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Millions To Be Made In Shopping’s Bermuda Triangle

A start-up led by a doctor is banking on trust to build Nigeria’s largest online supermarket.

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Out of a desire to ease the burden on his beloved wife, who had to juggle a career as a business technology consultant with the demands of managing her home, an entrepreneur decided to start his own online retail business.

Olumide Olusanya, established Gloo.ng – initially buycommonthings.com – to enable his better half, Seyin, to shop from the comfort of home and not have to spend what ought to be quality time with her family in grocery stores.

Olusanya, a medical doctor turned technology solutions developer, was in the middle of his third act as a value investor after a successful career as an e-payment expert where he led the team that deployed West Africa’s first locally issued and processed international payment card – Ecobank MasterCard. The idea to establish an online supermarket that would offer same-day delivery of groceries and essential homecare products came to him on a routine work day.

“I was doing my investment management from my home office; I would jog in the mornings and spend the rest of my day working from my study. When the idea came to me, I wrote the plans and tested it. I took out all the settees in my house and had a carpenter build the shelves then set up a small team initially, but all of them ran away after one month because they couldn’t stand the heat. So I was left with my co-founder, my wife, and we continued developing the idea. We had built the product and were operational, so with the traction we saw, I decided we had to do this.”

Progress over the next few months meant the business had to be expanded. Tapping into his personal savings, Olusanya moved to a bigger facility and hired two more people to join the team.

“For the first three months, of course it was just me alone. I was doing deliveries and as the demand started growing, we had to increase capacity. So I asked my wife to leave her job and she also started doing deliveries as well. Then we got the facility in Lekki (a middle class suburb in Lagos). Once we moved to Lekki that was the moment we burned the bridge and the only way we were coming out of this was at the other side. We had two people join us later and for 10 months, four of us ran the business.”

Nigeria’s retail sector has seen explosive growth since the middle of the last decade. A recent report by Euromonitor estimated the annual value of the market for supermarket products in 2012 at $33 billion.

Groceries and household essentials are mostly sold in open air markets and convenience stores, but recently, there has been a revival in the development of large shopping malls and superstores. South African retailer Shoprite entered the market in 2005, while Dutch brand, Spar, also entered the market operating in partnership with the Artee Group, a local player. Both brands are leading the market in terms of the number of stores with a combined total of eight. But as they seek to expand – Shoprite and Spar aim to have 40 outlets nationwide over the next three years – online retailers such as group buying site DealDey, as well as Jumia and Konga, have experienced rapid growth in the last three years.

Gloo.ng aims to ride this wave to challenge the brick and mortar players and capture the largest share of the market.

“Our vision it to be the biggest supermarket in Nigeria and our mission is to change the way Nigeria shops for living essentials or supermarket goods. There’s something driving everything we do. Our values derive from the Spartan culture, which is a very well knit culture where our sense is there’s nothing we set out to achieve that we will not.”

Eschewing the marketing-led approach to creating awareness for the brand, Gloo.ng chose to grow organically, allowing its customers to spread the word about its service. This has seen the company build an army of loyal customers, something that often eludes e-commerce firms. Olusanya reveals that 75% of the company’s business comes from repeat buyers, where most e-commerce firms have return rates below 10%.

“I was the one doing deliveries, and then Seyin joined me so she started doing deliveries as well. The early customers knew Seyin and me, but they didn’t realize we were the co-founders. Someone found out and that was something they liked about the story. So the business started growing; we hardly spent money on marketing, we grew largely on word of mouth.”

Impressively, the firm is also surmounting challenges that have often held back online retail companies in Nigeria. Payment has been a significant problem in a market where a lack of trust means customers prefer to pay for products with cash rather than using bank cards.

Gloo.ng is bucking this trend.

“What we end up building with our customers is a relationship. Our customers know us and once they do one or two transactions with cash, for the next transaction, they start using the electronic means which is obviously more cost effective for us. The new trend we are seeing is that customers are actually leaving money with us because using your card in Nigeria is a pain, unlike abroad where it’s just a click once your details are stored. So I think the whole idea, because of the nature of the repeat business that our customers do with us, is the trust they have built with us.”

