It’s often said that the question, ‘what if Google launches something similar?’, is the kind of thing that keeps entrepreneurs up at night. But if you’re a burgeoning e-commerce startup in an emerging market, the same could also be said of the Samwer brothers’ Rocket Internet. In the last few years, the German startup factory has ventured outside of its European roots to aggressively focus on emerging markets, such as Latin America, Asia, and Africa, to the chagrin of local players.
Today sees Rocket launch its first hotel booking site in Africa, via Africa Internet Holding, its Joint Venture with telecoms operator Millicom. Headquartered in and initially targeting customers in Nigeria, Jovago launches with an inventory of 140,000 bookable hotels online, but only lists 200 locally. That’s because each local hotel is vetted in person by the startup’s staff to ensure details are accurate and the quality of the hotel’s service and provision can be ensured, which also points to the specific market problem that Jovago is aiming to solve.
In the words of the company, the hotel-booking market in Nigeria is “unsorted”, and lacks a convenient way for travellers to book hotel accommodation online (though local player Hotels.ng might have something to say about that). Instead, the norm, says Jovago, is to use “time-consuming” booking agencies, or to simply book a hotel face-to-face at the point of arrival. Likewise, credit card penetration is lower in Africa, so, perhaps unsurprisingly, Jovago offers customers the option to choose between paying at the hotel or using the secure online payment option. Interestingly, it doesn’t pass on a booking fee to consumers, even though it does take commission on each transaction from the hotels it’s signed up to its platform, which is the standard agency model.
When questioned about Jovago’s competitive advantages over local players, Africa Internet Holding is talking up its online marketing experience. “Plus we visit personally every hotel listed on our website to ensure our customers about the quality of information about the hotels,” says Africa Internet Holding co-founder Jeremy Hodara. “Soon we’re gonna have the widest range of hotels available for booking in Africa thanks to our local sales teams.” To that end, Jovago says it currently has a head-count of about 50 people.
In contrast to the 200 or so local hotels available to book through Jovago, the current number one player in the country, Hotels.ng, lists over 4,000. Mark Essien, Chief Product Officer at Hotels.ng, tells me that’s out of almost 10,000 hotels that are in existence in Nigeria alone. “To get this inventory, we have 40 people across Nigeria visiting hotels and striking deals with the hotels,” he says. “It’s long, grueling work, and in some cases quite dangerous. It’s worth it though, because we have been able to outstrip all incumbents in terms of inventory and bookings.”
Essien says that in the last 4 months, Hotels.ng has locally outgrown international brands such as Expedia, and Bookings.com, along with local competitors Wakanow, and Nitestay. However, with rumours of Rocket’s imminent arrival, he’s already had to field questions on how the company plans to stand up to its new rival. “Rocket Internet have deep pockets and are good in executing in emerging markets,” he concedes, but argues that Hotels.ng can hold its own.
“We have quickly become the biggest Nigerian hotel booking site by rapid and efficient execution in a way that works for Africa,” says Essien. “We think we will out-execute Rocket in Nigeria and Africa. Moving this business online has to be done manually and via direct negotiation. This is a hard problem, but it’s in the hard problems that opportunity lie.”
Meanwhile, the hotel booking site is more evidence of Rocket Internet/Africa Internet Holding bedding down in Africa. Other properties in its African portfolio include Jumia (online retailer), Hellofood (online food delivery), Kaymu (online marketplace), and Vamido (real estate market place). Africa Internet Holding currently employs more than 1,500 staff through its incubated startups.
Finally, I’m told that, along with rapidly expanding the number of local hotels it lists, Jovago plans to also introduce bus ticket and flight ticket booking and car rentals.
via TechCrunch » Startups http://feedproxy.google.com/~r/techcrunch/startups/~3/97qd21pN9Dg/
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