naijacutee:

But Dealdey is copying Groupon too... are they at risk?

Dual Core: It wasn't built with just the passion, it was built with people's funding.

When something is built with passion, it takes time to watch it grow and you don't mind if it doesn't start making you any real money in the first 2-3 years. On the other hand when something is built with funding, the aim is profit from the start. So when you can't realize that aim you come under pressure from those funding your project to kill the business as they don't see any profits coming in.

remmyz:

Dnt forget that konga, jumia and the likes are still very young compared to mocality. i think what brought down mocality was that they were dolling out money before making profits and they dnt have a good business model. you cn imagine them paying btw 70 naira and 150 naira to people for registering a verified business.

In 2 years time, if kinga and jumia still stay afloat, then i will believe Nigerians are ready for online business else........

spree: What happens to the employees?

naijacutee: Yes, I got an an e-mail stating that as well.



Do you really think internet penetration is the problem? If so, how are sites like Jumia, Konga and Dealdey able to survive if this is the issue? How is @Gidi-Traffic able to gain such great recognition time and time again?

jm8181:

Let's take example of VConnect.com - They started well before Mocality and still surviving ... I think it's not question of internet penetration or type of business itself.

It's more about patience, understanding market of business directory and knowing SMEs better.

jm8181:

Let's take example of VConnect.com - They started well before Mocality and still surviving ... I think it's not question of internet penetration or type of business itself.

It's more about patience, understanding market of business directory and knowing SMEs better.

zenatta:

Oh they did...thank goodness you were spared the sight of sad looking,seemingly reluctant boys who held up banners for them in Ikeja.

jm8181:

Let's take example of VConnect.com - They started well before Mocality and still surviving ...

naijacutee: Yes, I got an an e-mail stating that as well.



Do you really think internet penetration is the problem? If so, how are sites like Jumia, Konga and Dealdey able to survive if this is the issue? How is @Gidi-Traffic able to gain such great recognition time and time again?

bigx: The Business model they are all copying, Groupon is not a viable one, so they'd all just go the same way with it

Dream1: The reason Dealdey works very well is because it is owned by E-motion. A major player in the Nigerian advertising market. They control about 40% of physical ad space on the island. This gives them an avenue to use some of that to their advantage. They also had to work up to where they have reached thus far. The first ad i ran with them, they demanded only about 10-15% commission. Now, they want almost 50% cos they now control that market. Dealdey also do a lot of online ads which targets the right people i.e people that already have internet access. I still doubt very must that Dealdey are making a massive profit but they will be able to survive based on their Sister company's strengths.

Guk:

Its a good thing that this closing down came up as here a number of lessons to be learnt from it. Pls follow closely.

I am a Business Consultant to Dealz9ja www.dealzng.com/deals/all/ the only remaining competitor to Dealdey. The others in competition were (a) Deals.mocality (2) Rightdealz.com (3)Qlu Qlu (4)All4Naija. They are of now blessed memory.

Pls note that Deal of the Day website are cloned after Groupon and are totally diff from your regular Product websites like Webmallng; Konga; Jumia; Kamdora & such like.

Deal of the Day website DO NOT make a lot of money and could collapse anyday if you dont get your model right. Dealz9ja has bn sustainable becos, a niche has bn carved; subscriber base is sufficient to run at a profit; overheads were contained right from start up; areas that needed to be outsourced were done wt hard negotiations. The truth be told, cost of Adverts is the bleeding point. A typical month on Facebook is =N=500k How do you sustain such from even sharing 50% commission from your merchants? Meanwhile, Deals.Mocality had adverts on DSTV during 2012 Champions league and Olympics. You do not want to know how much such cost. I had predicted their downfall from them as it was not sustainable.

Dealdey has competitive advantage becos they are owned or supported by eMotion, an outdoor advert comapany that is awash with cash. eMotion is funded by ARM & ARM funds the Lekki Epe Expressway & thats why eMotion has the right to advertise exclusively on that prime location from Bonny cam all the way to Ajah and beyond.

