THE SINKING OF SABUNTA

It was not long ago that my sister, her friend (both alumni of Oxford University) and i were discussing the potential of on-line retailing in Nigeria around the dinner table. I was stating that with no real competitor in the market the gap is certainly there for someone to launch a site to cater to fashion conscious Nigerians, so my sister and i began brainstorming business ideas that we could bring to fruition. It was to my surprise (horror) that my sisters friend proclaimed that in fact there was a website that had recently been actualised for Nigeria selling both international brands as well as domestic fashion labels.

My sisters friend is from Germany and she is very familiar with the businesses of the Samwer brothers who also hail from Germany and are otherwise known as the copy cats of the tech world. Not content with conquering the European and South American tech markets the Samwer brothers, through their start-up incubator Rocket Internet, now wanted to conquer Nigeria!

The site was called Sabunta and looked very professional with HD pictures and a variety of brands to purchase from. They did minimal advertising but were managing to attract customers who gave favourable reviews.With unlimited money being pumped in from Rocket Internet  they were definitely going to retain their position as market leaders if anyone else dared to enter the fashion e-commerce realm. How was i therefore going to be able to compete against them if i launched my own site? And what did the Samwer brothers know about the Nigerian market? I scoffed at the concept of these brothers doing business as a non-Nigerian in Nigeria;how would that work without help from somebody based there?

Until research led me to somebody called Tunde Kehinde, co-founder of Rocket Internet Nigeria, MBA educated from Harvard Business School and co-founder of Bandeka.com, an online internet dating website for people from Africa. Great credentials. Hmmmmm....

So how amusing for me to read several months later that the Sabunta ship is sinking. Well to be fair it has already sunk. They have consolidated the Sabunta site and merged it with their other site Kasuwa to form Jumia. Same template website but sales are not just focused on fashion but also on electronics, games, beauty and errrm.... everything similar to what Amazon provides. Downsizing of operations staff has occurred whilst senior management jobs still retained. 

So now all eyes are on Jumia. This model should prove more profitable for them and i would be interested in hearing what the man behind Rocket Internet Nigeria , Tunde Kehinde, has to say about the new direction they are taking. What i do know is that any future failures would be a sign that perhaps either Rocket Internet are not cut out for the Nigerian e-commerce market or Nigeria is not yet ready for the e-commerce market. What do you think?

READ MORE (Techloy did a fab article on this)

BRICKS AND MORTAR NIGERIA;$124 MILLION DOLLARS TO BE INVESTED IN RETAIL SECTOR

The Persianas Group, the developers of the Palms Shopping Mall in Lagos State,the Polo Park Mall in Enugu State and two further malls currently under development in Kwara State and Oyo State, are to receive $124 million or N20 billion from the IFC, a member of the World Bank Group, to tackle the underdeveloped but rapidly expanding retail and commercial property market in Nigeria. 

The Persianas Group's aim is to build a portfolio of internationally specified purpose built malls which will have several positive impacts for the nation including rollout of 'modern' food retailing, direct and indirect employment which of course is much needed in Nigeria, development of business infrastructure which will attract further foreign investment and payment of tax revenues that will accrue to the government (lets hope the money is  actually pumped back into redevelopment of the country rather than to individuals pockets...)

Mr Adetayo Amusan, Chairman of Persianas Group, said “IFC’s investment in Persianas demonstrates a commitment to supporting Nigerian entrepreneurs and is critical to preparing Persianas for our next phase of growth. This investment will help real estate development contribute to more jobs in businesses offering safe and healthy consumer products and services.”

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LUXURY SECTOR POTENTIAL TO DRIVE AFRICA'S ECONOMIC GROWTH

On November 15th-16th 2012,the International Herald Tribune will host its annual Luxury conference in Rome discussing  the potential and growing influence for luxury goods and global luxury brands in the continent of Africa.
Amongst the exciting line up of speakers, which include the biggest names in the fashion industry such as Donatella Versace, Lauren Bush Lauren, Jean Paul Gaultier, Manolo Blahnik and Sylvia Venturini Fendi, also includes Nigerians Duro Olowo, Fashion Designer and Omoyemi Akerele of Style House. 
The agenda promises to discuss Africa as a potential luxury consumer and producer along with the impact of Chinese investment in Africa, the new generation of luxury consumers and how technology is opening up new channels for luxury retail.

Naturally, luxury investment in the continent will steer towards the most developed of markets and areas of increased tourism. I predict conversations will be based on established markets in Sub-Sahara Africa such as South Africa. Kenya will feature because of the rise of its tourism sector and introduction of luxury holiday and tour packages. Angola, Africa's third biggest economy, has a growing population of wealthy individuals, mainly due to their growing oil exports. Nigeria, of course, Africa's second biggest economy, which has seen an influx of foreign investors entering the market encouraged by the rising population of the middle class. Areas of North Africa will be acknowledged despite recent adversities, amongst other smaller countries in the continent that have a growing middle class and attract a relative number of tourists each year.

