Nigerian e-commerce online mall, Konga drops payment-on-delivery and lays off over 300 staff in an ongoing restructuring exercise.
Konga Nigeria says that they have taken the decision to do away with cash-on-delivery as part of efforts to become “more efficient and to focus on the orders that consumers really want”.
The online mall company says that it transformed to a prepay only platform in mid-November 2017. It says there has been a solid shift towards online payment by customers. “Since we switched over, we have seen a marked increase in online payment,” said Konga CEO, Mr Adekoya.
Konga’s official statement also stated that the current restructuring means that their “operating costs will be lower” and will mean doing away with warehousing activities. As such, a layoff is in the works. The statement did not specify a number, but Quartz Africa reports that the layoff affects 300 members of staff – around 60% of Konga Nigeria’s total workforce.
The Good And The Bad As Konga Drops Payment-On-Delivery
It is cheering news that Konga is scrapping payment-on-delivery and has become a prepay only platform. I have been an active advocate for the scrapping of the payment-on-delivery practice, and it is good to see Konga bell the cat. There has been a lot of hype about Nigeria’s “e-commerce” sector, when in reality most of the payments have been via cash – on delivery.
Payment-on-delivery has hurt the development of the industry. It hurts e-payment platforms that have invested heavily in powering the digital economy. Cash-on-delivery hurts e-commerce platforms by increasing inefficiency and business operational costs. It also hurts consumers who have to pay to cover those overheads and deal with the more inefficient processes.
Sad as the decision to layoff staff is, this is not strange. Every time a business entity adopts more of digital technology, staff hitherto involved in phased out activities have to go. Konga doing away with warehousing operations means that a sizable number of warehouse/logistics hands have to go. Hopefully, some of them will find a ready spot in the numerous startups springing up on every side.
Konga commenced operations in July 2012 as an online store with investments in inventory and infrastructure, and later evolved into an online mall.