In Nigeria, e-commerce is growing, and with the Central Bank of Nigeria (CBN)-driven cashless policy which has eased and simplified payments by consumers, more firms are joining to create platforms to enhance payment for goods and services. One of them is Konga.com which offers consumers, who pay electronically via its KongaPay platform, five per cent discount, writes COLLINS NWEZE.
One thing consumers across markets want is quality service, and at this time quality service includes a seamless electronic payment plan that makes it easier for them to buy, pay and even get a discount on their purchases. Acting Chief Executive Officer, Konga.com, Shola Adekoya, said the cash-less policy introduced by the Central Bank of Nigeria (CBN) in 2012 has made payment easier for his customers.
He said his company was giving consumers a good deal and providing them quality service on KongaPay.
The Konga boss, who spoke at the last Economists Conference, in Lagos, on the theme: “Meeting the Consumers’ Needs”, said the cashless policy framework and its implementation by the CBN motivated his firm to develop KongaPay, an e-payment platform that enables online shoppers to buy, pay and take delivery of their goods, at a five per cent discount.
KongaPay is similar to what is seen on Amazon platform with its one-click payments. The payment option has been integrated with commercial banks and it has strengthened the trust between Konga and its customers. Konga’s online platform protects shoppers against fraud when they release their bank details online.
On the business environment, especially with the foreign exchange crisis, Adekoya said the Fast Moving Consumer Goods (FMCG) segment would continue to thrive as long as operators are serving people’s daily needs.
“What we saw in the foreign exchange and in the economic decline was just a resetting. People that used to buy Iphone now buy other middle-tier phones. People are probably less brand sensitive. I think it is most of a reset than downturn for the FMCG sector. Even where revenues have dropped, consumers will continue to buy because they are actually daily needs.
“Except you have to go into luxury goods, that is where you will see a possible drop, but in our category, we are servicing daily needs and people will continue to buy, but what they buy may be different when they become less sensitive to brands.”
Online payment deepens
Adekoya said online payment is becoming a popular decision for shoppers because his company also delivers the goods to their destinations. “You will find out that when you have lower propensity to spend in the economy, people look for places where they can get real value for their money and the online at Konga is one of those places. We are seeing more people come online to make purchases. We are seeing more people buying because they are looking for deals they will not readily get in other places,” he disclosed.
He said when customers buy at Konga.com, they are presented with several payment options, adding that KongaPay is another value-proposition the company is giving to Nigerians. Buyers that pay through the platform get five per cent discount of whatever product they buy.
On how it works, he said: “Consumers need to link their cards to the KongaPay account and make the payment. Be it a phone, laptop, foods, anything that you buy and pay with the KongaPay, your five peer cent discount is guaranteed.”
Payment security
Adekoya said trust and security of customers’ transaction is a very big item on the firm’s agenda. “We always monitor customer feedback. So, there are few ways we manage that. Firstly, we have a whole floor of agents working on safety. Anything that sounds dodgy, anything that does not look right, we bring it down very quickly. Then we follow up with merchants, we follow up with even the shippers of the goods,” he said.
Konga, he added, has a team that ensues that customers do not lose out on the platform. “You will never lose your money on Konga. That’s what we put in place now. On top of that, we have also come with KongaPay. Aside the discount that goes with paying on KongaPay, which is a prepaid plan, the delivery of the goods is quicker.
With that payment model, we do not have to start worrying about cash, but more importantly, the money is held in escrow Nigerian bank account. “So, we do not take the money until the deliveryof the goods is made,” he said.
Besides, customers that pay electronically get extra guaranty, including opportunity to get back their money if they are not satisfied with the products. “So, one of the benefits of KongaPay is that if there are any problems, to return your money will be within hours,” he said.
Adekoya said pricing is right for customers that buy from Konga. “When I compare prices, I know this for a fact that we are cheaper than what obtains in the local market. Pick up a few goods and compare. When we are doing deals, we find out that some of the customers in those areas come to buy from us for resale. I know for sure that our goods are cheaper than what obtains in the offline market. And we are particular about giving value to our customers,” he said.
He explained that the e-commerce industry has a long chain of stakeholders. But his company ties as far as possible to get closer to the Original Equipment Manufacturers (OEMs), through the chains and deliver value to the customers.
