As Facebook takes on Amazon on the global e-Commerce market, OPay battles Jumia, Konga in Africa
Pascal Oparada
It is the battle of Titans as tech giants, Facebook and Amazon head for a showdown in the global e-Commerce market.
The social media giant, Facebook, would be deploying its global dominance in social media to take on Amazon, an established goon in the business.
Facebook’s over 2.6billion active monthly users would be its greatest assets as the company seeks to ramp up support from them.
The company announced plans to foray into the e-commerce market, a terrain which is the exclusive preserve of the likes of Amazon, Alibaba, Tencent, et al.
‘Facebook Shops’ would let sellers create digital storefronts on Facebook and Instagram, according to a statement from the company.
Users will browse products and send direct messages to sellers to arrange for purchases and deliveries through an online checkout feature introduced recently.
Facebook’s chief executive, Mark Zuckerberg, said in an interview with the Financial Times that he had accelerated plans for Shops to take advantage of the boom in online shopping during the Coronavirus crisis.
He added that the social media giant would be able to use the data to improve its advertising service and charge more for it.
“If you browse a shop inside of our app or if you buy something, we will see that and we’ll be able to hopefully use that to show you better recommendations for other things that you’d be interested in in the future,” he said.
Ndubuisi Ekekwe, a tech analyst said that would be a hard nut to crack for Facebook, whose main forte is advertising.
He said the only advantage Facebook ‘shop owners’ would have is that it would not charge them commission as against Amazon which charges up to 10 per cent to sellers on its platform.
“The biggest risk to Amazon, from Facebook Shop, is that the commission it takes on sales from vendors is the business.
“Commission on sales is not Facebook’s business and Facebook plans to waive that commission for businesses that sell on its platform. If you sell books on Amazon, you will pay Amazon say 10% as commission on gross.
“But on Facebook, that is your money to be kept. Facebook does not need the commissions as its core business is advertising but Amazon needs that money as that is the business of the merchant aggregator.
“Facebook Corp is a “continent” with an excess of 3 billion people, well ahead of Amazon’s forest. On logistics, provided you are not promising same-day delivery, most economies with functioning postal services will serve these Facebook vendors, ” Ekewe said on a LinkedIn post.
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Facebook hopes to deploy its family apps of Instagram, Messenger and WhatsApp in the battle against the global e-commerce fight.
OMall berths amid distrust
Digital payment platform, OPay surreptitiously introduced Omall in its app recently. A recent upgrade of the OPay app would haul users into the world of online shopping, which has remained the rights of the long-entrenched ones like Jumia and Konga, the biggest players in Africa.
Omall would take advantage of Jumia’s woes to cut into its market share.
Jumia, a leading African e-commerce giant in Africa, has been fighting to save its face after it listed in the New York Stock Exchange last year amid rave reviews, but the hysteria was thawed by a scandal.
Since then, Jumia shares have been on a constant decline forcing German tech company, Rocket Internet to pull its shares from the company.
Jumia has been left struggling amid other woes of poor or no delivery by customers who order from it.
While Rocket Internet did not reveal the exact amount it generated from the sale, it stated that the proceeds were included in the €2.1 billion ($2.30 billion) net cash the company had as of March 31.
That is a huge blow to Jumia which had been fighting the battle of its life on the global e-commerce market.
Although Jumia maintains the lead in the e-commerce business in Africa, the likes of Konga, a Nigerian e-commerce platform acquired by Zinox Computer owner, Leo Stan Eke and merged with Yudala, owned by his son, to Eke with Konga, is giving Jumia no breathing room.
Even though Konga hasn’t given Jumia, whose biggest market is in Nigeria, the kind of fight analysts expected, Jumia has been lately squeezed by scandals of fraud.
Omall’s entrance is expected to further shrink Jumia’s and Konga’s market shares especially as the payment platform has already perfected payments via its OPay app.
Omall has already commenced operations to the admiration of users who get their orders delivered promptly.
Recently, it launched flash sales which saw prices of goods slashed by 80 per cent which left users scrambling to buy from it.
The global e-commerce landscape just got interesting.
