Nigerian e-commerce startup Gloo.ng has carved out an e-commerce niche separate from the likes of Jumia and Konga in order to claim a share of the country’s fragmented retail market.
Founded in 2012 as BuyCommonThings.com but rebranded to Gloo.ng in 2013, the company specialises in delivering affordabale supermarket goods to the doorsteps of clients on a same-day basis.
“Gloo.ng avails her clients convenient, efficient and affordable means of shopping for supermarket goods, saving them irreplaceable time, needless stress and valuable money, thereby enriching their lives with the happiness these savings facilitate,” chief executive officer (CEO) Olumide Olusanya told Disrupt Africa.
E-commerce is an increasingly big deal across the whole of Africa, seeing large growth and sizeable investment. However, with Nigeria’s population and economic growth, the country has been identified as a major opportunity.
Minister of communications technology Omobola Johnson says Nigeria’s e-commerce market has the potential to generate US$10 billion annually for the government, having attracted more than US$200 million in foreign investment so far and created over 12,000 jobs since 2012. Though the bulk of the attention – and investment – has gone to Jumia and Konga, Olusanya is confident Gloo.ng has carved itself out a lucrative niche.
“We don’t see Jumia and Konga as primary competitors. Their focus is in the fashion and mobile devices space, our focus is in the supermarket space. We are Nigeria’s biggest online supermarket.”
Though Olusanya said he came up with the concept of the company after observing the difficulties his wife faced in shopping at supermarkets, the problems the company addresses and the market it is attempting to gain a share of are much bigger.
McKinsey says Nigerian retail, which is already the third largest contributor to Nigeria’s gross domestic product (GDP) at 16 per cent to the total, could see US$40 billion in food and consumer goods by 2020. But Olusanya says demand for efficient modern supermarkets in Nigeria has dramatically overshot supply.
“In a country of over 170 million, we only have two supermarket chains, both with only 15 outlets between them in the entire country, controlling a one per cent share of a US$44 billion market while the remaining 99 per cent is extremely fragmented,” he said.
“Gloo.ng is a play at using technology to leapfrog Nigeria into the future of modern supermarket retailing. We want to make e-commerce the widespread means of modern shopping in Nigeria.”
The response from customers and investors has been positive. Gloo.ng currently serves the whole of Lagos and plans to expand to Abuja and Port Harcourt this year. The site currently has 7,000 users per month, up 800 per cent year-on-year. And investment has been forthcoming, with the company raising over US$1.6 million thus far and closing in on a much larger institutional investment.
Though Olusanya said investors are correct in considering investments in e-commerce startups a long-term play, he sees the sector as “extremely exciting” and feels the limitations are over-emphasised.
“Nigerians and Africans are using e-commerce to leapfrog into the future of retailing the same way they recently used GSM to leapfrog into modern day telecommunications,” he said.
“The loudest stories still being told are of the ugliness of the past and not of the massiveness of the socio-economic impact on Africa this opportunity represents.”