Nigerian e-commerce company, Konga, has set its sight on an income of $10 million every day by 2024. This ambitious projection was disclosed by the company’s Co-CEO for Online, Nick Imudia.
This ostensibly means Konga is eyeing a yearly turnover of about $3.65 billion by 2024.
According to Nick, this would be a step by step process, culminating in two major milestones. The first milestone is that by 2022, the company plans to achieve $5 million daily turnovers on its way to hitting its ultimate 2024 milestone.
With the high level of trust Konga has gained among shoppers in and out of Nigeria, it is safe to say Konga is ready to scale big in the early part of this third decade. Therefore, we are targeting a $10 million daily turnover by 2024. We shall attain half of this target at least by 2022.Nick Imudia, Co-CEO (online) Konga Group
According to the CEO, the e-Commerce would be banking on its renewed commitment as well as the confidence of its stakeholders to reach this target. It also plans to make the most of its newfound efficiency which has led to consistent growth.
While appearing to acknowledge that the company has suffered losses in recent years, the CEO, however, revealed that his company has consistently and significantly reduced losses over the years. This will be key if it really hopes to achieve its four-year target.
“Konga has grown over eight times since the business was acquired by the Zinox Group,” Imudia said. “We have consistently reduced our losses by nearly 70%. Added to this is the addition of new and thriving business units such as Konga Travel, among others, all of which have enjoyed huge growth and massive acceptance by our rapidly expanding customer base.”
Surviving Nigeria’s erratic e-commerce sector
Nigeria’s e-commerce sector hasn’t really been stable despite the huge potential of the market. While there is huge competition in the sector, the biggest problem remains the Nigerian market itself.
The purchasing power of citizens is quite low, there is a high cost of operation in the country and lack of solid internet laws and identity management which has made internet businesses struggle.
It isn’t wonder then that several eCommerce and internet platforms like Dealdey, Efritin, OLX and Careers 24 have either packed shop or devalued recently. Meanwhile, developing the infrastructure for success has been difficult as the requisite funding and support do not exist.
Konga however, is looking to not just survive under virtually the same conditions, but also to thrive.
How would Konga pull off its 2024 target?
There’s no doubt that Konga’s $10 million per day target is a herculean one. In a market that has seen Jumia, widely considered the biggest e-commerce in Nigeria struggle and not exactly looking optimistic about the future, it begs the question, how does the e-commerce company intend to achieve its lofty aspirations?
While the CEO Imudia claims that his company has put necessary machinery in place to achieve the goal, the exact specific nature of this machinery remains, at the very most, vague.
The CEO also claims that the company has reduced its losses by about 70% but this remains word of mouth as there is really no public record to back that up. But even then, for a company still counting losses, hoping for such a huge turnaround in so little a time might seem like overreaching.
Revisiting Konga’s proposed IPO
Maybe it’s time for Konga to step up its plan to list on either the New York or London stock exchange exactly one year after it first touted the idea. If its growth is solid as we hope (if it has figured out the market as it claims) then getting investors onboard via a listing wouldn’t be too much of a problem.
A listing would see Konga valued at about $3.2 billion.
It is worthy to note, however, that Jumia, Konga’s biggest competitor in Nigeria, listed in the New York Bourse last year. While that has largely exposed Jumia to scrutiny and since seen its share price crash, it, however, provides a solid and realistic valuation for the business.
It has also made it a more open company, recently declaring a loss in its 2019 financial report.
New verticals, new businesses for Konga
But Konga has always touted the idea of delving into new businesses and verticals that Nigerians would find very exciting. Konga Travels is one such vertical the company claims is growing very fast.
KongaPay is another of its business which is virtually a bills payment and transaction dealing platform. Very much like JumiaPay, Konga also gives users of its e-commerce the opportunity to pay with KongaPay.
Yet, the company is not done as it planning to launch new verticals in the not too distant future.
‘‘We will be rolling out additional new business units in the weeks and months ahead” Nick Imudia said. “These additions will excite our customers and expand the Konga retail revolution to new verticals. To make the shopping experience a memorable one for our customers, we have also lined up various value-adding services and promotions throughout the year.”
If these new business units and verticals do as well as the CEO is optimistic that they would, then the future might just be Konga’s to seize.
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