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Zinox Buys Konga

Zinox Buys Konga

Konga has been bought by Zinox Group. I had suggested that Konga should sell itself because it had no business anymore. It lagged vision and the operational execution was extremely poor. I am happy that it listened. Sure, this is not good news because many Nigerians would certainly lose their jobs as Mr. Leo Ekeh (owner of Zinox) integrates Konga into the Yudala brand. Yet, at least, selling now would offer Konga more value to compensate those workers.

Going for pure play marketplace in Nigeria was desperation because the only outcome would have been massive value destruction in coming months. When they went that path, I knew that Konga was done. In Internet business, there are things which cannot work, as I noted many years in the Harvard Business Review.

I commend the Board & Management of Konga for doing the right thing..

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Konga has been severely wounded for any further fight to make sense. I do think the best for Konga is to sell itself now that it can generate higher value. To win in this market, it needs not just revenue but manpower since it is running a logistics business, despite the pivot to subscription classified model. By constantly cutting down manpower, it means it is not taking the fight to the traditional stores like Shoprite and supermarkets. That is weakness that will further erode its capacity to generate more value to shareholders. It can save itself from these challenges by selling to Jumia.

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According to details of the deal, Zinox Group, one of Africa’s biggest technology group would assume ownership of the e-commerce platform, Konga.com which remains as one of the biggest players in the sector; KOS-Express, the world class logistics arm of the business and KongaPay, the company’s integrated mobile money payment channel with over 100,000 subscribers.

I made the call. I do not do such without deep insights. That is what we sell to clients. I just did it FREE for Konga. Happy they can focus on something else.

Interestingly, Konga as a brand will emerge as a serious competitor using the Yudala hybrid ecommerce model. Yudala has struggled behind Jumia and Konga. Now both are together, we would see the best of Konga. Watch out, Konga would pivot, and return to the original core mission: helping families celebrate moments by simplifying commerce where merchants are partners, and shoppers fans. I expect Konga to blossom in coming months, relying on the physical element of Leo Stah empire. Konga would double within a year and expand into more cities.

 


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4 THOUGHTS ON Zinox Buys Konga

    • If you read the last paragraph “Interestingly, Konga as a brand will emerge as a serious competitor using the Yudala hybrid ecommerce mode” you would see we know and think that way. The point is that Konga and Yudala would fuse at the backend (that is integration) even though Konga will look separate in the frontend. That means if they have two CIOs, they may ask one to leave and keep one. That means HR would be consolidation, etc.

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