Nigerian platform QShop, which recently landed investment from the Google Black Founders Fund, offers businesses a quick and easy way to build e-commerce websites. They can have an e-commerce store up and running within minutes. QShop’s solution is specifically tailored for the Nigerian, and African, market. How we made it in Africa asked founder Tarebi Alebiosu about the company’s business model and e-commerce trends in Nigeria.

In recent years, it has become increasingly simple for business owners to open online shops. E-commerce website builders such as Shopify, Square and Ecwid provide pre-packaged options for companies of all sizes that want to take their shopping experience beyond brick-and-mortar.

When the Covid-19 pandemic forced even more businesses online, demand for e-commerce-as-a-service solutions spiked. Around this time, a new player emerged in Nigeria, created as a response to the evident demand when lockdowns restricted physical movement.

Tarebi Alebiosu, the founder of QShop, recalls when the decision was made to build a solution to suit the unique e-commerce needs of Nigerian, and African, business owners. “I was the managing director for a successful software development company, Yoke Solutions, and was in the process of looking for funders for an events tech company we had started a few years prior, called Sugar.ng. However, when the pandemic hit, it was clear the uncertainty around events and what faced us in the future would halt those plans.”

Yoke started receiving calls for assistance from small and medium enterprises that urgently needed to take their sales online. As it was not their core business, Alebiosu and her team would simply suggest existing options such as Ecwid and Shopify. They believed the queries would lessen over time as organisations found an online home with one of these providers. However, they just kept coming.

“The overwhelming feedback we received was that the available options were expensive and complex. At the end of June 2020, we started working on our minimum viable product and by end of August, we released it to the market,” she says. Within the first month, 87 businesses had signed up.

Subscription vs free model

For the rest of 2020, the company continued tweaking, adjusting and refining its model. At the time, only a paid subscription model was available for companies wanting to run an e-commerce site. What they soon discovered is several businesses would subscribe for a month or two and then cancel.

“Some companies were paying and would not make any sales. That’s when we realised we needed a free tier offering as well,” notes Alebiosu. In December 2020, QShop started working on the free model and launched it the following month. By the end of February, it had 2,000 clients and today, the tally is 15,000.

Subscribed businesses pay 5,000 naira per month (US$11); 13,000 naira ($29) per quarter or 50,000 naira ($113) per year. An additional fee is charged for every transaction by the payment partner, such as 1.4% with Flutterwave and 1.5% with Paystack.

With the free model, QShop takes 4% of every transaction but there is no monthly fee. Just 5% of its clients currently use the paid subscription option; the rest are on the free tier. “We make money only if our clients are selling,” says Alebiosu.

QShop differentiators

Why would a client choose QShop over a global solution like Shopify? Alebiosu puts forth various reasons.

“We are significantly cheaper than other options. Secondly – and quite significantly in our current economic situation – our paid model is priced in naira, not dollars. Right now, nobody wants to incur costs linked to the dollar as our currency is experiencing serious devaluation,” she says.

According to Alebiosu, another differentiator is the support QShop provides to customers who need some handholding in the e-commerce journey.

As the product was built from scratch and with the local customer in mind, they considered unique characteristics ignored by global e-commerce website builders. “Many local businesses use mobile phones, so the service had to be mobile-driven,” she explains. In addition, customers in Nigeria wanted integration with local payment solutions.

“We also knew Nigerians would prefer WhatsApp communication rather than email and building this from the get-go meant we could provide this flexibility.”

With a QShop site, customers can upload their products directly from Instagram and activate their Facebook pixel for advertising purposes. The paid model presents inventory management, sales reports, customer lists and shipping set-up, among other features. Additionally, QShop currently offers same day settlements to customers

The company is currently running a pilot, helping some customers with their marketing. In time, these value-added services could provide additional revenue streams.

E-commerce trends and growth prospects

Alebiosu credits companies like Jumia and Konga for making great strides in Nigeria to establish e-commerce marketplaces as an option for consumers. However, many businesses still prefer to have their own online stores.

The evolution of online payments in recent years has also contributed to growth in the sector. Where initially it was difficult to make payments, the country now has various options, including bank card, USSD, and electronic fund transfers.

Some challenges remain, like the persistent lack of trust in online transactions from both sellers and buyers. Operating in countries with a lot of unmapped addresses is also problematic for QShop as it would like to integrate automated delivery options with an external logistics partner onto the platform.

The company was recently selected as a recipient of the Google Black Founders Fund. Apart from the funding and access to this Google Cloud credit of $200,000, Alebiosu believes the main benefit is the network of mentors the programme has made available to the company. “This is my personal highlight from being selected. We have access to mentors in various areas: managing a team, customer acquisition, leadership, fundraising, you name it. And we are able to slot into regular workshops that help us drive the business forward.”

QShop already has a few customers in Ghana and is looking to expand there, and has its sights set on the other two large e-commerce markets on the continent: Kenya and South Africa.