Konga, Yudala in Merger Talks

Yudala
Konga, the e-commerce giant recently acquired by Zinox Group, may merge with Yudala this month, sources close to the two companies said.

The merger was part of the ongoing restructuring of the company aimed at building a strong brand and attaining market leadership in the e-commerce industry.

However, industry watchers observed that the merger between Konga and Yudala was a potential game-changer for e-commerce in the country.

According to them, combined strengths of Konga and Yudala will improve consumer experience by lending more convenience to the shopping process and expand access to a wider range of products, services and solutions for Nigerians.

Konga, founded in 2012 by Sim Shagaya, dominated the news recently following its acquisition by the Zinox Group, after months of intense negotiation with major investors, Naspers and AB Kinnevik.

As part of the restructuring in the company, a new management was announced recently with the appointment of Olusiji Ijogun, a seasoned and experienced technocrat as chairman and the former Vice President of Nokia, Nick Imudia, as the chief executive officer.

Yudala, which was launched about two years ago, offers a retail roll-out strategy and a network of physical stores, which has helped the company reach many unserved and underserved Nigerians.

Commenting on a possible merger between Konga and Yudala, the Lead Partner, Infusion Lawyers, Senator Ihenyen, said he was not surprised at the move, saying the merger would have many benefits for both brands.

According to him, Yudala will benefit from Konga’s massive online subscribers to market its products while Konga will leverage Yudala’s physical stores to deliver a unique shopping experience to Nigerians.

He said, “Over the years, Konga has successfully created a strong brand for itself in the e-commerce space in Nigeria. With this strong brand, Konga is in a great position to leverage Yudala’s fairly distributed physical stores in Nigeria. On Yudala’s part, by merging with Konga, it’s an opportunity to also leverage Konga’s 100-thousand-strong online subscribers, giving Konga subscribers the ‘real’ shopping experience. So, I think the merger will be a win-win for both Konga and Yudala. Of course, I expect Konga to absorb the Yudala brand.”

Ihenyen posited that the impact of the merger on the Nigeria’s e-commerce ecosystem would be a significant one, as e-commerce companies such as Amazon and Alibaba had started opening up brick-and-mortar stores for their customers, a trend, which had not been embraced in the country.

He said, “Brick-and-mortar stores are relatively costly to set up, especially in a market like Nigeria where there is no even distribution of urban life. But by establishing brick-and-mortar stores, e-commerce companies can add more value by giving their thousands of subscribers the shopping experience that is beyond just receiving stuff at their doorsteps.”

“Millennials now want to have more than just a click. They want to drop by, taking the fun offline. In the next few years, e-commerce stores and offline stores will be the same. Online stores will increasingly become a window-shopping experience, while offline stores will be the experience centres. This is the future.”