In my Grand Playbook of Business and The Leading Business Models of the 21st Century lectures, I explained how innovators are redesigning the ordinances of markets. Konga seems to have cracked the code on how to run ecommerce ventures in Nigeria and Africa. Happy to share this video which was made for our members in Tekedia Mini-MBA; registration for the next edition has just started. I am happy to share with our public community. Read here for the context of this video.
Sim Shagaya is correct with this tweet but interestingly the Konga of today is totally different from the one he ran. So, let us not extrapolate that the old Konga could have gotten to this evolving destination. The Konga which I posited should be sold, then, is totally not what we have now. The current Konga runs on a hybrid model, taking advantage of many physical stores across Nigeria through the Zinox Group.
Those stores help reduce marginal cost and improve unit economics. So, it is key we do not muddle it up with assumption that ecommerce is suddenly becoming profitable because Konga is. The fact is this: today’s Konga is not a pure play ecommerce company. It is a hybrid physical business with a super-online order placement portal. Yes, it is NOT asset-light, and certainly pays many real estate bills.
Impressively delivered brilliant perspective. Well done and thank you Prof. I think businesses in Africa needs to learn two core business success skills; Innovation and Calculated risk taking. Taking a vivid view at e-commerce, the digital part of the whole model is just like 25-30%, which is absolutely useless if your supply chain and logistics network which takes the remainder is not well thought out. It still baffles me to see that Konga is just trying to make such transition.
My utmost respect for Coca-cola and Walmart in that wise. I think where they probably got carried away is the fact that the transactions happen online. But at the same time, I think it’s pretty obvious that you don’t get your goods delivered to customers via cloud. And as much as you are trying to create an extensive network, you should try to leverage to have a shared risk, most especially, through horizontal integration. You clearly can’t succinctly execute this by playing a one man show. It will crash.