Yay! Another one from the stables of Eloho! It was good to open Medium and see your take on this this morning.
I’ve been thinking about this since the buzz on Twitter when this report broke and my ultimate question was the same you’ve arrived at. Is the market really big enough? Nothing else really matters if the takings are poor. I dare say there’s a significant difference in posting pictures on Facebook and actually spending money online for a purchase.
In segmenting the market I’d probably be one of the people supposed to be catered to. I definitely have no qualms buying stuff online and have been doing so for about 7 years. The number of times I’ve bought something from Konga/Jumia? Once (a gift to be delivered to a friend because I wasn’t home). The number of times I’ve received something purchased from Konga/Jumia? One again (a gift coincidentally). I don’t really do much on the platforms because there isn’t much to buy really (books+electronics are my biggest spend), that may change as I spend more time in Lagos.
My point? The best case number of active users is probably a much smaller fraction of the apparent market size on first glance. That greatly reduces the scope for scale and that’s unfortunate.
I have nothing but mad respect for those who are trying though. Paraphrasing a conversation I had with one of my friends who is in the tech space/e-commerce space “…maybe you’ll blow, maybe you won’t …you guys are literally creating the space, charting a path that’ll either lead to your success or someone else’s down the line.”
Unfortunately for some companies, the reward is in heaven.