Naspers/MIH Africa is reportedly planning to close down its African classifieds operations to allow the giant media group to focus on e-tail sites and grow its portfolio in other developed markets.
If confirmed, Naspers /MIH Africa will leave a huge gap in Africa’s classifieds market where it plays a huge role with its numerous sites.
After receiving news last week that MIH Africa CEO Bill Paladino had left the firm, TechMoran send both Naspers and Bill an email to confirm the development.
Today in an email interview Bill Paladino former MIH Africa CEO confirmed his departure from the firm and did not give further details about his departure or the future of MIH Africa.
Paladino told TechMoran, “As I am no longer with MIH/Naspers Africa, I cannot answer these questions. As for my future, I am still sorting it out. Not much to report on that front.”
Though Paladino did not talk about MIH Africa’s future, MIH Africa recently shut down a number of e-commerce sites to focus on the general e-tail businesses such as Kalahari.
Our sources indicate that Naspers is set to shut down its MIH Africa operations and absorb and run Konga in Nigeria and Kalahari in South Africa- firms which are totally focused on e-commerce. Naspers will therefore exit from classifieds in Africa after tough experiments with Dealfish and Mocality.
The sources add that the new Naspers CEO Bob van Dijk is not a strong believer in early stage sub Saharan African markets and Naspers is set to focus on its global classifieds businesses in more mature markets where monetisation and profits are a more attractive opportunity.
According to Global Classifieds Intelligence group, AIM Group, Paladino was the CEO of e-commerce in Africa at Naspers subsidiary MIH Internet Africa since January 2012 and was responsible for South Africa’s Kalahari.com, Nigeria’s Konga.com and OLX and the recently closed SA-focused e-commerce start-ups Sacamera, 5rooms, Kinderelo and Style36.
His departure also raises questions on the future of OLX.
Our sources allege that OLX has been given one more year to prove itself in Africa, but in the total absence of any business model other than pay per click the firm will hardly succeed given Africa’s immature pay per click market with even Google turning away its focus from continent but only pushing last mile connectivity.
Naspers/MIH Africa’s classified’s exit will give One Africa Media a market leading position in Africa with its Cheki Africa, Jobberman in West Africa, BrghterMonday in East Africa and PrivateProperty and SafariNow. Most of these One Africa Media companies have monetised, some have broken even, and are focused on operational execution.
Ringier and Schibsted, also working at a similar model with their PigiaMe in Kenya and Kiramu in Nigeria and Schibsted’s Tradestable plus top forums such as Nairaland will take on OLX. Naspers/MIH Africa exit from the African classified’s market will give them chance to double down on e-commerce, and the media giant is already hiring massively for its Africa e-commerce operations to plant Konga or Kalahari style sites across the continent. Though given one year to proof itself, OLX largely coming out of Argentina, might still be around as most of its major decisions are not made in South Africa, but it’s so possible to see OLX Africa firing massively in the coming months as it tries out new business models to help itself monetise.
OLX’s challenge is mostly an African problem as OLX Argentina makes $25m revenue from CPC and display advertising.
In Africa, however, there is low internet penetration and low CPC rates, maybe even ten times lower, making the African market too early for CPC. Africa also has few spenders on CPC making the digital advertising marketplace so infant and the curse making OLX Africa’s business model highly unsustainable. Then forget fraud and competition from private curated Facebook marketplaces such as Nairobi Expat Marketplace, Kilimani Mums, ArushaRusha and hundreds of others where people buy from people they know.
Then other players like Locanto and Craiglist with zero operational budgets in Africa are also here to stay.
Naspers CEO of pay-TV segment, Eben Greyling has also stepped down after more than 18 years working with the firm.
UPDATE: An insider source claims the MIH subsidiary will be closed but the classifieds businesses might stay put. TechMoran is still waiting for response from Naspers on the matter and will update soon. For those with more info you can leave an anonymous comment or drop us a line at [email protected]