Nigeria’s Mofoluke Ayoola, who started RedViolet Company as a traditional interior design company, in 2010, is set to launch Furnisee, an IKEA-style DIY home furnishing solution in the UK.
Ayoola, who runs RedViolet Company in Nigeria and Ghana says her firm has over the years evolved and become an ecommerce company providing access to furniture and furnishing accessories despite the challenges.
In Nigeria and Ghana, Red Violet Company sells individual pieces, curated looks, takes orders for custom design services. Ayoola hopes that launching her new home furnishing startup in the UK market will greatly change the home furnishing sector in the market and meet the growing need for African-themed furniture and interior design solutions.
“We are creating an app for the UK market and not moving the RedViolet Company here,” said Ayoola who has been named among top five iconic women leading innovative companies in Nigeria. Ayoola saw the transition of her traditional interior design business into a DIY ecommerce company in the face of recession. She hopes her experiences during that time will help her unveil her new home furnishing app in the UK in the coming months.
Though many think entrepreneurship is an easy ride, Ayoola or Mo believes entrepreneurs are saddled with the responsibility of designing and creating solutions that meet the needs of their target audience.
The process is often filled with twists and turns, leading to sometimes, expected and also unexpected realities, if you are nurturing the idea of getting to the entrepreneurial world or have a startup idea, Mo has listed tips from her experience with various business ideas and her journey through her RedViolet Company.
TechMoran caught up with Mo as she’s fondly called and discussed the firm’s plans, her experiences so far and the journey ahead.
What inspired you to launch this business?
At the time I started, originally in 2007 under a different brand name, Debra’s Creations, there was a gap in the market at the time, interior design was strictly for the rich, the aim of the company was to curate affordable home furnishing solutions to the huge middle class market that was unattended to.
Before then, I worked a couple of years as an Accounting Information Technology Consultant and as an Accounts Manager, but the accounting career didn’t cut it for me. I wanted to do something that would constantly challenge me, secondly, my mum had a household store which may have pushed my interests toward small scale home furnishing solutions, as I had written a list of 9 things, I considered doing outside my budding accounting career.
Tell us more about yourself?
I am known as Foluke, Folu, Mo and to some Mofoluke, My name is Mofoluke Ayoola, I was born in Lagos to an average family, I have three sisters, and I am the first. We were raised traditional style, my dad and mum were both disciplinarians, both entrepreneurs even though my mum had an administrative career till her 50s, but she always had one or two businesses on the side while she maintained a day job. My dad was in the Advertising space, suffice to say I was raised amidst entrepreneurs. My early education was in Lagos and university in Ekiti State, I am from Ilesha in Osun, and I currently rounding up a masters in London. Let’s say I have a strong spiritual orientation, I am highly introverted, I love nature, I am the 80s and 90s music fan (Old skool). I keep a few close inner circle friends. I like my peace and I work hard at protecting it. I am pretty open-minded, despite being esoteric. I love to learn, I love the idea of travel (I need to do more though), good food and fine things, and I work hard to afford them, when I can. Intelligent conversations fascinate me, I am inclined to the sapiosexuality orientation.
What challenges have you faced so far in running your business? And how are you solving them?
Nothing unusual, I am sure anyone with a business, will share the same plight; even though it may be more amplified in Nigeria, for obvious reasons.
Poor economic climate (Solution in bullet points)
- We leverage technology to serve a more diverse market, as a result of a constantly degrading economy.
- Access to funds and high lending rates
We got creative in the types of funds we take, lending rates in Nigeria are not for small businesses, to be honest, I wonder who makes this much profit businesses need to make to be able to accommodate such ridiculously high interest rates. We got creative in the way we source funds, unfortunately even friends are family have a ridiculous expectation of the return rate they expect. The way I have approached this is self-funding, access to grands, and low interest rates opportunities, for example 5-10% over 5years, which is reasonable.
