South African-based comparison website Click n Compare has expanded into Kenya and Nigeria, under the brand CompareGuru. The start-up provides an online portal where consumers can compare products in the market that have traditionally been difficult to compare side-by-side on both price and specifics, such as insurance, mobile phones, broadband, banking and travel.
The company was co-founded in 2013 by Ryan Marx. It was financed by Silvertree Capital, which is headed by ex-Rocket Internet employees and founders of e-commerce site Zando, Peter Allerstorfer and Manuel Koser.
Prior to starting Click n Compare, Marx also worked at Zando, but was inspired to try his hand at entrepreneurship when he noticed a need in South Africa for an independent aggregator of difficult-to-navigate verticals. For example, the platform allows consumers to easily see how buying a particular Samsung phone on contract with MTN, differs to competitors Vodacom and Cell C. The company earns commission from sales generated from the platform, but does not push one product or brand over another.
While Click n Compare has seen month-on-month growth of around 40% this year in South Africa, Marx believes that Nigeria and Kenya hold even more potential for the service due to both markets being less saturated.
“There’s a lot less competition there,” he noted.
Nigeria’s ‘Wild West’ insurance industry an attraction
Nigeria’s insurance market is of particular interest to the company. Unlike South Africa, car insurance is mandatory in the continent’s largest economy, although not always enforced.
“But now with the new government coming in, they are going to be spending a lot of time focusing on enforcing this,” said Marx. “This means that in the next six to 12 months you are going to have this mad rush of people just going online and looking for insurance companies.”
The Nigerian insurance market is also under-regulated and contains a number of fraudulent companies, said Marx, adding CompareGuru is hoping to fill the space with a portal that Nigerians can trust. “It is kind of like the Wild West there.”
The company has recently acquired Insured.ng, a leading online insurance comparison service that has already established traction in the market.
Strategy: content generation to drive traffic
Despite growing internet penetration, Marx noted many Nigerians still don’t like purchasing online. As a result, the company is investing heavily in educating the market by publishing traffic-generating content that is aligned with their service.
“For instance we would give a list of the top 10 reputable insurance companies in Nigeria – people find value in that. We are also going to be launching a review platform, where you can come and tell us your experience with an insurance company so to advise other people visiting our site,” he continued.
A similar strategy is being adopted in Kenya, and Marx explained that CompareGuru is focusing first on producing content and articles to build its reputation and generate traffic to the platform, before generating revenue. For example, its launch into the markets was accompanied by hiring content writers for the platforms.
“The internet is so competitive these days that it doesn’t make sense to simply push products anymore… Back in the day it would have worked, but now people just go online for interesting content. People spend more time on 9GAG then they spend on any other product site.”
While the tactic is also used in South Africa, Marx explained that it is far more pronounced in Kenya and Nigeria.
“In South Africa we looked more at our relationship with providers when we first started off in this space, as opposed to simply how to acquire traffic… But I think in Nigeria and Kenya it is much harder to get traffic and you need to be a lot more creative on how you acquire it. So our model is completely opposite [in these markets]. It is more about educating, acquiring, and maybe a year from now when we have 50,000 people on our site… we can look at how do we monetise that traffic.”
Pan-African expansion next
Marx highlighted Ghana and Tunisia as countries to expand to next. “We will then probably move over into the UAE once we have a sufficient footprint in Africa. Our idea is to build a pan-African marketplace for everyone to come and find products.”
He noted that he is not concerned that many African economies are feeling the strain of falling commodity prices. “Somebody asked me the other day how the decline of Brent crude in Nigeria is going to affect our company. It was strange because we’re a company that is based on saving people money. So it is unfortunately to say, but when the economy starts to take a dip, people tend to look at how they can save money on everything – whether it be their groceries bill, their electricity bill, insurance, anything like that,” he explained.
“So if anything, it strengthens the brand.”