Online classified ads company OLX has closed its Kenya and Nigeria offices in a restructuring plan meant to cut operation costs amid stiff competition.
Speaking to the Star on the phone, OLX country manager Peter Ndiang’ui confirmed the global online market place has shutdown the Kenyan and Nigerian office, but failed to indicate where it will operate from. “We made a difficult, but important decision in Kenya and Nigeria to consolidate our operations between some of our offices internationally. Our marketplace will continue to operate in Kenya and Nigeria - uninterrupted - as it has since 2010. We remain committed to the millions of Kenyans who use our platform to buy and sell every month. We continue to be focussed on constantly innovating to make sure OLX remains the top classifieds platform Kenya,” he said.
South africa focus
Sources revealed employees were formally informed on Tuesday, with a notice of termination to staff beginning in March, followed by the management team in April. The company is now expected to put its full focus on South Africa.
Although it is not clear how many staff have been affected by the decision to shutdown offices in the two countries, thousands of farmers in Kenya who have been buying inputs at 15 per cent discount via Kilimo Smart OLX centres launched in the country in late 2016 are among huge causalities of the closure
OLX had earlier introduced an agriculture section that allows farmers to sell livestock, especially chickens, cattle, and fresh produce.
Tough market
The online classified firm which entered Kenya in 2012 has been struggling to crack the online marketing space dominated by late arrivals like Jumia, Kilimal and recently launched Masoko, despite coming up with diversified products in various sectors including vehicles, agriculture, electronics and fashion.
OLX joins a long list of e-commerce businesses that have wound up business in Kenya and Nigeria in the past five years due to intense competition including Kalahari also owned by South African media giant Nasper.
Intense competition in the market, coupled by threats from social media platforms made Internet Africa Group rebrand its products to benefit from Jumia’s popularity in the market. Jovago rebanded into Jumia Travel while Hello Food turned to Jumia Food. Social media is also eating into the rich e-commerce market in Kenya estimated at Sh4.3 billion by Communication Authority in 2014.