Human capital resources
- This is one that has hit me badly over the years and now, I think, we have come to terms with the fact that, it is part of the culture and the process, to be honest it impedes growth, when the quality of human power is relatively low and the employee turnover is low, then we consider how to fill the gap, constant training was a core to our strategy in RedViolet Company, but, that isn’t a guarantee employee will stay, in fact, I know from experience it makes them better fit for these organisations that would not have considered them beforehand. We invest in our people, we eventually proposed, the shift work patterns that let our people study while we actively supported their education, this improved our employee turnover rate.
- Low technology adoption
We made the move online in 2016, and we realised even our culture in Nigeria has impeded growth, this is because we really don’t like to read as a people. Most customers would put a call through before they place an order online.
- A typical customer assumes good customer service is agreeing to do what suits them always even when it doesn’t suit our service policy, changing this orientation and maintaining a good relationship is usually a challenge, we therefore put in place solutions and options even within our policies to encourage flexibility.
Insecurities
- Some of the issues we have encountered are insecurities within the space, we put in extra care when deliveries are being done, we recently halted the payment on delivery for this reason, we are careful to make sure our staff are not attacked for carrying cash, like the Jumia delivery case, since then, there have been many more cases reported. However, we constantly iterate our policies to accommodate both our team members safety and our customer’s interests.
High overhead costs
- The drop in crude oil prices in 2014, to 2015 had negative impact on the economy, in other to remain in business we developed the idea of moving our store online, this was in a bid to cut our high overhead costs and diversify our product offering and market reach. We successfully migrated the business in 2016, however, this came with a different kind of overhead cost, which is the cost of technical expertise. We initially paid high to get less done and we have had to refine most of our solution offerings overtime. But I will still maintain it is, however, still more economical to sell online, as most of our costs now centres around digital marketing and warehousing which is inevitable. The cost of cost of acquisition per customer is high within the domain space. But the advantages far outweigh the disadvantages.
- To survive in one sentence, keep your expenses in check, focus on what is pertinent to your next milestone, adopt agile methods, it will help you manage your solutions in more sustainable approach.
What are your various packages and how does each work?
Individual items can be purchased on our website (furniture pieces and home furnishing pieces). We also have RedViolet Company curated looks, in a product and section called “Shop-the-look”. Lastly we offer clients the opportunity to customise their looks by asking us for a tailored service.
What are your numbers in Nigeria and do you have any local or regional expansion plans?
Yes, we do have plans, we are currently overhauling and redesigning our model and offerings to customers, like I said earlier our aim is to user-centred approaches to develop solutions that meets the needs our users. Other plans we have include new market penetration. Currently, we are currently working on an application that helps DIY users with their styling project. This idea is however, targeted at the UK market, having analysed our market here in Africa, and concluding is not ready for such innovations and also considering the small addressable market size.
Who is your competition and how unique are you from them?
Generalist e-commerce companies they stock more general products but have furniture and accessories as one of their product line. A few brick and mortar furniture stores, international markets such as Wayfair and Amazon have African’s shopping from them and importing into Africa. One of our core advantages is leveraging our domain expertise in the furniture and styling space to offer tailored solutions to our customers, we offer free professional consultation services to our shoppers, this in turn equips them to make the right purchasing decisions.
How do you think you will take on your competitors who are said to have raised millions of dollars for expansion?
Customer centred approaches, while we continue to raise ours. We grew our customer base at the early start from referrals and word of mouth, today we are leveraging digital marketing, we still in the business of taking our customer’s pain away and offering them good value for their money’s worth. Others are we are also looking at other funding options at the moment and also to bring investors will we work on our next steps.
Have you raised any funds yet or are a firm believer in bootstrapping?
Definitely, I firmly believe in bootstrapping, that was the only way we could have gotten started, it is very effective in our domain space especially when we were only project oriented. However, I won’t fully say bootstrapping is the only way, it can be limiting at growth stage, it is important to weight other terms of funding before going for it. We are currently opening up to investors soon, but we aren’t early stage, we are scaling is the reason, so hopefully can agree on terms that makes us take the dive.
