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MoboFree is an African-based mobile marketplace with a social twist that allows people to buy, sell and swap products with each other. The goal for the startup-turned-growth-company is to position itself as Africa’s leading mobile scam-free marketplace while striving to favourably compete with a much richer OLX.
I sat with the CEO and co-founder of MoboFree, Cristobal Alonso in Lagos, Nigeria. We spoke on matters arising including the present and future of MoboFree — plus the difficult task of getting eight out 10 Africans to know what MoboFree is really all about.
Ventureburn: What is the current status of MoboFree’s operations in Nigeria?
Cristobal Alonso: We’ve been in the Nigerian market already for two years, the difference is from a brand point of view many are only hearing from us in the last six months. Part of our strength is we have a strong initial amount of supporters and users and we are growing based on those. If you look at our figures more than 50% of our traffic is organic. We came on time and we are just making efforts to push the brand.
Obviously there is lot of noise; there are lots of brands that have lots of money than we have — Jumia, Konga, OLX. We are trying to be flexible; we have the capacity to tailor our product to meet local needs. We are entering the market at the right time.
VB: Which specific demography are you targeting?
CA: Clearly today, we are enriching people between 25 to 45 age group — people with the willingness to buy or sell something, people that are always with their smartphones, and people who are willing to establish trust by talking to each other — not by recommendation, they just want to talk to each other to start a relationship. That’s basically our core market. Lagos, Abuja, Kampala in Uganda — people who are looking for mostly mobile phones, clothing, computer, and want to buy a car, a house, but are not buying it right now.
Our ideal customer has been in the university or had some form of studies. That’s the guy talking to us.
We are targeting 25% of the middle class — the people who are just going up in their lifestyle. They don’t have an iPhone, they probably have a BlackBerry or just got their first smartphone. These are the kinds of people on MoboFree presently.
VB: What strategies have you deployed, which ones are you planning to deploy?
CA: The market favours the very new. What we are doing right now is to work on SEO and we have seen 250% growth which is interesting because when I look at the keywords they are not anything fancy. We are generating a lot of content that would attract people to our site. We are also working on getting classifieds. We have the biggest amount of classifieds — similar amount of classifieds as OLX, even bigger.
The product is good, the product is actually simple. You can have a very good experience on a feature phone, you can get to your ad in three clicks. If pictures are an issue on your phone, you can have pictures off. We always strive to give you the best experience on your device. Users get best experience on MoboFree. We have six different sites in our way to give best experience on your device.
Of course we want to make money but today we will not sacrifice a good user experience for adverts. When you are looking to buy a smartphone, the last thing you want to do is to start clicking on an ad. We never sacrifice experience because of monetisation. And I think others may be doing that, but it is against my philosophy. We will not do that until we have gained people’s trust.
VB: Do you really think Nigerians need MoboFree?
CA: Completely. I think the Nigerian market needs someone who is providing good user’s experience that is not just coming with a standard product that is being used in other parts of the world. They need somebody that they can send emails and when you send us emails we reply immediately.
We monitor the forums. Nigeria needs somebody who cares about them — about the product, how they feel about the product. We are also working on a platform that is helping people to trust each other by talking to each other, placing pictures which when is not good we call the person to amend. For sure they need us and in the future, as payment gets to be electronic, as more technology advances, we will continue to innovate for the people.
VB: What are your monetisation strategies even though many online users in Nigeria are still reluctant to put their credit card details online?
CA: Presently we make money when brands run campaigns on our platform. For sure we are a good destination for brands to advertise on. We are talking to brands, we are talking to media agencies and they are placing ads on our site. That’s what we are doing today. In the future, I see more possibilities — providing more services to SMEs such that when they place ads they can get additional analytics services so I see more possibilities for monetisation for us by providing additional services to SMEs.
The market is hungry for market intelligence. Data is relevant for the major companies, especially those producing fast moving consumer goods to be able to predict and understand the patterns and behaviours of consumers. They can explore our data and the product can serve as a market research tool to companies.
The last one is to partner. Everybody is trying to become unique. Overtime you begin to understand that your competitors could also be your partners. Going forward we will see more and more partnerships to launch products together to create a richer ecosystem. We maybe competitors but by partnering we will be getting a lot more people on the internet at the end of the day. This is good for everybody.
We need many more partnership opportunities. Even the mobile operators at some point would realise they need to become partners and not just vendors or the ‘big guys’. Monetisation will still be an issue, we are not going to see, yet, a US$20-million to US$30-million online company revenues in the next two to three years, and it is going to take longer than that.
There is something unique about Nigeria. You cannot do online without offline. You need to combine both. Ecommerce giant Jumia had similar experience when they came into Nigeria.
They realised they couldn’t just focus on online only, they had to get involved in lots of offline processes and they had to get their hands dirty.
We have our agents walking the streets and introducing the product, we have to do many more — maybe put up kiosks and safe places to trade the goods. To ensure monetisation, you have to play in the intersection between offline and online.
VB: What do you expect to happen to take MoboFree to where you desire it to be?
CA: Our key defining moment is to raise the brand awareness — the moment we will ask ten people about MoboFree and eight will tell you they know about the product. For now, one of the ten might know you, two to three may say you are like OLX, eBay in Africa, and four will say they have no idea of what the product is all about. We are working on raising brand awareness in the coming year to ensure that many more people know us in two seconds — the brands and the targeted market.
I’m hoping it happens next year although it might take us two years. When we combine our activities with brand awareness, we will get a completely more powerful and successful MoboFree. I think that is the tipping point for us — it’s the brand awareness.
VB: You could achieve brand awareness by spending money. Is it that you have a lean pocket or working with a shoe-string budget compared to others in the market?
CA: Of course we have less money. We are not a startup anymore, we are a growth company and I don’t have US$10-million to spend. On the other hand this makes you much smarter about how you spend more. I care about every Naira that I spend obviously we cannot battle guys that have 20 times more than me but I can still compete with those that have five times more than me. We are growing and we are continuously raising money from our investors, we are raising our visibility and obviously we are looking for money because money is important for us but at the end of the day I have to prove that I know how to use the money.
This is similar to the comparison between Jumia and Konga. To me, Konga has less money but they take care of the money a lot.
VB: If I ask you to give me a figure, how much do you think would you need to put MoboFree in everybody’s mouth?
CA: I will say that you need to start spending US$50 000 to US$70 000 a month entirely on marketing alone. That’s the kind of money that allows us to play fairly. Many people are spending that kind of money and I believe we are very close to be able to do it very effectively. If you are really serious about conquering this market, you may have to spending half a million to $1 million a year.
VB: Is MoboFree profitable now?
CA: No we are not profitable, we are a growth company working on classifieds model which takes 6 – 10 years to become profitable but the moment they reach that, profitability is very high. That’s the model that we have. We are Africanising ourselves; we try to make money to attract investors. We are not the only ones not yet profitable – OLX is losing money, they are losing a lot of money but the big bet is at some point we still start generating revenues. The battle is still interesting but bloody and will be so for 2 or 3 more years in this space. What is the pattern of growth outside Nigeria?
We are growing a lot in Uganda – we are looking at the East African corridor all the way down to Zimbabwe. These are good markets for us. Ethiopia is a market to enter, the only problem is the very low penetration rate (about 2%) but it’s a huge market. There is Ghana in West Africa, including Ivory Coast. There is also Cameroon although not many companies have become very successful yet in Cameroon but we are monitoring how Jumia is doing there. But right now, it’s the East African corridor that we will be going this year.