Op-Pieces

As Konga sues Rocket Internet – Is this really David Vs Goliath?

“….When David got to the camp of the Israelites and heard the chants being made by Goliath against the Children of Israel, he became angry, angry at not just Goliath that was making these chants, but also at the Children of Israel for allowing him make those chants. (I Sam 17)”

Sim Shagaya, CEO and Founder of Konga said:

Africa is an open place. It’s unfair that Rocket Internet comes to Africa and buy@ShopKonga‘s domain names. This hurts African innovation

When Nigerian born, Harvard educated CEO of Konga.com, Sim Shagaya made the tweet above, he sounded like someone who was not only mad at Rocket Internet, the Goliath in this story , but also at Africans/Nigerians who have created this “open place” where a company based in Berlin can effectively come and play Godfather.

 
SEE ALSO: Iyin Aboyeji: Ecosystems are more powerful than empires
 

His tweets were followed by different articles on Techcabal, Techmoran, Ventures Africa about Konga deciding to “sue” Rocket Internet over this domain name squatting.

50′ So David triumphed over the Philistine with a sling and a stone; without a sword in his hand he struck down the Philistine and killed him.

51′ David ran and stood over him. He took hold of the Philistine’s sword and drew it from the sheath. After he killed him, he cut off his head with the sword.

 

Let us have a background on these two companies

 

Goliath: Who is Rocket Internet GMBH?

Different names have been used to describe the mammoth “corporation” from clones factory to blitzkriegs, etc, but according to Wikipedia;

Rocket Internet GmbH is a German online startup incubator founded in Berlin in 2007 by the Samwer brothers. The company’s business model is to identify successful internet ventures from other countries (often the United States) and replicate them in predominantly emerging markets. They have raised more over $1.5 billion dollars from Russian billionaire Leonard Blavatnik, Swedish investment firm Kinnevik, J.P. Morgan and other partners.

Rocket Internet has started and invested in several clones across different verticals from ecommerce to hotels classifieds, payments, etc.

Their business model involves entering a market with large sums of money, immediately creating a major barrier to entry and suffocating existing firms within that market.

They have created Jumia in several African countries, with their Nigerian version, Jumia Nigeria playing second fiddle to Sim Shagaya’s Konga.com. 

 

David: Who is Konga.com?

Konga.com is Nigeria’s Largest Online Mall.

Due to the nature of the Nigerian economy/ region, Konga can be described as many things, from a retail and logistics company that is changing the way Nigerians do retail to a b2C type company to even a B2B type company, with a soft launch of their marketplace which will be a great source of economic empowerment to Nigerians as a whole.

According to Crunchbase, Konga has raised about $35 Million dollars from Investors that include Swedish investment firm Kinnevik and media giants Naspers. 

 

The first Punch

Arnt Jeschke, a Managing director and head of Finance/Administration for Rocket Internet Berlin, in July 2012 in what can be interpreted as a preemptive strike to contain a business threat ( a few weeks before the launch of Konga.com) registered 10 Konga domain names across Africa(: Cote D’ivoire – Konga.cd, Cameroun – Konga.cm, Libya – Konga.ly, Mauritius – Konga.mu, Morocco – Konga.ma, Malawi – Konga.mw, Konga.sc – Seychelles, Konga.sh – Saint Helena, Kenya – Konga.co.ke, South Africa – Konga.co.za.)

 

Did Rocket Internet’s Arnt Jeschke Work Alone? Did he act rationally?

When Goliath made the loud chants, calling out the Children of Israel to come out and fight him if they dared, did he work alone?

In the bible story, the Philistine troops stood a safe distance away from Goliath while he made the chant at the Children of Israel.

My answer to this question is à NO. Arnt Jeschke did not work alone, but had the full backing of Olivier Samwer and the rest of the Rocket team who are known for their ruthlessness and decided to bring the ruthlessness to the African soil.

 

Why did Rocket really register those Domain Names? Any Plans to use them?

Using the domain names would be a total joke! Waving them as a carrot to Sim Shagaya and his team is even funnier than the first.

My thoughts are that along the line, Rocket Internet didn’t really think the domain names would matter in the long run, with plans already hatching in their heads of a potential “merger” and of Sim Shagaya taking over their ecommerce operations.

 

Sim Shagaya: Xenophobia vs. Protectionism

Xenophobia is not the answer, full on protectionism is not the answer either.

In the ecommerce ecosystem, the importance of investors that understand longevity and patience is very important with the level of infrastructure and logistics that have to be put into ecommerce in Nigeria.

There is a need for local players to also arise and play in this field.

Is there a guarantee that with the death of Rocket another Goliath will not arise?

 
SEE ALSO: Xenophobia vs. Protectionism – How should local Nigerian startups compete with ‘foreigners’?
 

 

Why is Konga really suing?

My guess is that this case is really not about the domain names, and Sim Shagaya confirmed that in his comment about the lawsuit ““We are moving into a world of realtime app-enabled native services where URLs will become increasingly irrelevant”, he says. “But we’d like to have them back, nonetheless”.

This lawsuit is more about the future of the Nigerian tech/business ecosystem and exposing Rocket Internet for the shady company they really are. With the exit of their poster boy CEOs and the installation of their real German CEO, the grand scheme of the Berlin based company is beginning to unfold in the Nigerian ecommerce space.

 

Will this David Defeat Goliath?

Ultimately, Rocket may fail in Nigeria, with their highhanded and bad business model, but I think most Nigerian entrepreneurs may want them to fail faster.

 
[Image Credit: Google Images ]

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A Young Nigerian with a passion for Technology, saying it how I feel it.

3 Comments

  1. I don't see anything wrong with what Rocket Internet has done, they are both birds of the same feathers, not sure why Sim is complaining and threatening to sue. Silly boys!

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