Africa’s leading classified marketplace Jiji has acquired Cars45, Nigeria’s leading automotive trading platform.
In a conversation with TechCrunch, Vladimir Mnogoletniy, Jiji’s co-founder explained the thinking behind this move. It’s looking for opportunities outside of the classifieds business.
“In terms of classifieds, we’re looking at opportunities,” he explained, “but we are already a leader in Africa, so I think there’s very limited space for whom to acquire. However, we’re primarily interested in deals like Cars45, where we bring our leadership positions from classifieds and acquire very close business models that give us exposure to the transactional marketplace. So for us, a major interest will be to acquire adjacent business models.”
He also pointed out that vehicle listing is the second most popular category on Jiji behind real estate. The platform’s total listing is worth over $10 billion, with real estate ($7 billion) and vehicles ($3 billion) making up the bulk of it.
“We have leading positions in all markets we’re present in and are definitely the classifieds leader in the region. Also, we are probably the largest e-commerce company in Africa by GMV,” he continued.
Why it matters
This acquisition will enable Cars45 to grow the vehicles category. Cars45 will merge its operations in its three African markets – Nigeria, Ghana and Kenya, to increase efficiency. It will also give Jiji an upper hand in consolidating its position as the classifieds marketplace leader.
Over the years, Jiji has been plagued by trust and safety issues from users. The acquisition of Cars45 will help reduce this risk, as it offers a different car buying and selling experience via a transactional marketplace model.
Jiji will also leverage Cars45’s network of inspection centres where cars are inspected by more than 200 parameters. Unlike a classifieds marketplace where checks are inadequately carried out, transactional models employed by platforms like Cars45 ensure quality checks and detailed reports on a car’s condition with various databases.
For Cars45, it has come a long way from first being owned by Frontier Cars Group (FCG) and then was acquired by OLX Group and now Jiji. This poses questions around whether the integration with its new owner Jiji will work out fine.
With Jiji’s new disposition towards looking outside of its normal classified business to expand its operations, I wonder whether another acquisition is around the corner? Considering the platform’s top listing categories, It could be a real estate company or another vehicle trading platform.