• Monday, March 04, 2024
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The big leap…giving up a dream to rebuild another

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Online retailing is an enterprise you are familiar with. As with any new project, there are hurdles to surmount. What are some of the challenges you have had to face with e-commerce?

Just like any other business, it can be viable but it just depends on how you are able to run your company.

Some companies may invest heavily in marketing at the initial phase or may charge lower than normal prices to attract customers. But the question is whether that for the period that you are having a loss,  you see an uptake in the long run with people buying while you are charging more competitive and reasonable pricing leading to profitability.

Also in terms of the people you hire, the kind of salaries you pay or the way you run your business- whether you have a warehouse or how close you are to the suppliers and all of these various things will impact on how well your business does.

I think more importantly [the main problem we have] is getting customers to change their behavior. People are typically used to going to physical stores to get their groceries and they go to a wide variety of places to source their shopping as against doing it all in just one place.

What we are trying to do is to bring all those shopping outlet [kind of what we did with Jumia] but getting customers to change their behavior takes time so it is for us to keep reminding them about the convenience of the kind of service we are offering.

With the younger crop of business men, we have found that there is a higher tendency to engage in partnerships among entrepreneurs in contrast to the older generation. Why do you think there is a shift in the attitude towards joint-ventures among Nigerian establishments?

With one-man companies, that person can only be at the helm because there are strong people occupying other positions. So what may look like a one-man company is just that that person happens to be the face of the business.

For cases where there are partnerships like in my case, it’s a format that works for some tyoes of businesses and for others it might not thrive.

However beyond the title, I think it is about how you separate responsibilities so that each person can bring something to the table particularly in the areas that you are strong in.

It’s also a situation where people who are more exposed and well-traveled have seen different business models and choosing to cut down the strain wanting to do everything yourself either physically or financially will put on you than doing it with somebody else. You have to decide if you want to have ‘all of ten’ or ‘half of a hundred’.

What principles have helped formed the fabric of your entrepreneurial ambition?

I think for me, it has always been a case of building foundations so the test of whether or not I have been successful will be told years from now.

The first thing that will attract me to any business venture is to find something that interests me. I wouldn’t do anything just because I think there is money there.

Also you have to try to see that there is a need for somebody else in line with your interests if not its just a pipe dream. Being able to fulfilling that need in an exciting way that keeps you engage in pushing the business forward is very important.

Once you have been able to find a partner that you can trust, everything else will fall into place. As long as you trust that person, it then becomes a question of whether that person is competent enough.

A lot of people complain about access to capital as the major difficulty they face with starting or running their business, what are some of the innovative ways people can generate income to run their companies?

First of all as a serious person, you have to put your own money in the business. So that means over time, you would have some kind of savings either from your salary or from your bonuses and also you should have invested that money so that it is working for you.

If you are starting from ground-zero, you have to work [for somebody else] to make money unless you have family and friends that are willing to invest in that business.

So I think for any business you have to try to get money from these sources before you then go out to a bank to get any money. The truth is that you might not even need huge capital to invest in that business and in the mean time, you have to make sacrifices. You need to reason out whether a brand new car should even be on your priority list, is a flat in Lekki a priority. In making those choices, you can go on a holiday every other month and think that there will still be money left to invest in the business.

Once people see you making those sacrifices, they will be attracted to listening to you because they see that you are frugal and wise with your own money.

What is your position about government’s less than active involvement in the growth of the SME market? 

If you talk about lending to small businesses, banks have no incentive to do that or at least they say they don’t. Their money is more guaranteed if they are going to give it to someone who is going to build duplexes in Ajah that people in most other businesses.

Banks will go against what is tried and test and the online business is still relatively new with a history of just about two to five years. This is their own way of minimizing their risk.

If they insist that they are not lending because people are defaulting, it goes back to the quality of credit-checks they do.

Seeing as you have set up your next e-commerce venture after the success of Jumia, what is your five-year strategy for the business?

My focus has always been on service. If you deliver an excellence service, customers will always come back. Currently we are the only store in the country that delivers 7 days a week with three delivery windows every day so you can schedule your deliveries to suit your convenience.

The model on which we are running our business gives us the assurance that sooner than later, it will be a profitable enterprise and we are sure we have taken the right part so that number one, we are not doing cash on delivery.

So far 80 per cent of our customers come back.

Rita Ohai