Ticket prices, set at £2495 excluding VAT...(exactly!), reflect the quality of speakers invited and the businesses that will be in attendance. One can only dream of attending such an exciting and progressive event for our continent.

To register and book tickets for the event click here

DOMINO'S PIZZA FRANCHISE OPENS IN NIGERIA

I remember when working for British Airways on a stopover trip to Lagos, during my stay at the Sheraton Hotel  i decided to deviate from the traditional foods i would usually steer towards;jollof rice or pounded yam and some type of soup and decided instead to try their pizza. Having been bitterly dissapointed in the quality of pizza i had tasted the previous year on a non-work visit to Enugu State, i felt that an internationally known hotel such as Sheraton would produce a pizza similar to the quality i am accustomed to back in London. 

After waiting patiently for over 30 minutes (salivating with anticipation of a Nigerian 'baked from scratch' pizza, otherwise what could be taking so long?!) i finally saw the waiter heading towards my table. I was immediately horrified by the sight before me. The pizza looked like burnt Akara with something on top that resembled cheese with chicken as my topping. Needless to say i did not eat it. 

Now a few years later Domino's Pizza, one of the worlds largest Pizza chains and the second largest in the United States, has arrived in Nigeria. Setting up shop in Victoria Island, Lagos, the master franchisee is Eric Andre of Eat 'N' Go Restaurant Group. They have already set their sights on expansion across the country to the delight of Nigerians. With the rise in smartphone use to access the internet within Nigeria, Domino's Pizza can emulate and implement the business model which takes place at their other 10,000 plus stores across the world by allowing Nigerians to order pizza, via their mobile phones, to be delivered to their home address.

"Establishing ourselves in this emerging West African country presents a great opportunity for our business, and continues our global momentum as a brand," said Ritch Allison, Domino's Pizza executive vice president of international. "We have a great operator in Eric - his knowledge of the business landscape will be instrumental in making Domino's Pizza the leading pizza brand in Nigeria."

RETAIL GOLD RUSH FOR SOUTH AFRICA

Not content with having attracted big brand names such as Superdry,G-Star and Steve Madden (within the last year i must add), the Spanish retailer Zara has now launched in South Africa. With the rise of the middle class population and increased purchasing power, spending on clothing and footwear totalled £6.6 billion last year making South Africa an optional choice for international retailers affected by the downturn in spending by consumers tightening their purse strings. 

Because South Africa has the infrastructure available to attract and accommodate these big brand names, retail growth can only be set to increase. Thomas Pink, under LVMH Louis Vuitton Moet Hennessy, recently opened their doors in June with Topshop due to open their doors in the next few months. 

So what is the sudden interest in Sub-Saharan Africa? 

The economy in this region has grown 5.2% a year over the past five years according to the International Monetary Fund, affording consumers with disposable incomes to spend on non-essentials. The expansion potential into other parts of Sub-Saharan Africa is also huge with South African domestic retailers already looking at expansion plans into countries such as Angola and Nigeria. Certainly the economic crisis in Europe has slowed down sales for international retailers so expansion overseas is on their radar and with the 'S' at the end of BRICS pertaining to South Africa, it is unquestionably a country retailers are nurturing . 

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THE WORLD'S LARGEST CREDIT CARD COMPANIES HAVE ARRIVED

With the growth of e-commerce in the continent one must consider the implications faced by those who wish to purchase online. Online security all over the world, is always going to be an issue for deliberation when people use their credit cards to pay for goods and the more an online company can assist in safeguarding payments, the more consumers will feel safer and more confident in the online shopping experience. 

As an emerging continent in the online commerce world what better news to hear that Entersekt, a mobile security software development company, has in the last six months acquired Visa, MasterCard and now American Express accreditation to provide transaction authentication for online and mobile payments.

With their head offices in South Africa, they have already signed up a number of South African banks to provide transaction authentication for online and mobile transactions. The CEO of Entersekt, Schalk Nolte, recently commented, "With the advent of e-commerce, the need for fraud prevention technology is higher than ever. Statistics show that fewer people are trading in hard cash, opting to rather conduct their transactions online," 

So what does this mean for the customer in this part of the world? More control over our transactions, reduced possibilities of fraud and an overall more confident approach to online shopping. 

Says Nolte: "Entersekt is committed to enabling mobile and online financial transactions and to providing solutions to combat fraud. We are very proud of our AmEx accreditation and the support we have received from American Express in this process."

Very big smiles all around then.

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TRACLIST;ON THE RIGHT TRACK?

Traclist is a Nigerian on-line search engine that is able to search for a product and  provide results of retail stores in Nigeria that stocks the item you are looking for.

Not a particularly exciting website and clearly they have not built many relationships with retailers as search results return little choice of retailers, however it is a great idea and will be very effective if they develop the site further. With the potential to be in the same league as one of my favourite product sourcing websites, Kelkoo, i  do hope that those behind Traclist put in the time and effort to easily become Nigeria's leading retail product sourcing website.