Expectedly, the company’s early success has not gone unnoticed. Olusanya previously received offers from savvy investors but thought it was premature to raise major funds to grow the business. Feeling that the time is now right, Gloo.ng just secured Series A funding from an investment firm in Nigeria.

“We just signed a $1million funding agreement with IRM Limited. We’ve had investors calling us from all over, locally and internationally, but we have a type of entity that we’ve chosen to work with because we have to have people who are aligned with our vision. IRM understand what we are trying to achieve.”

Selling groceries online is notoriously tough and several worldwide start-ups have failed, most notably that of United States-based Webvan in 2001. Scaling Gloo.ng in Nigeria, a country renowned for the hostile nature of its business environment, promises to be a sizeable task but Olusanya is confident that they will succeed.

“The experience of the team we have and the research we have done are some of the things that put us in good stead to deal with the risk. Anything involving groceries online has been the Bermuda Triangle of e-commerce worldwide, but some companies like FreshDirect, Tesco.com, Ocado and Peapod have shown that it can be done. But we are not chasing any of those models; there is no single model that has been proven to work in that regard, and that’s why Gloo.ng has a multi-faceted model. We have various models, each with its own strategic objective that we are executing at the same time and we’ve been growing well quarter on quarter, so we are confident that we will get it right.”

Their loyal customers seem to agree.

Entrepreneurs

From The Arab World To Africa

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Sheikha Hend Faisal Al Qassimi; image supplied

In this exclusive interview with FORBES AFRICA, successful Dubai-based Emirati businesswoman, author and artist, Sheikha Hend Faisal Al Qassimi, shares some interesting insights on fashion, the future, and feminism in a shared world.

Sheikha Hend Faisal Al Qassimi wears many hats, as an artist, architect, author, entrepreneur and philanthropist based in the United Arab Emirates (UAE). She currently serves as the CEO of Paris London New York Events & Publishing (PLNY), that includes a magazine and a fashion house.

She runs Velvet Magazine, a luxury lifestyle publication in the Gulf founded in 2010 that showcases the diversity of the region home to several nationalities from around the world.

In this recent FORBES AFRICA interview, Hend, as she would want us to call her, speaks about the future of publishing, investing in intelligent content, and learning to be a part of the disruption around you.

As an entrepreneur too and the designer behind House of Hend, a luxury ready-to-wear line that showcases exquisite abayas, evening gowns and contemporary wear, her designs have been showcased in fashion shows across the world.

The Middle East is known for retail, but not typically, as a fashion hub in the same league as Paris, New York or Milan. Yet, she has changed the narrative of fashion in the region. “I have approached the world of fashion with what the customer wants,” says Hend. In this interview, she also extols African fashion talent and dwells on her own sartorial plans for the African continent.

In September, in Downtown Dubai, she is scheduled to open The Flower Café. Also an artist using creative expression meaningfully, she says it’s important to be “a role model of realism”.

She is also the author of The Black Book of Arabia, described as a collection of true stories from the Arab community offering a real glimpse into the lives of men and women across the Gulf Cooperation Council region.

In this interview, she also expounds on her home, Sharjah, one of the seven emirates in the UAE and the region’s educational hub. “A number of successful entrepreneurs have started in this culturally-rich emirate that’s home to 30 museums,” she concludes. 

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Kim Kardashian West Is Worth $900 Million After Agreeing To Sell A Stake In Her Cosmetics Firm To Coty

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In what will be the second major Kardashian cashout in a year, Kim Kardashian West is selling a 20% stake in her cosmetics company KKW Beauty to beauty giant Coty COTY for $200 million. The deal—announced today—values KKW Beauty at $1 billion, making Kardashian West worth about $900 million, according to Forbes’estimates.

