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OLX Kenya, Nigeria closure to impact market

OLX Kenya, Nigeria closure to impact market

Online marketplace OLX has closed its offices in Kenya and Nigeria as part of a global restructuring plan.

Confirming the development, CEO of OLX in Asia, Middle East and Africa (AMEA), Sjoerd Nikkelen, said "We made a difficult but important decision in Nigeria to consolidate our operations between some of our offices internationally.

OLX Nigeria had been in operation since 2012 but battled, and in 2016 rolled out revenue building services.

The company has effectively withdrawn its presence, although the platform remains in operation and will continue to be managed from South Africa.

In Kenya, OLX has approximately 30 employees who are likely to receive letters terminating their appointments next month.

However, it is local farmers who are expected to be hardest hit. Since 2016 they have continued to purchase agricultural inputs at 15% discount via Kilimo Smart OLX centres.

OLX's interim report for 6-month period ending September 31 2017 showed the company was doing well.

"Trading losses declined in several ecommerce units including classifieds and payments. The group's profitable e-commerce businesses delivered US$465m in revenues and US$170m in trading profits, growing these metrics by 50% (36%) and 55% (52%) respectively," the Group stated.

But industry experts are not surprised by the move and say Naspers regularly reviews its various portfolios.

ITWeb Africa recently reported the company had divested from Konga.com, a Nigerian e-commerce company acquired by ICT conglomerate Zinox Group.

It had previously shut down Mocality Nigeria and Kenya in 2013, and WeChat in 2016.

Naspers' other portfolios Tencent, Mail.ru, and Flipkart are performing well.

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