After seeing a business opportunity to capitalise on his country's love of consuming alcohol at special events entrepreneur Lanre Akinlagun decided to launch an online drinks service, Drinks.ng.
ITWeb Africa assistant editor Simnikiwe Mzekandaba spoke to Akinlagun about the ups and downs of getting his business off the ground.
SIMNIKIWE MZEKANDABA: How would you describe the service that www.drinks.ng provides?
LANRE AKINLAGUN: Drinks.ng is currently the largest online destination of inventory for drinks housed under one roof [or website in this case] across the whole of Nigeria. We are also the first online pure drinks supply and distribution company in West Africa.
SIMNIKIWE MZEKANDABA: When was website launched?
LANRE AKINLAGUN: I’d been thinking about the drinks market and the potential it has in Nigeria for quite some time, and I’d put about a year’s worth of thought and research into it before I actually went ahead and started the company. The website itself launched in March 2013, after much deliberation of its structure and direction, and we’re happy with the results. The site is easy to navigate and people seem to like the look, feel and usability of it, so we are happy with the results.
SIMNIKIWE MZEKANDABA: And what was the motivation behind the launch of this site?
LANRE AKINLAGUN: The original idea came about last year when I visited Lagos on a business trip from London and I was amazed at the large consumption levels of alcohol at the clubs and weddings; champagne just kept flowing like cheap wine. Weddings are a huge affair in Nigeria, it’s said weddings are the new clubs and I am yet to see a single weekend go by without at least 5 wedding invites.
I have often sent money home in order to help support a family member’s occasion by taking care of the drinks. I have also had the chance to be involved in organising a party; the difficulty at getting drinks for the right price was one of the most difficult tasks.
SIMNIKIWE MZEKANDABA: How many people were/are involved in launching?
LANRE AKINLAGUN: I have a number of key advisers and business partners who support me with the business structure and idea sharing.
SIMNIKIWE MZEKANDABA: How big is the team now?
LANRE AKINLAGUN: Initially we started out with a few sales people and in-house support, but we have massively outgrown that team since the launch as the orders are now coming in quite fast, which means we are now looking to add to the team.
SIMNIKIWE MZEKANDABA: What was the starting process like did you experience any hurdles along the way?
LANRE AKINLAGUN: Like every business in a relatively unstructured market, you are presented with challenges weekly, if not daily. Meeting the right vendors, speaking to the right people and actually getting meetings with them in a timely manner was a big issue.
Learning the trade and understanding how the market itself works has also been difficult as this is an extremely lucrative market and in a country like Nigeria, often it is tough being the new-comer. That being said, no-one is looking to break the online drinks market in the same fashion as us, so by being first to market, we have the competitive edge for now.
Believe it or not I have once been told forget my idea because this is a mafia type business and no one will let me disrupt business as it is they obviously have no idea of quite how much self-determination I have.
SIMNIKIWE MZEKANDABA: And what about the response, how has it been?
LANRE AKINLAGUN: So far, it has been really great. Our focus right now has mainly been on B2B, which is growing rapidly, our service offering has been delivered in a professional and structured manner so the response has been positive. Regarding the B2C market, we haven’t really turned on the marketing button yet, that’s for the next phase in our business strategy, but I have a feeling that once word of mouth gets through from the B2B crowd, we will see our order levels rise considerably.
In the meantime we have partners with Nigeria’s e-commerce giants, Konga and Jumia, to distribute our products and right now we have the largest inventory stock on Konga’s online market stall for the beverage companies.
SIMNIKIWE MZEKANDABA: Can you give me some figures of how many people have started using the website since it has been launched?
LANRE AKINLAGUN: We can’t be specific about numbers as it’s still very early days, but month-on-month, we have seen growth since launch, we have a couple of ideas up our sleeves to increase that traffic but right now we want to focus on solving the logistic issues, of which there are many.
SIMNIKIWE MZEKANDABA: Do you only distribute goods to people in Nigeria?
LANRE AKINLAGUN: At present we are only focused on Lagos, Nigeria as the scale of the task at hand is immense and we need to see out this task before concentrating on greater pastures, but we do have plans to one day distribute across West Africa at least.
SIMNIKIWE MZEKANDABA: What products/brands are available for purchase?
