When Dealdey started with a humble ice cream deal on March 22, 2011, many felt it would be just another e-commerce service that would soon bite the dust.
Before then, while approaching it from a cultural perspective, I was confident that since Nigerians love to do group-buying in its many forms, then group-buying sites would likely do well over the years, but was unsure if there would be a critical mass of people doing so online.
Two years later, the daily deals start-up is gradually becoming an e-commerce giant in the likes of LivingSocial or Groupon, the world’s leading players in that space.
In an email conversation with Sanaz Etebarian, the recently appointed Chief Executive of the group-buying site this week, she told me that when she first joined DealDey a year and a half ago, everyone thought she was crazy. As expected, there were people saying group-buying would never work and that Nigerians would never buy online due to trust issues and scams.
“Fast forward to today…I think it’s incredible how the landscape has changed so drastically and in such a short amount of time. It’s exciting that more and more people are going on line to shop,” said Etebarian.
With close to 15,000 discounted deals so far on a range of products and services in restaurants, spas, as well as retail shops, and currently with 1,600 merchants (up from 245 merchants one year ago) and over 88,000 purchases (up from 6,000 a year ago), the service is one of the fastest growing e-commerce platforms in Nigeria.
Etebarian revealed to me that its members grew from 100,000 last year to over 500,000 users as of today, a 500% growth increase in just one year. Quite a bullish growth! With over N400 million saved in discounted deals (up from N10 million saved a year ago), Dealdey.com has definitely become the go-to source for the best daily deals in Nigeria.
But while the company received $1 million in funding last year from Sweden-based Kinnevik, a $7 billion investment holding company, it has yet to take any other funding and seems to be growing its revenues month-on-month.
Although Etebarian declined to comment on Dealdey’s revenues, we’ve learnt from industry sources that the company’s gross revenue as at December 2012 was over N200 million (about$1.27 million) since its launch and the service generated about N40 million ($253,000) last December alone.
But the secret to Dealdey’s success isn’t far fetched.
The company’s founder and former CEO, Sim Shagaya, who quit his role last November (although still a board member) to focus on leading e-commerce site, Konga, had earlier noted that building a strong logistics infrastructure has been the key to their phenomenal success in the e-commerce space.
Again, one of his business philosophies which has tied in so well with his ventures has been about providing excellent customer service that would generate word-of-mouth commerce and repeat customers.
But of course, logistics and customer support has not been the only challenges faced by e-commerce sites in Nigeria. There’s the issue of trust and payments, which Dealdey seems to have gained customer loyalty over the years.
Etebarian said: “We pride ourselves in the fact that we’ve built a brand that has such strong loyalty from it’s members. All of our orders are 100% prepaid which proves that we have past the test and gained people’s trust.”
It would be interesting to see how the sector grows further in the years to come as more and more Nigerians continue to realise that life’s better and cheaper online.