Dealdey's commisions are high, and that has pushed some of their Merchants to Dealz9ja. This business is all about Strategy; Knowing the Market; playing the Market & sustaing your business model and grow organically as Dealz9ja can never match Dealdey in advert spending & is not even attempting to. hey have their own clientele & business is good & profitable.

As for Jumia & Konga, the jury is out on them. The Advertisement spend is HUMONGOUS, i hope it doesnt bring them down after a couple of years. Its just not sustainable. You are talking of advert spend of roughly a =N=1M daily!

In 2012 alone, over 5 dozen ecommerce bizs can online, over 90% are gone. Its a marathon biz not a sprint.

More later.....

sarutobi:

You just messed with by brain. Its about to explode. 1M naira daily? who does that?

Guk:

Yes, 1M naira daily. Jumia; Konga & Dealdey are on Facebook 24 hours a day. They are also on Google Adsense. Dealz9ja used both media extensively last year and the advert budget was frightening! Theres also SMS cost; daily email cost etc. Na look before you leap biz O!

Brand_new:
Have you seen their financials or you're just assuming this.



******Business success is all investors care about and not just survival.****

Tinyemeka: I'm not being sarcastic. I never knew what mocality was until now (after checking it up on Google).

Bottomline: They didn't do sufficient advertising.

balogunsam:


nice input sir.so how will u suggest a startup ecommerce site with passion and little funds....I mean really little funds reach people when ad campaigns with facebook are costing so much?

jm8181:

you're right. A rational person must analyze everything that includes Complete SWOT Analysis. Btw My simple point was ...Business Directory / or Local Search Engine isn't disappointing segment at all. It is a very good industry and Indeed this industry would grow further.
(now why it would be grow; how it would grow; - certainly I am not assuming here; It is based on Research conducted by Popular Mobile Adnetwork)

As far as VConnect's financial is concerned; I don't know to be very frankly. But one thing is for sure. Mocality had huge financial support from SA based Nasper group.

sportfeva: I mill advert per day, that's too subjective of you-business consultant. No sane fellow could believe that. Jumia and Konga should just work hard, really smart and hard on customer service relations pertaining to e-commerce. That will be a good start and leverage for them.

Guk:

Do your numbers. Jumia, Konga & Dealdey have about 20 different per click ads between them running daily(24/7). Go to create an ad on Facebook and see how much it will cost.

Also on Google Adsense, they bid the highest to constantly appear. As i said, we have been there, so i know what i am refering to. Ask those who have done online ads ahy they are no longer doing them. Its simple cost.

Guk:

Vconnect belongs to the same group as Indomie and Panasonic & probably others. Its owned by Indians so the 1st thing you must realise is they are patronised by all Indian companies and friends of companies. That usually gives them an internal launch pad. Thats a clear advantage over a fresh Nigerian startup.

Mocality has roots in South of Africa. Mocality is broken into 2 distinct businesses (1)Mocality Directory Services (2)Deals.Mocality which is a deal of the day website.

jm8181:

Thanks Guk.. For your info.. This is something new that our nairlanad users may not aware about it. So by that logic all big Internet startup companies are funded by outsiders isn't it ? Mocality / Dealfish / Olx funded by SA based NAspers; Jumia, konga by Rocket Internet Venture Capital which is european based. ... Tradestable is also based out at Europe and part of Schibsted Classified Media. So there is no surprise; If those companies are spending huge on advertising; because of huge pumping of money by their parents companies.

As everyone knows that even Microsoft, Google, IBM all our US based companies. But it's good that like all developed countries; our country saw their investment here. In last 2-3 years; Such giants IT companies started coming in Nigeria;; and more are geared up to set up their base here.

bottom line is : This shows Nigerian IT / Internet industry is booming. That's the reason most of the companies have started investing here. Isn't it good sign? Yes this is a business; some fails and some succeeded.