LANRE AKINLAGUN: Drinks.ng literally sells everything from a wide variety of champagnes, spirits, beers, juices and even water. We also pride ourselves in having the largest selection of wines to choose from. Consumption of red wine in particular is growing in Nigeria and we want to be at the forefront of the supply chain that brings the best quality wines directly to the consumers.
SIMNIKIWE MZEKANDABA: And how are payments made?
LANRE AKINLAGUN: We offer the three main common forms of payment within our market: online card transactions, bank transfers and payment on delivery, right now the most common form of payment is payment on delivery.
SIMNIKIWE MZEKANDABA: Can customers also access the website from their phones or is it online based only?
LANRE AKINLAGUN: We are accessible from all platforms and devices but we can also be reachable for orders via email and by phone.
SIMNIKIWE MZEKANDABA: In terms of competition what is like in this industry?
LANRE AKINLAGUN: Celebrations are a big part of our culture so the supply and distribution have a lot of players involved. However, the main source of competition that we see as our main challenge would be oki – orin market in the main Lagos island district. This hub of congested sellers virtually controls the flow and distribution of the beverage market. That’s where everyone goes for the best prices and variety of produce.
I feel as long as we can match them on price, our organisation, convenience of service, guaranteed originality of product and transparency of price, we stand a good chance of taking a significant control of the market. Furthermore people are very busy and the internet is becoming more and more popular to help save time when facilitating offline activity. By this, I mean that the internet saves people time having to travel to see various traders they can order online and have their drinks delivered directly to them much easier than going to a market.
SIMNIKIWE MZEKANDABA: And how is your website setting itself apart from the rest?
LANRE AKINLAGUN: Right now we are actually the only people purely focused on the beverage industry so there really isn’t anyone else. Right now it’s focused on inventory but we have a few other things in the pipeline - we are always thinking two steps ahead.
SIMNIKIWE MZEKANDABA: How would you like to expand your business further?
LANRE AKINLAGUN: The beverage industry has a lot of its own challenges and there is a lot to fix so right now we are purely focused on fixing those before we think of other things.
SIMNIKIWE MZEKANDABA: How is the e-commerce space in Nigeria?
LANRE AKINLAGUN: The tech scene as a whole is currently going through an exciting time with tech startups popping up in virtually every industry. Consumers are still largely either unaware or lack the level of trust to engage with the online sites but with the enormous marketing and advertising budgets being spent by the likes of Konga and Jumia, they are helping to create a large level of trust with the consumers for the industry.
SIMNIKIWE MZEKANDABA: How important is the technology startup industry in Africa?
LANRE AKINLAGUN: There is a lot of dysfunctionality in Nigeria and the infrastructure is largely non existent, so the internet companies are having to build their own. This is an expensive procedure but it’s helping to develop the country and largely improve the quality of life for the citizens by allowing them to purchase their desired products more easily.
This is common placed in the West; we just need to bring the same quality of life to Africa.
SIMNIKIWE MZEKANDABA: Do you think more entrepreneurs should look at various technology platforms to develop their own start-ups?
LANRE AKINLAGUN: Right now the focus should be on just getting started with what’s available to you and fixing the current situations, which need attention. It also depends on how much money is available to you as technology platforms are not cheap so the option pool is really down to preference and availability. Tech requires investment and this is difficult to secure in Nigeria, where banks are not known for providing loans at favourable rates. I was lucky enough to get investment from Spark and this certainly helped me build my business the way I wanted to.
Entrepreneurs should look to tech platforms to help their own businesses. Why? Because tech and the internet are the future and startups can’t just think of today, they have to think long-term as well, if they truly want to build a sustainable and profitable business.
SIMNIKIWE MZEKANDABA: Would you encourage someone to get involved in establishing a technology start-up?
LANRE AKINLAGUN: I would encourage anyone to follow their dreams, and if starting a tech startup is that dream then go for it. There is a lot to fix in Nigeria, which leaves a lot of opportunity for others; all newcomers are welcome as the tech scene is very supportive to others. The likes of Pagatech make topping up my staff’s phones and mine easier.
Hotels.ng has changed the way I feel about looking and booking hotels for friends coming into the country and there are a whole host of other services that are needed. But it is still a nascent sector and it isn’t easy to ‘crack’, so I would only advise people to come consider setting up a business in this sector if they have a real understanding of and passion for tech.
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