“At the most basic level, the issue is that when you are doing fashion, you are not only doing the creativity but also doing distribution but if you had to do distribution through the old fashioned way, say you want to go rent a store, you’d be spending 15 million naira. That’s almost 100,000 US dollars,” CEO Konga.com, Sim Shagaya told CNBC Africa.
With the current lack of infrastructure in the country, the average fashion designer will end up spending significant amounts of money on overheads that the average fashion designer in developed countries do not worry about. The added cost of overpriced stores in malls will drive the designers online.
“What Konga gives you, is a platform for other people to build business on. So you can get your stock, whether it is produced in Nigeria or other parts of the world, stock it in our distribution centre, and when somebody buys your stock, we can pick it, we can pack it and we can send it to anywhere in Nigeria. That changes the dynamics of fashion entrepreneurship completely,” Shagaya explained.
With the growth of the internet in Nigeria, more Nigerian’s now shop online than ever. E-commerce not only allows for the rapid growth of the fashion industry but it also saves the designers time and money. Thus, allowing them to focus on their creativity.
According to Shagaya, gone are the days when you had to build 50 or 100 stores to achieve scale because scale can be achieved very quickly.
“The future model is going to have one of two flagship shops for the brand that deliver and anchor the experience for the customer, but the volume will be sold on e-commerce. Even the e-commerce can be sold in the flagship shop, it can happen on the web, it can happen in a variety of places,” he added.
Shagaya believes that Nigeria is going through the process of Omni channel retailing where the customers are reached through different channels