Lithuania-based Mobofree, the social marketplace that offers people in Nigeria, Ghana, Uganda and Zimbabwe an online venue to buy, sell and swap used products, just last week disclosed that the value of goods exchanged on its platform rose by 274 percent in the last year, to US$1.97 billion—30 percent above the 2015 forecast.
“Second-hand goods is a huge category everywhere around the world. In fact even if online marketplaces and e-commerce shops have grown dramatically in developed countries, second hands goods transactions are growing as marketplaces allow much easier way to find, value and perform transactions,” said Cristobal Alonso, Mobofree’s CEO and co-founder, via email. “I see the same happening in Nigeria and Africa; we will see huge growth in both new items and second hand goods through online platforms for years to come, and even with higher growth rates.”
Mobofree foresees growth in Uganda, though with smaller absolute values than in Nigeria, as the economy is smaller and Internet penetration is one third of that larger country.
A variety of new online marketplaces including Mamymarket.com, Locanto.com, Myjoymarket.com, Jiji.ng, Cheki.com, Kaymu.com and OLX have been launched across the continent in recent years. All the marketplaces rely on building and winning the trust of their users. Buyers and sellers go through a vetting process before being allowed to do business on the platforms.
A recent entrant is Sweden-based Saltside Technologies, which launched several sites for used items—Bikroy.com in Bangladesh, Tonaton.com in Ghana and ikman.lk in Sri Lanka—before launching Efritin.com in the Nigerian market last week.
While Tonaton.com is considered Ghana’s largest online marketplace, with over 130,000 ads listed and an estimated one million monthly visitors, Efritin.com has several marketplaces to compete with in Nigeria including Mobofree, which currently has over 500,000 active classifieds in the country.
Alonso maintained that marketplaces “are just at the start of the growth curve” of the opportunities presented by the used items market.
All the market needs is a simplified and expedited process of matching buyers and sellers in a local setting, and “a seller gets more optimal exposure because of the nature of digital platforms,” said Steve Kwizera, CEO at EZ-Tech Solutions, a technology consultancy, via LinkedIn.
“My experience with jiji.ng was excellent,” Kwizera said. “I saw their ad on Youtube shortly after I got to Lagos and used them when I was looking for a router. I was able to find seller who was less than a mile away ... and got my Swift router at an excellent price.”
Kwizera noted that the market would be bigger if the used-item platforms also allowed trading in new items, like several U.S. retail sites do, as there are some used items that have been hard to find in months.
Many people in Africa are used to buying second-hand items for various reasons. They go to markets created specifically for used items, with the idea that they are mostly of high quality and sold at lesser prices. Also, Africans have a history and reputation as being savvy traders.
The soaring Internet penetration rate on the continent has been a contributing factor as well, said Regional SEO Head at Kaymu, Ejiro Esiri. “The business opportunities are there for people to grab them. There is a big market that keeps growing and as a business that used to be primarily offline, the online marketplace model provides an opportunity to reach people in different areas,” Esiri said.