By Emenike Vincent Onyembi
OPay has announced it is suspending some of its Nigerian operations including ORide, OCar, and OExpress excluding its payment operation, Opay. The company said it is pausing some of its operations due to the harsh business conditions which have affected many Nigerian companies.
I have a feeling that this has little to do with the Pandemic, but as they say, never waste a crisis. Opay were already nosed down before the pandemic. These are all capital intensive projects and honestly, their launch strategy was too “hurried” (and lacking in detail) to work.
The pandemic might have snuffed out any breathe they were hoping to do ‘agidi’ with. We should remember that they launched these other products mainly as funnels to drive their payment business. These shutdowns only allowed them to size down and focus on payments.
The only downside here is that a lot of people will lose their jobs. And many other organizations will follow this strategy now. We should have an honest conversation about this internet/app businesses deploy in Nigeria. We need a shitload of money to be anything close to successful.
The bills with running these businesses are sick. You know, you have significant experience there. Entrepreneurs without grit and tenacity can not play in this world. An important question is, “are the employees aware of what they are getting into?” “Do they know this thing can shut down at any moment?”
I personally think the only way to unlock Nigeria’s potential at this point is for more of these businesses to spring up. This is the only way we can harness our huge labour force and literally build (in an information system sense) Nigeria.
For instance, we know Amazon designed a section of the CIA’s cloud infrastructure. This is a company that started in the mid-nineties. The US went to the moon a quarter of a century before that. I am unhappy that Nigeria is this difficult but we keep pushing. The employees are always the ones who take the hit.
I think labour laws in Nigeria should be better, especially the length of time it takes for such cases to go through its full track. The reality is, if you are not into fintech, you will most likely struggle, a lot. Unless you are very fortunate to have plenty of funding.
Servers are billed in dollars, valuation is in dollars, but customers pay in Naira, this in itself is a problem. A major problem! As an app/service platform, you need a lot of users. A lot.
The average cost of acquiring one meaningful user can easily be 10 (even 20) dollars. Yes, it is that mad. What about the cost of retaining that user? Mad. But we can not give up. The cost of retaining the users is not even totally in your hands, if you like talk, plenty English.
There is NEPA wahala. “No be person wey see phone charge go use your app over a long time?” Then there is epileptic internet connection, yet expensive.
There are people who only buy Social Media Data, packages that only give access to WhatsApp, Twitter and the likes.
To get a lot of people to use it, there are too many hurdles to cross, and you are mostly not in control. To make issues worse, many of the ‘successful’ ones are built on funding and bloated valuations, not on profit or production efficiency. Just look at Tesla becoming more valuable than Toyota, not because of products sold, not because of production capacity, but because of the promise of a future that is not certain and because of plenty financial backing.
While we feast on the part where Opay talked about how they were disrupted by government policies, we should also note that they’d acknowledge that they recorded 44% growth in their business activities.
Without being emotional, it is funny how Opay wanted to benefit from irregularities. If we had been developed like the western countries they came from, would those bikes ply the highways? The government became a bit sensible and they were worst hit.
It is for safety reasons. No sensible government is run on sympathy. Always have this in mind. The government may have their own fair share in the blame but they are not the main reason Opay is packing up. I think Opay did not get their business strategy right. So many of their riders left them even before Lagos government banned bikes.
