Almost every time I open a video on YouTube, there’s at least one advert from an e-commerce platform. Chances are you have the same experience because our social media spaces have become the most wanted billboards. That makes sense, seeing that people spend most of their time on social media today. This trend has pushed social media and digital marketing to be among the most in-demand digital skills today.
E-commerce in Africa has become very prospective. The Covid-19 pandemic and increased internet penetration have led to a rise in consumer spending through mobile apps. However, in Africa, promoting e-commerce platforms on social media is almost like advertising via your competitor. A study by the United Nations Economic Commission for Africa and GSMA says social commerce accounts for the bulk of e-commerce activity in markets such as Chad, Equatorial Guinea, São Tomé and Príncipe, and the Central African Republic. What this means is Africans are more likely to patronize people they interact with on social media.
One of the reasons for this preference is trust. People buy things from sellers they can easily interact with, and others have recommended. A survey by ReferralCandy shows that word-of-mouth is the most trusted form of marketing among consumers. The need for opinions of other users is so high that nearly nine out of ten (89 per cent) of consumers read reviews before buying products online. So e-commerce platforms need customer reviews to promote their businesses. But it’s also not easy for consumers to find reviews they can trust.
Chooya, a Nigerian startup located in Aba, is plugging this gap by bringing social media and e-commerce into one platform. After winning $950,000 from the Entrepreneurship World Cup (EWC), Chooya is creating a “TikTok” for e-commerce. On its platform, consumers can now recommend e-commerce companies and even get rewarded for it.
Most success stories in Nigeria’s tech space come from Lagos-based startups. This fact is not hard to imagine as Lagos is Nigeria’s commercial capital. This year, it overtook Nairobi to house the most startups in Africa. Also, a large portion of VC funding this year went to Lagos-based startups. But Lagos is also the smallest state in Nigeria, and its population is getting denser: 77 people move into Lagos every hour. However, Igwe Uguru, the founder of Chooya, chose not to follow the bandwagon but to build in Aba, Abia State. According to him, “you can build from wherever you are”.
In this interview with Ventures Africa, Igwe Uguru discusses his entrepreneurial journey into this groundbreaking innovation.
Tell us about yourself and your entrepreneurial background.
My name is Igwe Uguru, and I am an “entrepreneur for entrepreneurs”. I started as a software engineer before I moved into entrepreneurship. I founded my first startup (which failed) while I was in school. In that time, I learnt a lot of things I apply today. I also found out after failing that there were no communities for founders, which contributed to startup failure. That moved me to start RAD5 tech hub, the foremost community-focused innovation hub in Aba, Abia state.
The innovation hub is giving founders the environment to build, launch and scale their startups. That’s why I say I am an entrepreneur for entrepreneurs. I want others to succeed as well. I’ve had the privilege to be a part of several programs focused on building other founders. One of them is the Startup Weekend, where we help entrepreneurs build their companies within 72 hours. I’m more focused on innovation, and it was this drive that made me start Chooya.
Chooya is “digitizing word-of-mouth marketing”. What does that mean?
Whenever your friends or loved ones buy something, and you like it, you ask them where they got it. Even when their recommendation comes unsolicited, you are more likely to go with it when you want to make a purchase. That’s word-of-mouth marketing: a customer-to-customer recommendation. So we’re digitizing it by giving them a platform to do this with their mobile devices and computers. “Chooya” means “find it”, so we’re helping people find products they want. People generally move towards viral content. So when a customer recommends a product or service and several others agree, it will drive sales.
You recently won the Entrepreneurship World Cup. What has changed since then?
A lot has changed since then. Our story went viral, so winning that competition gave us a global audience. Then it gave our credibility a massive boost. Partners, investors, and users believe in what we do more than ever, and that’s a big opportunity for us. The team is also more inspired to reach new milestones and break more records.
Why did you choose Aba over Lagos and other cities?
First of all, our product is a platform that one can build from anywhere. The only things we need are access to the internet and skill. The internet also makes it possible to reach out to clients from all over the continent. At the same time, succeeding from Aba has made us an inspiration to people from our region. Some people have even started considering moving their startups from Lagos back to the South-East. We know there are great opportunities in Lagos. But soon, opportunities will start flowing to other regions, including the South-East. Also, there are a lot of problems to solve in these regions, and we don’t have nearly enough people for that. Instead, talented people are moving out of this region. But if startups succeed over here, people will be motivated to come and solve problems and grow.
What are Chooya’s challenges today?
Our challenges are primarily because of our location. The first challenge here is access to talents. Since most people migrate to Lagos and other “happening” places, there aren’t enough people left to hire. Fortunately, remote work allows us to employ people from all over the country, including Lagos.
The second one is a bit controversial. It seems investors and potential partners find it hard to accept that there are great talents over here. A friend of mine struggled with his startup while he was in Aba. Investors didn’t take him seriously. But just two weeks after he relocated to Lagos, he secured funding. Talents and great founders are everywhere in Nigeria, and people need to realize that. Many investors did not believe in our brand until we won EWC. Now they are coming back, wishing they had invested earlier.
Then, of course, there’s the problem of electricity. We spend a lot buying fuel, and that’s bad for business. Finally, the markets over here need you to have tougher skin and be more innovative than usual. In places like Lagos, it’s easier to drive adoption since there’s a more enlightened market. That’s not the case here, and you still have to build for them.
How do you see Chooya’s model influencing e-commerce in Nigeria and Africa?
We were once an e-commerce platform like all the others. But we had to innovate based on research and feedback. Now, we are no longer competing with e-commerce platforms. Instead, we’re helping them drive sales organically. Customers don’t need to always “discover” products on e-commerce sites and read several reviews before deciding to purchase. Instead, reviews may persuade them to buy products they had not previously considered. This saves the consumer time they could have spent checking reviews from various sites, which speeds up sales. After customers use our platform to review products, e-commerce businesses can track how much sales they make as a result. Then, they can decide to reward these customers for their reviews. What we are doing is to drive sales while empowering the customers. A happy customer can now get rewarded for simply expressing that he is happy.
Written by Oluwatosin Ogunjuyigbe