Olumide Olusanya Has Strong Words for ECommerce in Africa as he Announces ‘Shut Down’ of Gloo.ng
One of Nigeria’s “most successful” ecommerce companies, Gloo.ng, is set to shut down its operations in February. The notice of shutdown was made known by founder, Olumide Olusanya via a series of tweet in which he gave no quarter as he unleashed on e-commerce in Africa.
Founded in 2012, the online glocery startup was one of Nigeria’s earliest and well known ecommerce companies. But all that is about to change, as the startup is set to shutdown its e-commerce business and start a new business it has been working on for 18 months.
Gloo will be selling off its entire online goods at a 50% discount.
With this, Gloo joins the league of ecommerce companies to have closed shop in recent times. According to Mr Olusanya, he started thinking about steering Gloo out of the eCommerce sector after the recession of 2016.
Is Ecommerce Profitable in Nigeria?
This is one question that has haunted many investors. But after 7 years in the sector, Olumide Olusanya certainly knows better than most and condemned ecommerce in Nigeria with very strong words.
He made it known that ecommerce might not be profitable in the next 10 years. This is because despite the population potentials, there is no strong need for it yet. He also noted that the Total Addressable Market (TAM) available is not big enough and service delivery frictions are too high to find a profitable model.
He also revealed the biggest challenge he faced with Gloo as an ecommerce startup, funding.
The recent happening in the Nigerian ecommerce space validates Olumide’s opinions. We have seen companies like Efritin, old Konga, OLX and most recent DealDey fail in Nigeria. Even Jumia has struggled in recent times.
This suggests Nigeria is a difficult market for the eCommerce industry. And on the Chief Glootian’s part, he would not have floated an ecommerce company if he knew what he knows now 7 years ago. But then he probably wouldn’t have found the new secret business he plans to start next month.
With all these recent happenings, it’s time for entrepreneurs to think again as they venture into the ecommerce space.
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