Global online classifieds platform OLX has been launched in Nigeria and Kenya. OLX, which is available in over 90 countries, is owned by MIH Internet, a subsidiary of South African media company Naspers. The current Dealfish online classifieds platforms in Nigeria and Kenya, also owned by Naspers, will be rebranded as OLX. Kate Douglas caught a moment with Neil Schwartzman, the CEO of MIH Internet for sub-Saharan Africa, to find out more about the launch of OLX in these markets.
There is currently very little activity on OLX Nigeria while the Nigerian Dealfish website seems to be thriving. Is this transition from Dealfish to OLX taking longer than expected?
I think there are a number of things that need to be done in the background before a transition can be fully completed. There are a lot of things technically as well as consumer facing. We want to make sure that the transition process goes as smoothly as possible. They haven’t done any advertising around the OLX site. I think it was put up there just to put up and get it ready in, let’s call it a holding space until the transition is completed with listings from Dealfish to OLX.
For how long has Dealfish been operating in Nigeria and Kenya?
When do you expect OLX to be fully established in Nigeria and Kenya?
It’s not going to take long for OLX to become established. They are going to do sufficient marketing campaigns to let customers know and let the public know about the transition. I expect it to be just a matter of months, really, until people know.
What sets OLX apart from other online classifieds sites?
First of all, looking at OLX, they are a global classifieds company. They are in over 90 countries, in over 40 different languages. They’ve got an enormous development team looking after their platform. The strength of their brand globally gives them a significant competitive advantage and it is just a very slick, easy to use platform. You know, Dealfish was great for what we wanted to achieve but it was a strategic decision to move to a global brand as a single classifieds platform for the group.
So your reasoning for this transition is technology and branding?
It is technology, it is branding, it is marketing.
Why Kenya and Nigeria? What makes these countries attractive to OLX?
Kenya is the East African hub and Nigeria the West African. Both have thriving internet communities, good levels of penetration, and employees for good future growth. Nigeria I think is most likely going to be the more lucrative market with, you know, 150 million people and I suppose about 65 million people online already.
Describe the competition in the Nigerian and Kenyan markets
I think the biggest competitor is TradeStable, which is a Schibsted company. Schibsted is also a very strong media company out of Norway that is doing exceptionally well with classifieds. So I would say they are probably the ones to watch in Nigeria.
In Kenya there isn’t a lot of competition. A Swiss media group, Ringier, bought Pigiame which they have been operating. That would probably be the closest competitor. The interesting thing though is that competition is not necessarily from a general classifieds platform. We are seeing more competition from vertical websites, like privateproperty.com.ng which is property in Nigeria, or Cheki which is an automotive site in both Kenya and Nigeria. So we see lateral attacks by pure play vertical sites as opposed to strong general classified competitors.
Any other African countries being considered?
Not at the moment. We really are going to first focus and establish our footprint within Kenya and Nigeria and then we will expand out within the regions.
Last year your online retailer Kalahari pulled out of Nigeria and Kenya. What were the reasons for this?
I think it was a matter of timing and what I mean by timing is the market conditions on the ground, the level of education, and there were payment issues. In Kenya you see M-Pesa but in Nigeria there are a lot of challenges with regards to payments, logistics, delivery, actually getting things to the customer’s door. So there were a number of – I think – critical factors which led us to the decision to wind it down. That being said we are still very much focused on e-commerce in Kenya and Nigeria in regards to our future plans.