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The last time I spoke to Raphael Afaedor in person, he was still the co-founder of Jumia, his face and that of Tunde Kehinde’s had just been on Forbes and they were the focus of the foreign press including CNN. I was able to drag him aside in the hall where Jumia was celebrating its first year anniversary and when I asked him what was next for ecommerce in Nigeria, he said the focus will continually be on satisfying the customer — even if he or she expresses interest in buying cows online.
He subsequently left Jumia and founded online grocery delivery service Supermart.ng, but he didn’t leave the interest in satisfying the customer behind as the company continues to add new features aimed at meeting the needs of the online shoppers.
“We’ve added the local market — now you can buy assorted meats, vegetables, all of these can be bought online. As we add these things, the volumes keep growing and more people keep buying. All of that is leading us aggressively to profitability. What we are going to do next is to ensure that all markets in Lagos are on our platform such that when you are shopping, you are literally shopping from everywhere,” Afaedor said.
Even though he wouldn’t reveal how much the company has raised so far and the names of the local and foreign investors, he openly admitted that Supermart.ng is not yet making a profit.
“Supermart is not profitable now but we are moving very steadily on the path to profitability,” he shared. “We expect to achieve profitability within the next 18 months. You can’t build an ecommerce business of that scale and make it profitable in one year. It is almost impossible.”
However, he said the company is extremely capital efficient and is well capitalised to be able to deliver what they need to deliver.
Current state of ecommerce in Nigeria
Being one of the founding fathers of ecommerce in Nigeria, I asked him whether the current state of the industry is in line with what he envisioned at the outset of the ecommerce revolution he helped to jumpstart.
“It is moving in the right direction, it’s been growing exponentially. When you are getting started, you look at the market and you see it is so huge and you look at the island or mainland — you can see that there is commerce, people are buying. I think we started with about 20 orders a day being shipped, then it moved to 2 000 orders a day. In 2010, it grew to about 40 000 orders being shipped a day. It is growing super-rapidly and that’s not going to change — it is actually going to continue because we have real customers with real challenges,” he told Ventureburn.
But he warned that the focus of ecommerce companies in Nigeria should wander from satisfying the customers.
Afaedor argues that ecommerce companies need to make sure that customer’s experience is really good. On Supermart.ng, for instance, you can choose delivery window, location, date and time. He noted that if one keep understanding the customer’s problem and solving the customer problems, the industry is going to grow faster.
Cash on delivery
Cash on delivery still remains a very strongly debated topic in the ecommerce space in Nigeria as many startups are complaining they cannot compete favourably with companies that offer cash on delivery option to their customers. But Supermart.ng is one of the companies that are not offering cash on delivery option — a decision Afaedor said was due to an observation of the behaviours of some customers.
“We don’t offer cash on delivery because when you offer such, you would find out that a lot of customers are not showing up for the products, and that accounts significantly for the bad customer experience,” he said. “100% of our customers receive their products because they’ve paid for it and we are extremely focused on delivering exactly what we promised the customer. We don’t have the extra overhead of running around, chasing customers who are not showing up for their products.”
Presently, he revealed that a large proportion of customers choose local and international card payment and via bank transfer methods.
“And against the popular notion that Lagos customers are reluctant to use their cards to pay online, what we are seeing is that customers are coming to Supermart and are depositing money in their Supermart wallet. Some are even asking for when we will start taking their card information so that they won’t have to be transferring money into their wallet,” he said.
He added that the decision to shut down cash on delivery cannot be made centrally as it is really less about Nigeria.
“it’s about the businesses,” he said. “The businesses have to deliver a good quality service and if they can deliver a good quality service, they can shut cash on delivery down. I think a lot of businesses doing cash on delivery are doing it because they don’t believe they’ve won the customer over and are delivering the products exactly the time the customer wants. Because when customers order products and such are not delivered on time and as promised, they don’t really know whether their money has been tied up somewhere – and will not be willing to pay up front next time. But when they know you deliver on time, they will not have any doubts when asked to pay up front.
“It is really a service delivery thing – if the service delivery is improved, then cash on delivery could be shut down.”
Beer and networking for stakeholders
Even as advanced as the startup ecosystem in Nigeria appears to be, Afaedor observed that the stakeholders are not meeting enough.
“We the stakeholders need to interact more — I’m talking about the entrepreneurs, founders, financiers and others. It’s not even about having business conversations, let’s drink more beer together because as we hang out together, and as we drink beer and chapman together, what we are really doing is due diligence with which other — can I trust this person, can I give my money to this person?”
“We are not meeting often and we are not building real relationships enough. We should be able to move from people being parts of an ecosystem to becoming friends — friends investing in other friends’ businesses because they know the person and they know the content of the person’s character and they have an idea of the person’s motivations. Let’s hang out more often and don’t let’s talk about business — you can talk about Arsenal FC game. We will know more about each other that way. When you go to Silicon Valley, you’ll see that. Throw a stone and you will be able to see a startup lawyer and other stakeholders. The ecosystem is built on relationships.”
He revealed that Supermart is driving this with the Supermart Speakers’ Series where they will be bringing captains of industries to talk to people.
“We will also have to start a meet-up where there is going to be foods and drinks and everybody comes to pay for himself but you are sure that when you go there, chances are high that you will see somebody who is an entrepreneur or some form of stakeholder in the ecosystem. We need such a space to see each other and to talk more,” he said.
Even though his company is attempting to bring all markets in Lagos on its platform, Afaedor is originally from Ghana although he has a pan-African mindset about how things should be across the continent.
“I think it’s less about countries — we need to move quickly beyond that country mindset. I’ve been about to travel across Sub-Saharan Africa quite a bit,” he said. “We share the same challenges so a solution developed in Nigeria is more likely to catch on in Ghana than a solution developed in Silicon Valley because this is more a mirror of that. The question then becomes less about the artificial borders because really, these borders, the colonial borders, are really artificial. We are more like one people — we have tribes spurning from one country to another. We need to think less about that; instead, we need to think of solutions for sub-Saharan Africa. We need to think about how to be able to leverage abilities of the sub-continent.”
“We need to be thinking about where we can find the best people — if they are Nigerians so be it, if they are not Nigerians, let’s try and pool the best talents that we can pool together because what’s most important is to get talents behind the idea to be able to build it. If we can do more and more of that then I think we can go places.
“I’m a big advocate and you can see even Europeans coming to build startups. I think per capita there are more Europeans and Americans in our ecosystem than elsewhere,” he said.
“You have to choose the best place. Retail for example, I believe is better built in Lagos because you have a much bigger pool of potential customers,” he explained. “Though it means it costs a lot to get them because of noise, but it also means it would probably move much faster in Lagos than it probably will in Accra. Maybe some other things will be easier in Accra. I don’t know what, but whatever it is, choose the best place and go do it there.”