Although Africa is all too often viewed by investors and the public at large as being the “dark continent”, more often than not, they are letting prejudices and misconceptions cloud their judgment about some of the most exciting investment destinations available. In 2018 alone, six of the ten fastest growing economies in the world were in the African continent. 



This prejudice is compounded by the natural tendency for investors to invest in what they know best and are most familiar with, which is often what is in their own country. Globalization has, however, made markets more interconnected, and distance is becoming less of the obstacle it once was. 



The continent is blessed with strong demographics, considerable natural resources, and increasingly, a more stable political and investment environment for multinationals to operate within. Even traditional hindrances such as poor infrastructure can be viewed as a potential opportunity, particularly in the area of financial services and e-commerce. 



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Jiji, is the largest classifieds business marketplace in Nigeria, it was started from scratch five years ago, by a group of seasoned e-commerce professionals. With a market of 200 million people, Nigeria provides enormous upside should a business take off. The horizontal classified business model (any online business using http) does, according to Goldman Sachs, offer one of the most attractive investment models in the world, along with search engines and social networks. 



It’s not hard to see why it’s such an attractive model, when the “winner takes it all” model is applied, in certain markets, the number one online classifieds controls over 80% of market share. The size of earnings opportunity equals 6 b.p. of the national GDP with 60% of long-term EBITDA margin. It is also an asset-light business model that requires minimal investment in heavy machinery and ensures high cash flow conversion.



The potential upside to the classified business model is
particularly evident in a market such as Nigeria that has a young population of
just over 200 million people. Nigeria is a mobile-only country (where 90% of
traffic is on mobile web and is rapidly shifting to apps) with high and growing
Internet penetration. In Africa, classifieds provide
the ideal platform for e-commerce, as it enables people to buy and sell both
second-hand goods and new ones. 



Over the course of the last five years, Jiji has become the largest classifieds marketplace in Nigeria. The platform has just over 6 million unique active monthly users and more than 50,000 professional sellers listing over one million items. In 2018, the Jiji app was rated number one by Android users in the Nigerian shopping category, it is currently the highest rated app in Nigerian e-commerce. 



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Having cemented its leading position in Nigeria, the team have set their sights on expanding into new African markets, and recently decided to redirect OLX users in Nigeria to Jiji and to acquire OLX businesses in Kenya, Ghana, Uganda, and Tanzania. After the transaction is completed, Jiji will have a presence in five markets, with 300 million people. 



In a couple of years, Jiji’s monthly audience is expected to cross the threshold of 10 million users which will make it one of the largest classifieds by traffic. Jiji’s ambition is to build the biggest Africa-based classifieds business, creating a new retail experience for Africa&#8217;s fastest-developing countries with a combined population of 300 million.



The deal will allow OLX users in these countries to benefit from
Jiji’s market-leading products and services. OLX’s reach combined with Jiji’s
own proprietary search and delivery algorithms, will give users a radically
streamlined experience and ensure the experience of buying and selling goods
more convenient and transparent than ever before.



Africa has in the past been viewed very negatively by potential investors and businesses in general, however, as technology breaks down barriers to accessing finance and supply chain infrastructure the potential opportunities have never been greater. 



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This combined with greater access to the internet and mobile phones provides imaginative entrepreneurs and businesses a chance to rethink traditional business models and create different systems that cater to the needs of this young, diverse and commercially underserved region. 



The team at Jiji recognize the potential benefits and opportunities that this region has to offer, only time will tell if other foreign investors recognize the upside African economies have to offer. &nbsp;

Woman in cafe shopping online with laptop

Why Now Is The Time To Invest In African E-commerce

Where would we be without globalization? What if media was restricted to reporting within its own national boundaries? What if we all lived in isolation? It’s a scary picture and one where humanity would have not progressed as broadly as it has.
To fellow African entrepreneurs, I want to say one thing: the more you are exposed to, the bigger you can dream.
Industrialization progressed by further developing what had been done before. Only after working with renowned inventor Thomas Edison, could Nikola Tesla go on to create his own inventions.
Andrew Carnegie worked under the leading businessman, Thomas A. Scott. This mentorship allowed Carnegie to define an era by starting a generation of industrialists, pioneering the philanthropic movement, and becoming an epitome of self-development.
The key word here is exposure.
There are countless occasions where entrepreneurs only discovered their flair by observing other entrepreneurs or studying companies that transformed industries. Some even became competitors of their former employers.
Adrian Gore, the Founder of Discovery Holdings, was exposed to the dealings of the insurance sector early in his career. He worked for Liberty Life but resigned to build his own insurance company. Today, Discovery is the leading medical insurance company in South Africa.
Isn’t it surprising that many companies were started by entrepreneurs who thought they could do it better? Deciding to improve something can shape your destiny. Decisions like these act as the force that pushes us on in our lives.
Look at the former employees of PayPal – today known as the PayPal Mafia. After leaving the famous tech company, these individuals went on to found and fund other mammoth companies like LinkedIn, YouTube, Facebook, Tesla, SpaceX and they are not finished. At the moment, they are investing in Artificial Intelligence.
These gentlemen were exposed to a revolutionary business and they now all share a drive to change the world as we know it to a better world, one that they see in their minds.
Exposure can give you something other than experience, it can also get you through certain doors that were previously shut. Let’s look at two entrepreneurs; both are looking to seal separate deals. Entrepreneur X closes a $1.8 billion deal, while entrepreneur Y gets a $274,000 deal.
Both worked tirelessly to get these deals but the rewards are not the same. It is likely that entrepreneur X has been exposed to certain levels, while entrepreneur Y was operating independently. They might have both known about the $1.8 billion deal, but knowing about it does not mean you have access to it. You need to run in certain circles to get exposed to deals that involve other entrepreneurs in those circles.
What led Aliko Dangote to manufacturing? While trading commodities, he took note of the huge market in Nigeria and decided it was better to manufacture what he was importing.
Before founding Apple, a 12-year-old Steve Jobs landed a summer job at HP and the rest is history. It is this type of exposure that allows entrepreneurs to gravitate towards their destinies.
If you look at the rain, you will never plant. Get out there; attend conferences, travel to various countries, network with successful business leaders and read as much as you can. Whatever you are exposed to can only broaden your current view on the world around you.
By exposing yourself, you also expose your company to other markets and greater opportunities.
You can’t afford to stand idly by and wait for everything to fall in place. Business, and life, is a fight for territory – the moment you stop fighting for what you want, is the moment you will have lost.

Tag: Globalization

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Why Now Is The Time To Invest In African E-commerce

Nothing was Achieved by Being Idle