What future opportunities are you preparing yourself for as your competition launches new products?
We have a keen eye for customer oriented solutions more than our competitors at the moment and also where the market stands at the moment and where it is headed, we definitely will be adopt more frequent changes but our focus right now is the market as represented by our customers.
How do you acquire customers to your network?
Referrals, digital campaigns, exhibitions.
How do you do deliver and what have been your problems with the current mechanisms of delivery?
High cost of delivery, lack of insurance from some of our logistics partners, poor handling from most logistics partners, sometimes to minimise our risks, we manage some of our local logistics inhouse.
What do you think needs to be done to improve e-commerce and logistics in Africa?
I have an article that has addressed this, there is quite a lot of buyer’s scepticism within the space to the detriment of the growth of the sector which is why a typical buyer wants to pick up their phone to call customer service to get information clearly stated on these websites, before making a purchase, a couple of fixes;
- Open the borders across African countries, it doesn’t make sense at all, cost of shipping from the UK and China is less than cost of shipping across Nigeria and to other African countries. Our first order from Ghana didn’t sail as a result of this, it was a furniture set and the shipping cost was double the product cost.
- Creating a body that protects consumer’s right as much as the buyer right. If people knew they had an opportunity for rebate, there would be less trust issues.
- Logistics and insurance should be part and parcel of service delivery within the logistics space. Imagine paying so much to send an item and to find out something messed it up in transit, there is a loss regardless of who bears it, reliable insurance must be at the core of logistic solutions and it must be affordable.
- Return policies is a bit tricky, we’ve had customers say this is how it is done internationally. At RedViolet Company we understand having products back after a week or 2 with our customers wasn’t feasible, despite the fact that the solution works in some developed countries. We devised what we call scheduled deliveries, which allows our customers to make a decision as to keeping the item or returning it at the point of receiving it, protecting both the consumers and the buyer; and we at RedViolet Company promise a full refund of the cost of the product.
- Buyers MUST read, product descriptions, terms and conditions, this information could help you make decisions to patronise the buyer or not. If a customer isn’t comfortable with the company’s terms and conditions of service, it’s okay to not do business with them rather expect an organisation to change a policy, at RedViolet Company, we weight the interest of our customers as much as ours, and at every point in time, we review these policies when its pertinent . Lastly if an online company DOES NOT properly describe what they are selling to you, please move on.
Most tech start-ups have their IT headquarters in Europe due to a perceived limited IT talent in Africa. Is this true and what do you think needs to be done to address this skills gap problems on the continent?
You are absolutely correct; most tech start-ups are moving to Europe and the reasons are;
- Low technology adoption still hits us hard here
- The small addressable market size
- Lack of community support for tech start-ups and all start-up in general
- Brain drain currently being experience across Africa
I would say all these challenges still borders around socio-economic challenges ravaging Africa for decades, however, a good place to start to create more ecosystems within Africa, encourage digital talents to stay back and also improve support to start-ups.
I have witnessed first-hand fantastic support in the start-up space in Europe, even with immigrants.
Why are two wheelers so important to transport and ecommerce in Nigeria or across Africa?
- Gridlocks are ravaging most of the popular cities in Nigeria, road wheelers will assist in curbing the effect of gridlock on late deliveries, unfortunately only a fraction of our product line can be delivered with two wheelers. However, if the safety of two wheelers are guaranteed, this mode of transportation, it will definitely impact the ecommerce industry in cost and timeline.
What are your future plans say in two or three years?
I will summarise that in a single sentence not to give away too much too early;
- New market penetrations, possible change in business model and product offering.
What advice will you give anyone going into the start-up space in Africa now?
Do your market analysis, evaluate if your solution a good fit for the market. Involve your intended end-users early enough, engage in continuous learning. Consider having a mentor, make sure you have a support system, network, and remember the journey is not a walk in the park, whenever you feel alone, talk to like minded people, all entrepreneurs deal with these things. For me, there’s being a God factor, a fantastic family support, my team members, my mentors and customers that believed we could.