MASHA: Poor National Identification System Hampers E-Commerce In Nigeria

Three years ago, OLX, one of the fast growing online shopping platform in Africa, launched its operations in Nigeria. Today, the classified space has become a marketplace for almost everything you need, including used items. In this interview with CHUKS NWANNE, the country manager OLX, Lola Masha, spoke on the country’s e-commerce space, the challenges and innovation put in place by the company to ease the process.

How would you rate e-commerce space in Nigeria?
IT’S actually very impressive the way the e-commerce space has taken off in Nigeria, and I think it’s similar to other trends that we’ve seen in other industries. It speaks to the entrepreneurial spirit that we have in Nigeria. For instance, if you think back to when smartphones came to Nigeria, you hear people say, ‘blackberry for life, I’m not going to change.’ But we started changing; most people now have touch screen smartphones and the rate of growth for that space is incredible. Similarly, when debit card/ATM cards came, people were like, ‘no, this is not going to work.’ But again, once you overcome those initial barriers, people will embrace it; everyone now has a debit card. The same thing with POS machines; I remember about two years ago, you could barely find a place that had POS machines. But today, even traders in Balogun Market have POS machines. What it speaks to is that, as long as the service is valuable for Nigerians and that we remove the barriers, Nigerians would jump onboard. We adopt technology very quickly as far as it’s valuable, makes life easier, safe, secure, convenient and easy to use.

What’s OLX all about?
OLX is an online classified space where we enable buyers and sellers to transact in a convenient, fast and safe way. We are the number one classified platforms in Nigeria. People think we are a local company and that’s because we do care about the local market. But OLX is a global brand; we are in Brazil, Argentina, Columbia and so on. We are in Europe and we also conduct business in Asia; we are really quite an extensive business. In Africa, we have offices in three countries: South Africa, Kenya and Nigeria.

But when OLX came to Nigeria, many people actually described it as a South African brand?
Actually, it’s a very fair observation and it’s for two reasons. One was because, when we came into the market, to allow us quickly launch, we actually used a lot of South African commercials, so, people see that and associated that with OLX. Secondly, our parent company is a South African brand, so, people may also make a connection to that. I think that’s the reason you have that perception, but our head office is in Amsterdam; we are a European brand.

This is your third year in Nigeria, how has it been doing business here?
Business has been great; when we began, we were the underdogs; we were the small guys. We just focused on the right things, making sure that we have the best experience and we grew very quickly from that. We are not perfect by any means; we’ve had our ups and downs. But I think we always focused on doing the right things and constantly pushing hard to grow the business here. Few months ago, we had just about six people working here, but today we’ve grown quite big. It really speaks to the rate at which online platform is also growing and we have ambition to grow much larger.
We have other e-commerce platforms in Nigeria, such as Jumia and KONGA, what‘s the difference between these platforms and OLX?

Those platforms you just mentioned are part of the online e-commerce space. However, within e-commerce, there are at least three different models: You have the classic e-tail model, which is the translation of retail to electronic. For a retail business, you have a shop, you have inventory, which means you actually buy goods from the suppliers. The buyer comes to your shop, they pay you directly then you give them the good; you are at the center of the transaction. That’s what people like KONGA and Jumia do. The other model that also exists is the market pace model. It’s like someone that owns a shop, but each business comes to set up within the shop; they essentially rent space from you. So, there are brands that also do business using that model, where they don’t own the inventory, but they collate contents from other small businesses.

The model that we run is the classified model, which is different in many ways. First being that our users are typically not business, they are individuals. If you want to sell your car or your nice wristwatch, how do you do that right now? You either tell your friends or your family; there’s very few options online to sell those items from an individual point of view outside the classified platform. So, OLX is the number one classified platform; we enable individuals to trade with others.

Secondly, we don’t hold the inventory; we just provide the platform for you to trade successfully. Thirdly, you can sell both new and used good; you can’t find used goods on KONGA and Jumia. We believe that we add more value to the economy by giving items the second life that they otherwise would not have. The fourth is that the transaction happens outside our platform; you are not paying OLX, you are paying the seller direct. You are meeting the seller outside OLX to inspect the product and make sure it meets your standard before you conclude the transaction.

What’s the process involved in putting up an advert on your site and who is qualified to do so?

The process is very simple; for every new seller that is interested in posting an add or an item on OLX, they come to our site and register. They take picture of that item and post it through; we review every single add that comes to our site. That add goes live if it meets our specification; the contact information is displayed publicly. Buyer comes to our site and they can browse for these items and call the seller directly. So, that’s the dynamic in terms of how the transaction actually occurs.
Sometime ago, there was an issue of a nanny recruited on OLX platform, who kidnapped children under her custody, how secure is this platform?

We do realise that it’s actually important that we have a safe site that our user can trust and come back to. Our future in Nigeria depend in us maintaining a safe platform that users will feel comfortable transacting on. So, safety is our number one priority here and we take extra steps to ensure that we verify those adds. Every single add that is posted on OLX is actually reviewed by somebody on our team 24 hours a day. If you post it at 2am, somebody is going through to check that it doesn’t violate our rules and regulations. We’ve also realised that we are not perfect and we can’t always catch every single error. We do make some errors, but we rely on our users to also report those bad items to us. On our site, there’s a section where you can click a report item. When you do that, someone on the team will investigate and would ensure that we take subsequent action. And not only do we delete the add, if we find it not meeting our criteria, we actually ban the user to make sure that they are no longer able to transact on OLX ever again.

Apart from blocking offenders from you platform, are there other actions taken against such people; do you work with law enforcement agencies?

We have an investigative firm where we work closely with the police and EFCC and we go after scammers; we go after them to the full extent of the law and we bring them to justice.

As a global brand, are there security challenges peculiar to Nigeria?
The one that is unique to us is the fact that there’s no national identification system in Nigeria; so, it’s tough for me to know who really you are. If we had an ID system of some sort, where I knew who you were and I had a sense of your reputation through various ways, we will be able to make better decision on who we should allow or not allow on OLX platform. Unfortunately, we don’t have that in Nigeria. So, what that means is that we had to take up that task of building that database of verified users. It’s not trivia at all, because everybody now needs to be verified; we need to capture who you are and decide if we should allow you to continue using the site or not.

So, Nigeria is a unique market when it comes to e-commerce?
Nigeria is a very unique market and when we began our business, we said, ‘you know what, Nigeria has a perception or reputation for fraud; we have the 419 brand attached to us. But let’s not start business accepting that perception, let’s give Nigeria benefit of the doubt; lets use models that worked in almost every other country. We began business that way, but we realised very quickly that Nigeria is a very unique market. Unfortunately, reputation does have some reasons behind it. So, we’ve had to adapt our processes uniquely for the Nigeria market; things we’ve not had to do elsewhere, we are doing in Nigeria.

How active is the OLX platform in terms of transaction?
We have over 150,000 adds now that are currently live on the OLX platform. These adds do expire, so these are the current items constantly coming through. It’s quite busy and there’s high chance of selling your items through OLX than any other channel. We’ve received the data and we know for a fact that the chance of you selling that car in OLX is much higher than through any other platform.