Profile of an acquisition: Zinox Technologies takes over Konga

ZINOX TECHNOGIES’ TAKE OVER OF KONGA CAN BOOST NIGERIA’S PLACE ON THE WORLD MAP OF E-COMMERCE MAJORS. BUT IT’S THE POTENTIAL IMPACT THAT IS MIND-BOGGLING.
Leo Stan Ekeh and Zinox

Although the acquisition cost was not disclosed, KONGA is said to be worth #13.7billion ($38million) no peanuts by Nigerian standards. It started operations in 2012, as a Nigerian company, but was taken over by two foreign partners- NASPERS of South Africa and A.B KINNEVIK of Sweden, who between them injected nearly #25billion Naira ($68million) into the business as seed money. Even by American standards, that is comfortable start-up funding. As of today, KONGA has nearly 200,000 active users, 80% of which are mobile-based.
Acquisition of the parent company also gives ZINOX ownership of KONGAPAY, a CBN licensed money platform with over 100,000 subscribers, which the industry rates as the best money channel in the country and KOS-Express. The later is a digitally-driven, world-class logistic company with advanced delivery capabilities, which can be used, not just by KONGA but by other corporate bodies and small and medium-scale enterprises.
What of the potential? That is enormous: In the e-commerce world, it is not impossible to move from a user base of 200,000 to 1million in a matter of months. It depends on strategy, service orientation, imagination and consistency.
The Zinox group, one of Nigeria’s noted ICT Solutions Conglomerate and Original Digital Equipment Manufacturer (OEM), is gearing itself up for battle. Already it is recalling laid-off Konga employers and planning to recruit 750 other Nigerians into the workplace. In the long run, ZINOX envisages creating employment opportunities for 5000 people.
What is the size of E-commerce sales worldwide? There are no exact figures, but some estimates put it as high as $3trillion and growing. In West Africa, E-commerce potential may be as high as $2billion or more.
How much of KONGA should ZINOX retain? The best thing is to study and learn from KONGA’s mistakes. For instance, KONGA recently shifted from a pay-on-delivery system to a pre-pay only model. No need to change that.
Obviously, ZINOX should hit the ground running, but with a properly thought-out and articulated strategy. If it succeeds, it would not have become the Alibaba of Africa. Not long ago, when Alibaba of China had an IPO (Initial Public Offering) on the New York Stock Exchange, its shares fetched a record $21.8billion.
No- if it succeeds, it would have created the Leo Stan Ekeh (Founder of ZINOX) of Africa- a unique, innovative, world-class, internet commerce entrepreneur.