One of Nigeria’s largest eCommerce company, Konga, has carried out more job cuts in the first few days of this year. This was according to people with the knowledge of the matter.
According to sources and some of the affected staff of Konga, not less than 70 people were laid off immediately after the company opened its doors for full operations for the new year.
It would be recalled that Konga had laid off over 300 people before the holiday season. According to people familiar with the matter, the figure represents over 70% of its workforce.
Sources within and outside the company claim that the series of job cuts is not only attached to the company’s difficult operating status quo but a move by certain new owners who are trying to cut costs and streamline the company’s activities to certain areas that will stop the financial haemorrhage.
While announcing the job cuts last December, Konga disclosed it was getting out of many things that have been seen as a core area for a typical eCommerce company in Nigeria to focus. The company said it was no longer going to allow unpaid orders, stop delivery of goods on behalf of merchants and also charge all merchants for posting their products on its website.
While this was a bitter pill to swallow for both customers and merchants who were used to the old order, the company justified the move as a necessary antidote from its debacle.
Should it be true that there are new owners controlling the country’s second largest eCommerce company, it will further give credence to an earlier report by PageOne.ng that Naspers and Kinnevik (perhaps now the former owners of Konga) were in discussion with Interswitch Group for the latter to acquire the company.
As time goes on, the Interswitch acquisition of Konga became a pipe-dream. Unconfirm claimed the former back out after a thorough analysis of the facts behind the figures. It is not clear whether there is any credence to the entire story. It is also difficult to know at the moment whether the ‘new owners’ are actually Interswitch.
Jumia, Konga’s direct competition in general merchandise had taken similar and at the same time a divergent way to get out the lull in the eCommerce business. Lay-offs were done is a drastic manner by outrightly collapsing sub-units and separate operations into one entity called Jumia.
The diversion for Jumia has been the sell-off of units with core operations with a divergent kernel from a typical general merchandise eCommerce company. So, for instance, Jumia House was sold to Tolet.com.ng for an undisclosed amount. The gain for Jumia was the database, even when many duplicates would exist in the datasets, it did not matter, at least some monies are recouped from the sale.
As for Konga, there are many questions left unanswered. Has Kinnevik sold of its stake? Has Naspers finally exited Nigeria’s eCommerce space? Who are the new owners and what are their plans going forward?
A possible solution to these puzzles might surface when Kinnevik discloses its first quarter result for the year 2018. Despite the daunting conditions Konga faces, the company has come a long way from a low-key retailer of baby products to a mega-library of gadgets to consumables, its current state is part of the milestone every company morph into before stabilising.