Nigeria’s online marketplace, Jiji, has acquired its rival, OLX, in a bid to extend the company’s footprint on the African continent.
Although the worth of the deal was not made public, it adds to the growing list of divestment in Nigeria.
Details of the deal: In addition to the acquisition of OLX Nigeria, Jiji will also take over OLX’s businesses in Ghana, Kenya, Tanzania, and Uganda. The acquisition is, however, subject to regulatory approvals.
Also, OLX users in Nigeria would be directed to Jiji marketplace. The OLX users in the aforementioned countries will also be redirected to Jiji marketplace. The deal is backed by one of Jiji’s core investors, Digital Spring Ventures.
Why is Jiji not operating OLX as a standalone: With the popularity OLX has gained in Nigeria and across Africa since its establishment, one would have thought Jiji will adopt the option of letting OLX operate alone and keep its management.
But then again, since both companies offering the same services and competing for the same customer base, merging them will help avoid conflict of interest which could arise if the companies operate separately.
Benefit of the deal to OLX users: Users of the sell-and-buy classifieds websites will be enabled to use Jiji‘s market-leading products and services.
Reaction from both Companies
The Chief Executive Officer and co-founder of Jiji, Anton Volyansky, said the deal will provide customers a safe and secure online trading platform.
“we look forward to our new customers joining Jiji on its journey to empower the lives of its customers by providing a safer, more secure and enjoyable online shopping experience.”
Also, the Board Director and co-founder of Jiji, Vladimir Mnogoletniy, said the acquisition is important to Jiji‘s expansion drive across Africa. Adding that, in the next three years, the company’s projection is to be among the top 10 classifieds businesses in the world by traffic.
“We believe that this transaction is pivotal for Jiji’s business. With this transaction, we plan to build the largest Africa-based classifieds business, creating a new experience for Africa’s fastest-developing countries and their combined population of 300 million.
“We firmly believe that in the next two to three years, ours will be one of the top 10 classifieds businesses in the world by traffic.”
Giving his own remark, Sjoerd Nikkelen, General Manager of OLX in Africa, Middle East and Asia, said there’s no better time to sell the company’s interest than now.
“We are proud of our achievements in Africa, including the sustainable businesses we have built in Nigeria, Ghana, Kenya, Tanzania, and Uganda. We continually evaluate our portfolio of classifieds businesses to ensure a disciplined approach to how and where we allocate capital and management time.
“With our focus on accelerating the growth of other markets, now is an opportune time to sell our interests in these markets. We are pleased that Jiji will continue to provide the exceptional quality of products and services that the customers in these countries have come to know and enjoy from OLX.”
Meanwhile, the core investor who led the acquisition, Digital Spring Ventures, said the combination of Jiji and OLX businesses will be a formidable force in the African e-commerce market.
“We are pleased to be able to assist our partners at Jiji on this transaction and we strongly believe that the combined Jiji and OLX businesses will become a formidable force in the African e-commerce market.
“This transaction further advances the consumer reach of one of the star portfolio companies in our current fund, which is focused on partnering with ambitious entrepreneurs to deploy capital in the Internet and technology sectors in some of the world’s most exciting emerging markets.”
E-commerce startups continue to divest
OLX is not the only e-commerce company that divested its business in Nigeria. Before now, e-commerce startup, Efritin shut down in 2017, after announcing that the cost of doing business made it difficult to keep operating.
Also, ICT company, Zinox Group acquired online retailer, Konga in the first week of February 2018. Following the acquisition, Konga and Yudala announced that they would be merging to become one.