DealDey Becomes the Latest Nigerian Online Business to Crash, Unconfirmed Reports Suggest

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DealDey Is the Latest Nigerian Online Business to Crash, Unconfirmed Reports Suggest

Another Nigerian internet giant has reportedly collapsed. According to reports swirling on the internet, DealDey, one of Nigeria’s biggest eCommerce platform, is getting shut down!

The story is yet to be confirmed. However, according to TechPoint, DealDey actually closed shop way back in early December 2018. According to them, this was the last time DealDey users saw any deals on the platform or any of its social media platforms.

Staff have reportedly been let go and the company’s office has also been closed since.

Since December, users have increasingly complained that the website’s workers no longer respond to enquiries and phone calls. These have helped to fan the speculation that the platform has truly collapsed.

Yet, there’s been no confirmation from either former workers or operators of the platform.

Founded by serial entrepreneur, Sim Shagaya in 2011, DealDey was the forerunner for Konga and many other ecommerce websites. But the platform was different as it focused on helping users find discounts on products, services and event tickets.

Thanks to early advantage, DealDey looked poise to play a big role in the Nigerian ecommerce space. Of course, Nigerians love “awoof” (getting things on the cheap), and they value platforms that provide this sort of service.

This helped DealDey snatch a $5 million equity funding from Sweden’s Kinnevik investment company.

But things escalated really quickly from there. DealDey shaved over 60% of its workforce following the deal. And in less than a year, the eCommerce platform was sold to Ringier Africa Deals Group. According to one source, DealDey was sold for $5 million rather than the $75 million it originally valued itself.

Fate of Online Business In Nigeria

The collapse of DealDey is just the latest in a long list of struggling (and failed) internet companies in Nigeria. From Efritin, to Konga, to Careers24, speculation is getting widespread that Nigeria is not the right market to launch an internet business.

To be fair, the collapse of DealDey is not unexpected. Its business model was in direct competition to the more traditional eCommerce models of Konga and Jumia. With the latter two offering products at regular prices and crashing prices during peak seasons or promos, DealDey was extremely vulnerable. In fact, to many users, DealDey had completely been forgotten.

Yet, aside from DealDey, the struggles of Efritin, OLX, Konga and even Jumia, suggests that Nigeria is a difficult market regardless of its population potentials.

With the purchasing power of citizens quite low, a high cost of operation in the country, alongside lack of solid internet laws and identity management, internet businesses face several struggles.

Meanwhile, developing the infrastructure for success has been difficult as the requisite funding and support do not exist.


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