Meet Sim Shagaya, the man who is redefining the outlook of e-commerce

Welcome to the future
Konga boasts a storied legacy of cyber merchandizing and entrepreneurial dynamism. In this interview with Rita Ohai, the Chief Executive Officer, Sim Shagaya, reveals how in just three years, he has built a successful establishment on the backbone of corporate wisdom and intellectual foresight…

There are strong indications that business in the e-commerce sector is set to experience a boom in the near future especially if the number of internet users continues to grow at its current rate and Shagaya is a man who is positioned himself to take advantage of this windfall. On

Twitter, he pegs himself a technophile, afrophile, futurist, libertarian and warrior. One too many adjectives but if they fit the bill, then it works just fine.

Although he’s largely hailed for his efforts with electronic merchandising very few know of Sim’s involvement with the rapidly successful outdoor advertising company, E-Motions. A company he started nine years ago with what he calls a ‘little sum of money’.

In no time, that business grew into a competitive brand with billboards and sign posts manning almost every major road in the upscale section of Lagos. Six years later, he felt the itch to move on to tougher challenges. In his words, “I would have done both E-motion and Konga injustice if I had served as the CEO of both companies.”

Does he think it was a wise decision to leave so early in the business? Absolutely! Whether Konga is making him more money at the moment is an entirely different matter. One of his major investor’s Koos Bekker, who was until recently the head honcho at Nasper, a South African based entity, tagged the Nigerian e-commerce sector as one riddled with low performance and poor patronage based on his experience with Kalahari.com, a Konga look-alike that went sour.

However, Sim is undeterred. As far as he is concerned “They were just a little bit too early and operationally, Kalahari just wasn’t set up to serve Nigeria.” The key enabling factor for him lies in the ability to set up an effective cash on delivery system which Kalahari couldn’t do because in South Africa they relied heavily on people paying online, therefore the volume in terms of transactions were pitiful.

Shagaya cuts across as a risk taker – the kind that loves the smell of competition and yet manages to function as a selectively secretive man.

The type who is willing to show you graphical representations of his company’s growth and even take you on a tour of his engineering facility but who jealously guards the amount of shares split between him and his investors especially after it was erroneously reported that he sold 50% of his company to Nasper.

At the moment, there are more than 76 online retailers offering the same service as Konga but this man from Northern Nigeria appears unfazed when he states, “You have to take my word for it. I would be worried if we didn’t see growth every month and I think it’s fantastic that we’re seeing so much activity in e-commerce and consumer internet in general. I think that’s amazing. We welcome and encourage it.”

In his mind, his company is the Alaba, Lagos Island and Computer Village of the 21st century. The only difference is that the initial interface for transactions at Konga are virtual.

The man was able to clinch awards like the CNBC Entrepreneur of the Year by refusing to allow nerve-racking flaws in logistics deter him. So when partners like DHL, FedEx and other courier service companies chose not to deliver merchandize to some parts of the country on the basis of their remoteness, he went out and got a courier license from the Ministry of Communications and made the deliveries himself. Radical, but it’s the huge potential this sector portends that propels him to make adventurous moves without necessarily putting the financial reward into consideration – a trait he thinks is lacking in the average Nigerian entrepreneur. Shagaya believes too many businessmen in his homeland “operate with this harvest-time mentality. A plant it ‘now and reap next year’ system,” which is just down-right wrong.

In light of the astronomical growth they have experienced over the last few months, Sim still thinks Konga is a ‘baby’. In his opinion, if Alibaba.com, a fifteen year old e-commerce establishment based in China is set to IPO with the initial sum of $115 billion, then he hasn’t even started making the right kind of money yet.

With the e-trading sector, Shagaya says his biggest headache has been finding ‘skilled people’ to get the job done efficiently and on time. According to him, “We have really done a shoddy job as a country. We are entering this knowledge-based economy where information technology, nanotechnology and other higher level fields are starting to dominate yet it’s very difficult to find good people,” he stressed.

Getting great bargains on products are a thrill for consumers which is why first world nations like China and the United States hold regular big market days where shoppers crowd outside major stores in long queues waiting to grab their share of merchandize sold at massively discounted prices. It has become such a huge phenomenon that Alibaba.com, the world’s leading e-commerce website, racked up sales of up to $5.75 billion in one day alone from Black Friday sales. Thus when the management at Konga decided to pioneer a Nigerian version tagged ‘Yakata’, it felt like the natural thing to do.

The hype was massive on social media, excited shoppers got their purses ready but on that day things went awry. Complaints of website host servers crashing and limited access to goods advertised set Twitter on fire. A lot of people were not happy with the mishap but few came away satisfied. Shagaya tells his side of the story;

“It taught us a lot and showed us that we had vastly underestimated the demand in this country. It’s not an excuse but similar things have happened to many online retailers.

“On that day, we got sixteen times the number of traffic on our website. We used to run on one server and in preparing for that day, we went out to get four servers. However, by 8am we had filled up the capacity on them. We didn’t expect that literally the entire country, it seemed, was trying to log on to our website and this is something that has happened to Facebook and many other sites – it’s actually sort of a rite of passage.

“I remember that day, I called some of my board members and told them what was happening. They actually laughed and said ‘welcome to the big league’.”

He made N60 million from that singular project (the total amount in sales realized in 2012). The next Black Friday, a.k.a Yakata sales will hold in November. They are looking to transform it into an annual ritual of sorts.

At an interview given last year, he emphatically projected that he expected to see the income level of the average Nigerian rise in the next four years in spite of crippling political insecurity, poverty and unemployment but for this to happen, people are going to have to start spending less than they earn and saving capital to invest in viable businesses.

From where he’s standing, his country’s problem is not a dearth of opportunities instead “young people need to put more focus more on investments and less on consumption, especially conspicuous kind (the type of consumption consumed so that everyone else can see that you are consuming)”.

Like most of his counterparts who would rather operate under the wing of anonymity, the businessman who is wont to belt a gregarious laugh at the slightest tickle is gradually learning to put the media and its hyper-ventilations at an arm’s length. It’s not a sign that he has plataeued creatively rather it’s a means to dedicating his attention to building his life’s work.

Sim is an ardent lover of poetry, the fact that he writes it too makes it even more special. When asked if he would be willing to run a short piece by Business Day for publishing, the man flat-out blushed! Effusively, he goes: “Nooo! It’ll be way too romantic! You’d have to pay me but I’ll think about it.” And then he continued laughing…whoever thought there was a mushy side to the art of making money?