The acquisition, which is set to close in early 2021, will leave Kardashian West the majority owner of KKW Beauty, with an estimated 72% stake in the company, which is known for its color cosmetics like contouring creams and highlighters. Forbes estimates that her mother, Kris Jenner, owns 8% of the business. (Neither Kardashian West nor Kris Jenner have responded to a request for comment about their stakes.) According to Coty, she’ll remain responsible for creative efforts while Coty will focus on expanding product development outside the realm of color cosmetics.

Earlier this year, Kardashian West’s half-sister, Kylie Jenner, also inked a big deal with Coty, when she sold it 51% of her Kylie Cosmetics at a valuation of $1.2 billion. The deal left Jenner with a net worth of just under $900 million. Both Kylie Cosmetics and KKW Beauty are among a number of brands, including Anastasia Beverly Hills, Huda Beauty and Glossier, that have received sky-high valuations thanks to their social-media-friendly marketing. 

“Kim is a true modern-day global icon,” said Coty chairman and CEO Peter Harf in a statement. “This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”

The deal comes just days after Seed Beauty, which develops, manufactures and ships both KKW Beauty and Kylie Cosmetics, won a temporary injunction against KKW Beauty, hoping to prevent it from sharing trade secrets with Coty, which also owns brands like CoverGirl, Sally Hansen and Rimmel. On June 19, Seed filed a lawsuit against KKW Beauty seeking protection of its trade secrets ahead of an expected deal between Coty and KKW Beauty. The temporary order, granted on June 26, lasts until August 21 and forbids KKW Beauty from disclosing details related to the Seed-KKW relationship, including “the terms of those agreements, information about license use, marketing obligations, product launch and distribution, revenue sharing, intellectual property ownership, specifications, ingredients, formulas, plans and other information about Seed products.”

Coty has struggled in recent years, with Wall Street insisting it routinely overpays for acquisitions and has failed to keep up with contemporary beauty trends. The coronavirus pandemic has also hit the 116-year-old company hard. Since the beginning of the year, Coty’s stock price has fallen nearly 60%. The company, which had $8.6 billion in revenues in the year through June 2019, now sports a $3.3 billion market capitalization. By striking deals with companies like KKW Beauty and Kylie Cosmetics, Coty is hoping to refresh its image and appeal to younger consumers.

Kardashian West founded KKW Beauty in 2017, after successfully collaborating with Kylie Cosmetics on a set of lip kits. Like her half-sister, Kardashian West first launched online only, but later moved into Ulta stores in October 2019, helping her generate estimated revenues of $100 million last year. KKW Beauty is one of several business ventures for Kardashian West: She continues to appear on her family’s reality show, Keeping Up with the Kardashians, sells her own line of shapewear called Skims and promotes her mobile game, Kim Kardashian Hollywood. Her husband, Kanye West, recently announced a deal to sell a line of his Yeezy apparel in Gap stores.

“This is fun for me. Now I’m coming up with Kimojis and the app and all these other ideas,” Kardashian West told Forbesof her various business ventures in 2016. “I don’t see myself stopping.”

Madeline Berg, Forbes Staff, Hollywood & Entertainment

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Entrepreneurs

Covid-19: Restaurants, Beauty Salons, Cinemas Among Businesses That Will Operate Again In South Africa As Ramaphosa Announces Eased Lockdown Restrictions

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South Africa’s President Cyril Ramaphosa addressed the nation announcing that the government will further ease the country’s lockdown restrictions.

Restaurants, beauty salons, cinemas are among the businesses that will be allowed to operate again in South Africa.

The country is still on lockdown ‘Level 3’ of the government’s “risk adjusted strategy”.

President Ramaphosa also spoke on the gender based violence in the country.

“It is with the heaviest of hearts that I stand before the women and the girls of South Africa this evening to talk about another pandemic that is raging in our country. The killing of women and children by the men of our country. As a man, as a husband, and as a father to daughters, I am appalled at what is no less than a war that is being waged against the women and the children of our country,” says Ramaphosa.

Watch below:

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