Jun 24 , 2023

One of the early pioneers of online markets, Qefira shut down its website a month ago following the full consolidation of the holding company ROAM by the Swiss media giant Ringier on December 2022.

The website steadily gained popularity over the past decade for connecting buyers and sellers with close to 400,000 monthly visitors. It showcased from electronics to property listings, with the company's revenues arising from advertisements as it did not provide communications and transactional modes.

The ownership structure of Qefira entails an intricate web of foreign companies managing and operating classifieds across Sub-Saharan countries since its early days in 2014. It is a branch in a corporate tree that extends to international bases.

Eskias Yilma is indicated as the founder and CEO by CrunchBase, which is an aggregator of online business data for 75 million users, while ROAM has been the prime mover behind the company.

ROAM came about following a 2017 merger between One Africa Media and Ringier Africa. It had 20 shareholders, including the Australia-based SEEK Ltd, which had a 31pc stake with two rounds of capital raises, amounting to 30 million dollars until it was consolidated by Ringier: a 190-year-old family-owned business has 140 companies across 18 countries and reported 1.1 billion dollars in revenue by the end of October 2022.

Johanna Walser, chief communications officer at Ringier, disclosed that discussions on the future strategic options about Qefira are ongoing despite declining to comment further.

"We're evaluating future strategic options for the platform and have decided to cease operations temporarily," she told Fortune.

Eskias, who is now cited as the CEO of HahuZon, another company providing similar services as Qefira, declined to comment on the development of this story.

A host of online businesses pop up over the past few years, with many being folded by the absence of seed money. Challenges related to payment, post-service care, delivery and consumer adoption have undermined the development of the sector. Officials disclosed that only one website was legally registered with an e-commerce license in the country a couple of months ago, leaving out the rest of the online markets uncategorised by the Ministry of Trade & Regional Integration.

Jirata Nemera, head of licensing and regulation at the Ministry, said a number of companies have been coming recently, increasing the number to 41 licenses.

He disclosed an online mechanism for issuing licenses has been set up by the Ministry where national identification is required for local companies while they look at the "articles of incorporation" for share companies affiliated with foreigners.

"We look at the propriety of their documents before issuing licenses," he told Fortune.

The 2021 report by Cephus Capital looked at 570 digital businesses in the country and was accurate in its prediction that Telebirr would emerge as one of the prominent disruptive forces in the sector. It forecasted a ninefold increment in the digital economy by 2025, accounting for 39pc of the nation's GDP based on rapid urbanization, growing internet penetration, improving networks, and better data affordability.

Industry insiders identify initial ownership structures as one of the primary reasons why many online businesses fold before reaching great heights in Ethiopia.

Nurhassen Mensur is a digital entrepreneur with stakes in Yenepay and an active participant in the burgeoning online sector. He observes most digital businesses in the country have foreign owners who use local individuals as pretexts with minority stakes which end up closing shop when the return on investment is not in line with their expectations.

"Repatriation of funds expected by the foreign owners usually can't be met," he told Fortune.

He emphasized that costs accrued in the expansion of market shares cannot be handled by local companies, forcing them to look for investment abroad. Nurhassen argues wide adoption of e-Commerce businesses needs competent staff backed by a state of the art of technology that can adapt to market changes while being focused on long-term growth.

"Referring to any online business which facilitates digital transactions 'an e-commerce business' is inaccurate," he said. "Qefira, for instance, had a classifieds business."

PUBLISHED ON Jun 24,2023 [ VOL 24 , NO 1208]

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