africa’s leading ecommerce player, is not an easy competitor. That is not an issue: there is room for all of them to cohabit when you remember that Jumia has a good warchest in cash to fight any battle. South Africa will treat Jumia fine.

This is the deal: the only thing that matters to business leaders now is GROWTH. As we reopen, think on how you can help the company where you work GROW.  The clients have bled money and some are already gone, the challenge now is how to survive. Growth, even if not profitable temporarily, is the only prescription! Think of three ways you can unlock growth for your firm. Develop the apparatus and have an implementable growth plan ready.

As leaders gather for that key meeting on the first day in office , make a contribution on the next path. I have listed domains in a video where we expect to see growth and opportunities in coming months. Check how you can help your company on that redesign.

• Hybridized Supply Chain: Flexible, adaptive, global and local, at the same time.
• Remote Everything: The web will run the world across sectors.
• Digitization and Cloud Migration: The pace will accelerate.
• Semi-automation: Disintermediation of humans will accelerate

Become a champion, help your company find growth. GROWTH, Growth, growth are the only agenda, post Covid-19.

Very challenging – running a digital business and asking people to pay via bank transfer in Nigeria. You have cases where people pay and never email you. Yes, even in our Edition 1 of Tekedia mini-MBA, we have paid participants who did not send emails. Please if you paid, you still have to email my team to create an account for you. Right now, they have to be googling people, looking for their emails and contacts.

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Sir,
We received a bank transfer payment in “your name” and no one has written us after the payment. We did a Google & Linkedin search with the name and got this email.

Could you confirm you made this payment? If so, just send a receipt (teller or online) or the date/approximate time of payment with amount. Do not feel bad on this as we need to reconcile or possibly continue searching.

Regards,

Tekedia Team