Business
Kaymu strives to be the eBay of Africa
At Computer Village, Lagos’s famously overcrowded tech-retail center, a Samsung smartphone wholesaler receives an email telling him a buyer in the neighboring Ogun State has placed an online order. The Samsung device is delivered three days later and the buyer pays the deliveryman. The key to the whole transaction was a website that hopes to become the eBay of Africa: www.kaymu.com.ng.
Kaymu, a subsidiary of Africa Internet Holding (AIH), hopes to take its online marketplace for retailers and entrepreneurs continent-wide, on a model already established in North America by eBay, in China by Alibaba Group’s TAOBAO and in Latin America by MercadoLibre.
Unlike conventional brick-and-mortar retail, the online platform offers storeowners a freesales consultancy. It also increases their number of sales and marketing channels and in some cases, helps them save ons hop rent and electricity costs. A business that does well on Kaymu may not even need a physical store.
In 2012, Kaymu established its flagship operations in Nigeria and Pakistan. The venture has since grown to cover seven countries in Asia and 10 in Africa, including Morocco, Rwanda and Tanzania, and there are plans to expand into five more African countries during the first quarter of this year.
Kaymu Africa’s managing director, Elias Schulze, says the company’s entrance into new markets is heavily driven by fairly simple but meaningful metrics such as increasing internet penetration, GDP, GDP per capita and population size. Management is bullish about the important pockets of opportunity to be found in virgin markets and encouraged by an improving economic outlook and renewed government efforts across Africa to expand broadband infrastructures and develop favourable information and communications technology (ICT) policies.
The company’s biggest operation, Kaymu Nigeria, records thousands of sales monthly and has a staff of well over 50 people. In some markets the company charges commissions, though it does offer “grace periods” to first-time sellers in order to woo them and deepen its consumer base.
Schulze argues that although the market conditions may not always be perfect, the timing is. “It’s of course much better to establish an online marketplace before the crest than five years later. It’s better to be an eBay in 1995 than in 2005,” he says in support of the company’s early-mover competitive advantage.