E-commerce companies in Nigeria are dropping their popular pay-on-delivery option to stay alive

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This week, Konga, one of Nigeria’s pioneering e-commerce companies, said it will start charging merchants to list products on the platform moving away from a model which allowed free listing but earned sales commissions. It has also shut its warehouse service and, crucially, will no longer allow customers pay for orders upon delivery.

The changes came at a cost as Konga fired around 60% of its staff. In a blogpost, CEO Shola Adekoya said the move will allow the company run a “more efficient business” and lower its operating costs. Essentially, Konga will no longer stock any items and will only facilitate trade between merchants listed on its platform and willing buyers.

Konga’s structure change signifies just how tough it is to manage inventory for an online business in a vast and fractured market like Nigeria. The big hopes of dominating the Nigerian market like Amazon does elsewhere has been met with many difficulties. In their early days of operations, Konga and other e-commerce players allowed customers to pay for orders upon delivery to work around gaps in payments infrastructure.