Silvertree Internet Holdings has taken over the operations of Nigeria’s daily deals site DealDey as Ringier refocuses on its forte, publishing, classifieds and marketing, TechMoran has learned.
DealDey, jointly acquired by Ringier AG and South African Silvertree Internet Holdings in March 2016, was launched in 2011 by serial entrepreneur Simdul Shagaya with funding from Investment AB Kinnevik.
At the time DealDey had over 1 million users, 15,000 active merchants and 20,000 verified listed businesses on acquisition.
Speaking to TechMoran, Kehinde Oriola, CEO DealDey said, “DealDey and our expansions Promohub and Lyf as well as their teams are all working incredibly hard on our mission to give all Nigerians good value for their money in online and offline-to-online retail. Specifically in tough times for Nigerians, we see our value proposition confirmed.”
Oriola added that the group’s focus on services – like hotels, spas, events, et al – has yielded good returns and the group has also made huge progress towards ultimate profitability.
“Considering the situation with the economy, we are aligning the business to ensure that we are properly positioned,” Oriola added.
DealDey’s most rapidly growing category has been services such as events, spas and hotels and the firm has a big focus on this as the economics are great and it fills a big need in the market and for its customers.
DealDey is also experiencing continued strength in household products, tech gadgets, and fashion.
On whether the partnership with Ringier Africa and Silvertree Internet Holdings has been successful, Oriola says DealDey learned a lot from both.
“The partnership with Ringier as a financial backer of our e-commerce group as well their expertise in large groups in marketing, publishing and marketplaces in Africa and Silvertree’s financial and hands-on support on the e-commerce leadership and operations side have been tremendously helpful,” he told TechMoran. “We are much further ahead because we’ve had both of them as partners.”
With the group and financing now on the right track, Ringier has come to an agreement with the operational partner, Silvertree, to sell its stake in the partnership to Silvertree. This has allowed for an exit for Ringier after a good set-up, as well as for a continued operation of the group by Silvertree in partnership with the DealDey/PromoHub/Lyf management.
“We are tremendously thankful to Ringier for the successful partnership and are excited for their exit to Silvertree,” Oriola said. “I am sure they can take their learnings and teachings on e-commerce in the deals group to more companies, for example through their P-Promos promotions scheme in their publishing group Pulse Africa. We will also continue to collaborate with Ringier entities on this after this exit.”
Though some people might be worried with the closure of Groupon SA
and the ‘bundling’ of Tisu in Ghana and Rupu in Kenya into Ppromos
Oriola says it is not right to say Africa is not ready for the daily deals business but one needs to adapt to the market as the founders of Groupon in South Africa went ahead to start daily deals site Hyperli.com
-just days after Groupon SA was shut down.
“There (referring to SA), the market is very ready for this model and Hyperli is also not the only business in the market – DaddysDeals is another that’s also doing well. In Ghana and Kenya the deals group has seen that the e-commerce market in general is still relatively early in its development -so online promotions via Ringier’s P Promos is the right model,” he said.
In Nigeria, the firm has made great progress with a broad services and discount product model with DealDey, and will continue to expand on it now.
According to Oriola, the creation of P Promos and integration of Rupu in Kenya and Tisu in Ghana was a joint decision by the management and shareholders, based on best capturing market opportunities.
The two were a perfect fit as Silvertree has a big strategic focus on e-commerce in Africa while Ringier is more and more in classifieds, publishing and marketing which it aims to focus on now.
With Ringier’s exit, Silvertree will form and run the deals group comprising of DealDey, PromoHub and Lyf 100 percent and will integrate them into its other e-commerce businesses in South Africa such as Cybercellar for wines, Faithful to Nature for organic products and CarZar for cars.
In addition, Silvertree’s comparison vertical brands such as Pricecheck in Nigeria will be valuable partner for DealDey.
Though there have been various ups and downs, Oriola says his biggest challenges running Nigeria’s top daily deals site was adapting the model for profitability while ensuring its customers continue to get great value – which it has now done.