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Konga’s Sim Shagaya reignites e-commerce war as he reacts to Jumia’s scandal

Fakoyejo Olalekan
Konga’s Sim Shagaya reignites e-commerce war as he reacts to Jumia’s scandal

Sim Shagaya.

The founder of Konga, Sim Shagaya has reignited a 7-year old war with his reaction to the Jumia scandal of $17.5 million improper orders, inflated figures and U.S class action for false statement claimed to have been used to deceive investors. 

Shagaya was the Chief Executive Officer of Konga before stepping down in 2016. His position is occupied by Shola Adekoya. Konga is the closest rival of Jumia in Africa. Both e-commerce companies started operation in Nigeria before branching out to other Neighbouring countries. 

[READ MORE: Jumia makes inroad into pizza market, partners Pizza Hut]

In a series of tweets on his social media handle, Twitter (@SimShagaya), Shagaya condemned the false statement Jumia was accused to have given their investors. According to Shagaya, such act has a detrimental ripple effect on other players and customers. 

What Jumia did: Nairametrics had reported that Jumia is battling several issues like improper orders by some of its employees, several class-action lawsuits for misinforming investors, as well as the increasing losses which grew 59.2% in one year.

While admitting that he and his partners in Konga made mistakes during his time at the helm of affairs at Konga, he said they never deceived investors like Jumia is being accused of. 

In his assertion, engaging in such activity hurts the whole e-commerce chain, “We made many operational mistakes in the companies I founded but one thing we never did was mislead investors. Never. @JasonNjoku (Founder of IrokoTV) was prescient several years ago (paraphrasing): the actions of players who do this not only hurt themselves & their investors but entire ecosystems.” 

Jumia management knows: While he didn’t name Jumia, Shagaya said there was no way Jumia’s employees engaged in fraud of $17 million without support from the management of the company. 

“For someone who has built a large-scale e-commerce business, I can confidently tell you that there is no way that a $10m+ fraud can happen without the complicity or, at the minimum, the tacit consent of management. It’s impossible.” 

Jumia hurting Konga: Shagaya in his Twitter thread, said Konga is being hurt by the activities Jumia has been accused of and the figure inflation by Jumia workers. 

He said investors are constantly comparing Konga’s growth with that of Jumia whenever they had a meeting and this usually pained him. According to Shagaya, Jumia’s ‘make-believe’ figures were often rubbed on his face, with investors asking why they struggle to meet Jumia’s growth numbers. 

Why Shogaya is pissed: “What annoys me is that this action of my competitor directly hurt my business. At every meeting with my investors, I was constantly peppered with questions about the ability of my competitor to grow at what seemed at a faster rate than I. We know now that this growth was a lie.” Shagaya tweeted. 

Adding that, “What annoys me is that this action of my competitor directly hurt my business. At every meeting with my investors, I was constantly peppered with questions about the ability of my competitor to grow at what seemed at a faster rate than I. We know now that this growth was a lie.” Shagaya tweeted. 

He added that, “This is how ecosystems are hurt and credibility of entire environments damaged. They achieved what they wanted. But ultimately they were shortsighted. The market, consumers and investors, always win.” 

Meanwhile, Jason Njoku reacted to Shagaya’s comment on Twitter with an article he wrote about Jumia last year, “Is Jumia using jazz?” In the article he wrote last year (2018) April, Njoku was stunned by Jumia’s figures and how they are able to attract so many funds from investors that make them superior to Konga despite both e-commerce companies launching the same year.

Jumia vs Konga: Aside from the extra-curricular activities attached to Jumia, which led to Shagaya’s outburst, Jumia and Konga had also been at each other’s jugular for years. 

In order to secure the e-commerce marketplace beyond Nigeria, Jumia’s parent company, Rocket Internet, bought and registered Konga-related domain names in ten countries. 

[READ ALSO: Konga set to beat Jumia as Africa’s first profitable e-commerce business]

This move by Jumia infuriated Konga, and the latter threatened to take Rocket Internet to court, stating that registering all Konga-related domain name will handicap the company, affecting its expansion plans when the decision to embark comes. 

The domain names Jumia bought; 

Shagaya in a letter in 2014, described the German’s decision as a “Destructive foreign competition in the internet industry.” According to Shagaya in the letter, Rocket Internet has been trying to take down other local startups that operate in the same market where its (Rocket Internet) subsidiaries are operating. 

Rocket Internet owns Camido, Jovago (now JumiaTravels), Kaymu, Vamido, EasyTaxi and HelloFood. 

Shagaya claimed Rocket Internet was gunning for the likes of Cheki, Private Property, BuyAm, Tranzit, and CityChops. He said in the letter, that this ‘destructive’ business model is intended to drown indigenous innovation.

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