Who will own the classifieds space in East Africa

November 24, 2011 — 22 Comments

The recent closure of Kalahari locally and in other African markets put into sharp focus the current state of m and e commerce in Kenya. A number of conversations I had in the past week pointed to the need for  a service that “breaks the ice” for consumers to appreciate buying and selling of goods online and on mobile. The service of choice was seen as classifieds.

A simple search for classifieds online will bring a whole list of providers, with all, more often than not calling themselves the number one destination. Cutting to the chase, let us look at those I consider major players and what they may or may not be doing right.

Dealfish is one of more popular classified services that sees on average 300,000 unique visitors a month {from publicly shared statistics}. They are available on web, mobile web and mobile application on the Android platform. As part of the well heeled Naspers stable, they clearly have money to burn to attain market dominant position. They currently do not charge for placements or access.  Earlier there had been allegations of content scraping from other sites and outdated inventory that was said to blow up the inventory base. The local head of Dealfish was brought to task on this at a local technology meetup to which he responded that content scraping was not their practice.Word is they plan to venture out and create distinct experiences along the different verticals and to rollout in the larger East Africa. They are also currently on the hunt for a regional head. I am keen to see what they do different with their strategy which gets implemented this December.

PigiaMe has a similar model, no charge for posting or viewing and they have been growing their inventory steadily. The service does however have an option to “Promote your listing ” for 90 days at Ksh.350 or to “Extend your ad” for 90 days at Ksh. 500. The service is backed by the team at Rupu, Kenya’s premier group buying service.

 N-soko a Nation property currently offers listings for jobs, properties, tenders and jobs. They also have a classifieds booking via SMS for their print edition with payments handled through mobile money. Of note is that they have different packages that range from Ksh 125 to Ksh 435. Their launch had been wanting, with a flash based interface but they quickly adapted and presented a more usable site.

The team at Cheki.co.ke I think have done a stellar job at addressing motor vehicle category. With a current offer for free placement, I have seen their team at car lots taking pictures and vehicle particulars for bulk sellers. They boast the largest listings in their category and their presentation of vehicles shows some thought having been put into the whole online and mobile car “window shopping ” experience. Cheki also have a regional presence with sites for Kenya, Uganda, Tanzania and Nigeria.

Google jumped into the fray with Google Trader which is currently in beta. Google’s strategy is to offer services  for free, then using the economics of complements to mine user data and better serve advertising.

Safaricom dabbled in this as well but seem to have relegated the service to the back burner. The service looked to be quite popular when it launched, and am curious as to why it was “let go”. The cost per listing was Ksh. 100 which was deducted from your airtime.

With a regional outlook, the entity best positioned to own the space will need two key value propositions within its stable. The first is that they own media  or at least have cheap access to it across the region – television, radio, print and online. This greatly reduces the costs of visibility,  which is essential for trust in a service to be built. Second and most important is that they have a ready network of agents across different towns to build inventory and do collections which will allow for easy creation of a web and mobile package that will instantly include those for whom these technologies do not make sense as well as provide the element location which can be a game changer. Imagine having hyper local classifieds so that Mzee Muturi in Nyeri can dispose of his old tv now that he has been gifted another by his sone, or a fresh polytechnic graduate in Busia making his services in mobile repair known. Both these contexts address a niche that no one covers at the moment. I remember the “Drop a Lab” project that I was once engaged in ’05 where shipping containers were to be used as community internet access points with two screens outside that would be used to stream local listings. Users would walk into the center, consume a myriad of services – internet access, printing, e-learning, eat something and while at it why not look at the local listings or listen to the chiefs weekly brief. There’s is the “Blackboard Blogger of Monrovia” who Eric Hersman {@whiteafrican} wrote about in 2009; while not exactly doing classifieds, he shows the power of localization in content serving.

Advertising works here too. It’s $5 to be on the bottom level, $10 to be on the sideboard and $25 on the main section. He doesn’t get a lot of advertising, and but he manages to scrape by.

His plans for the future include decentralizing his work, this means opening up identical locations in other parts of Monrovia, and in a few of the larger cities around the country.

Not to ignore user experience, none of the current services has perfected the user engagement process. A lot of thought will need to be put into the channels used. Sms, mobile web, web, and mobile apps will have to be applied appropriately with elegant service degradation where necessary.

Maybe one of the incumbents should roll out a non affiliated start-up that will take the market by storm. We love underdog stories…it may be a great way for the bigger brands to break into the market with some fresh thinking.

Mbugua Njihia

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An Africa based entrepreneur in the pursuit of opportunities without regard to resources currently controlled striving to build services that have real-world value for my beloved continent and beyond while having fun along the way.