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Competing to Kill or Competing to Grow, Konga Caught in the CrossFire

Competing to kill
Konga
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If for any reason Konga delivered your order lately, now is not the time to begrudge them. Now is the time to look at reality. Is it a good time?

Maybe, because a recent tweet chat between @iaboyeji and Shola Adekoya (@Sholaextra) gave more insights into what may have caused the demise of one of the country’s first e-commerce business.

Nigeria’s e-commerce industry has seen some level of fraud, where-in the staff are not exempt. A Qz article reports, “Jumia, Africa’s largest e-commerce operator, is struggling with internal fraud, legal threats even as losses widened in the second quarter.”

This was a result of a recent discovery that the staff generated as much as 16 million Euros from seemingly illegal and shady deals.

“Cumulatively, the improper orders generated around €16 million ($17.5 million) in gross merchandise volume (GMV) value between the last quarter of 2018 and the first two quarters of 2019,” QZ holds.

When the staff is neck-deep into such level of fraud, to what extent can the executive be exempted? Oh, the executive may also have had their own share of fraud accusations. This revelation was laid bare in a post mortem tweet-thread created by the founder of Konga, @SimShagaya.

Iroko TV’s founder, Jason Njoku reacted to the tweet with an article he wrote over a year ago;

The article describes Jumia’s numbers hence, “That top line GMV growth number is straight-up fantasy. Like Disney Land. It’s the most epic vanity number in the world.”

From 2012 to 2016, the e-commerce space in Nigeria was almost a 2-horse race, and just like almost all aggressive competition, businesses likely throw legality to the air.

However, for a two-horse race, illegality by a competitor may be adversely affecting not only the company’s investors and clients but the competitor’s. In a case you overblow your numbers to drive some more investments, chances are that you may be having the competitor’s investors looking silly.

One could speak in parables all day, but this purportedly is the reason why Konga is no more. Purportedly impatient investors wanted a Jumia figure without knowing that there may be few questions to them. Sim Shagaya explains that such behaviors really hurt Konga, because his investors would often ask him why he is unable to meet Jumia numbers. This is a number Shagaya describes as “make-believe”.

You know the classic example of people lampooning you verbally about your friend who is better behaved, but you know he/she is the real ‘bad guy’? That hurts. On many occasions you would want to air the truth so the world knows you are not the worse.

On this particular occasion, Sim Shagaya aired his grievances and the rest is history.

This background is important to understand some of the tweets that arose among Jason Njoku, @Iaboyeji and Shola Adekoya, the person who took over from Shagaya at Konga.

@JasonNjoku made a tweet about competing to kill, and that spelled the beginning of a Tweet-chat with @iaboyeji, @Sholaextra, and said @JasonNjoku, with cameos from @simshagaya, the founder of Konga.

In the article, Njoku writes, “I’ve always kept an open relationship with my competitors but that is where it stops…At Iroko TV, we compete to kill.”

Harsh?

Some of his followers would disagree with you, with their comments, “When you compete, you go for the blood.”

After Jason makes the tweet, @iaboyeji who has a reputation for holding down his own albeit several oppositions replies.

@JasonNjoku did not ‘feel’ @iaboyeji’s stance as he rather implied that his generation of Nigeria techpreneurs did not meet enough, to be desired. @Iaboyeji insists that Nigeria’s ecosystem may be gaining far better with the new generation than Jason’s generation.

In the thread, he tells Jason that instead, of funding just his own production studio, he could support many independent creators. @iaboyeji may just be referring to Iroko’s sole funding of Rok Studio which recently got acquired by the Global Film giant, Canal+ last 2 months.

@iaboyeji goes on to namedrop founders who he thinks may have ‘competed to kill’, to the detriment of the ecosystem, “There is Tayo who never had API’s for developers until recently or Interswitch which used to charge $500 for access to APIs”.

@iaboyeji, however, adds, “Konga which could have empowered 3PLs and market places much earlier but didn’t until there was trouble…” At this point, @sholaextra who boldly has ‘Konga Alumni’ on his bio stepped in.

Shola pointed out Konga’s contribution to MaxNG, a player in the tumultuous ride-hailing market, and some 40 3PLs.

@Sholaextra’s reply tried to absolve Konga, of the ‘competing to kill’ accusation. But that is not enough. He continues, delving into payment and all.

Flutterwave is a payment company which prides itself as the gateway to Africa. It was co-founded by @Iaboyeji, and that may be the reason why Shola made the reference. In all, Shola while showing that Konga helped other companies grow, showed the extent to which they went in saving Konga– to the extent of developing a payment solution for their platform.

However, when investors are seeing amazing figures from a competitor, they usually do not care if you developed your own payment platform or sponsored 40 3PLs.

What often matters is the words of the rapper 50 Cent, “Pay me my money by Monday.”

At this point, @iaboyeji admits “that’s awesome,” and adds, “but in an ecosystem too focused on individual success to enable ecosystem, we failed.”

Now you understand why Njoku’s ‘competing to kill post’ is relevant? As a business, you may just be killing another business with your ‘black hat’ strategies which may include over bloating numbers to entice investors. If the legal battles come out against Jumia, then they may have transcended the dark realms of ‘competing to kill’ to the fiery furnace of crime.

Very likely, Jason’s ‘competing to kill’ strategy in no way allows the competitor any respite, but it also has a human face and is seemingly legal.

The Nigeria bike-hailing industry presently offers a good example of ‘competing to kill’. Read here for the full story.

Gokada had to shut down operations temporarily, to rebrand. They came back with their Bikes looking like ones you see in a typical ‘Bikers for Trump’ rally.

You know what Oride did?

A Twitter user has reported riding from his house to the office for just N20. Recall that Opay, an umbrella covering Oride got $50m investment, recently. For an economy with a $80/month minimum wage, that is a lot of money.

In all of these, a business will always likely go for the best strategic choice available to it, whether it means to ‘grow or kill’ competitors. What is not right, is to ‘hurt competitors’ by manufacturing numbers. That may not be a good way of ‘competing to kill’.

What do you think?

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