“We try to cut the long list of sub-dealers by going straight to the OEMs to deliver value to the customers. If we do not get directly from them, we get from their first distributors in Nigeria, selling straight to the customers,” he said.
Cashless banking
Adekoya said the cashless policy is beneficial to the e-commerce industry. The policy, he explained, was meant to ensure price stability through effective monetary policy; sound financial system and efficient payments system. It was a critical part of the payment system modernisation, designed to promote the use of Automated Teller Machines (ATMs), Point of Sale (PoS) terminals, web payment, online transfers and even mobile money in banking transactions instead of relying on cash.
“The more we go cashless the better it makes e-commerce. Most people do not have alternative that even when you go offline you have to do payment through e-payment. It means that we do not work too hard to convince you to pay online. One of the challenges we have is that even in offline transactions, people do not trust their bankers’ different types of electronic payment. So, the government is pushing towards cash-less policy helps us as an industry,” he said.
“I think for us, is that what we found most impactful is that with KongaPay proposition has taken a good chunk of our payment delivery, orders. The beauty of that is that as people get more comfortable with the KongaPay solution, they see how easy it is and if you want your money back, you see how easy it is.
“People are just adopting it more and more,” he said.
He explained that at present about 10 per cent of the orders were coming through KongaPay. “There used to be issues about people seeing something online and clicking on it only to buy and goods delivered for them to see that the quality differs. In Konga, we have 40,000 small merchants that list their products on Konga. And we manage process with technology, as people come online they are buying, in some cases, order from the merchants.
“We always want e-payment so that customers can hold their money until they are satisfied with the quality of the products, we don’t actually pay out to the merchants so as to protect the customer,” he said.
Secondly, Konga looks out for items that do not look right. “We have team of reviewers going through your pictures and descriptions to ensure that it is right. We also vet the merchants. You go through training on e-commerce to ensure they understand better. The fact that I have a black phone and have ran out of red one, does not mean I should give the customer black when he has requested for red. All these are the ethics. So, we build our own logistics network. So, you have to give it to us to ship it. At that point we will ask is it the right items? And if they are not, we will compensate customers either by replacement or through other means of compensation if they experience that,” he said.
The merchants, he said have been trained up to a point where the company feels very comfortable with what we have on the ground.
Market share
He said the company’s share of the market is difficult to say, because transaction figures are not public. “One of the challenges is that in the FMCG sector is the prevalence of lots of informal trading. There re not much research in the sector that will enable operators know their total share of the market but we are doing very well,” he said.
“What drove us into the KongaPay are the issues we have seen with bank cards. People were trying to make payments online but some of their transactions were declined and we cannot get back to the customer to explain why. But now, with KongaPay, we can tell exactly what is wrong, why it is wrong. Konga has to get a mobile money licence to do this. So, we understand when there is an error, we tell the customer and that helps with coming up with a solution, unlike what we used to have in the past where payments fail, and we cannot tell why it failed. We used to have higher percentage of transaction failure but that has been fixed with KongaPay. We have little or no payment issues at present,” he further explained.
He said the integration to local banks is very easy because there are gateways that act as international standards that the company complies with and expects the banks to also do the same thing. So, there are international languages that you use in integrating the technology.
Same-day service in Lagos
Lagos is one of those states where Konga is very prominent in terms of its delivery capacities. “In a few weeks, we will be launching same day services, where if you order by Konga, there will be some products that will be delivered to you same day. So, in terms of delivery, we have a very strong network in Lagos. That is what Lagosians want same day service.’’
Continuing, he said: “There are just very few countries where you find this number of people using data on their phones. In terms of the future, when you look at the demography of Nigeria, we are a very young country. Nigerians are savvy and know how to use technology. I see a brighter future for Nigeria as the young population get older and get into work, and have more purchasing power, it can only get bigger and better.’’
“Acquisition is not big in our agenda. As we mature, no at this point in time, we are just focusing on giving the consumers the best value. Nigerians are the consumers. Anybody that wants to buy anything, to us, is the consumer. We believe we can make Konga the destination where consumers can buy their daily needs. So, consumer for us is as wide as the whole of Nigeria, and ultimately, Africa. We do not just think about Nigeria, we think about Africa. So, everybody is a consumer,’’ Adekoya added.
