A chat with Ugonna Ginigeme on pivoting from Vasiti to Feegor to power retail connectivity

Nigeria’s informal market plays a significant role in its economy, representing a substantial portion of commercial activities. In fact, roughly 65-70% of the country’s workforce operates within the informal sector, contributing approximately 40-60% of the nation’s GDP.

A major problem of the sector is the lack of a reliable value supply chain and credit system that helps to make the provision of the services rendered by players seamless and streamlined.

Noticing this trend, Ugonna Ginigeme and his co-founders pivoted their initial idea, Vasiti, a marketplace focused on helping student entrepreneurs connect to their customers efficiently and effectively, to Feegor, a rebranded marketplace for manufacturers, suppliers and retailers to interact for efficient, seamless, and streamlined delivery of goods and services.

Ugonna Ginigeme, the CEO of Feegor, details this transition:

“When Covid hit in 2020, it exposed a lot of limitations with the Vasiti model, and in 2021, we pivoted Vasiti from a marketplace focused on student entrepreneurs to a company building the digital infrastructure to seamlessly connect stakeholders across the retail value chain so they could transact amongst themselves in an efficient manner on Vasiti’s infrastructure.”

Feegor is an integrated marketplace for manufacturers (small-scale) and suppliers (across market regions) to have an online store and be discovered on demand.

The platform helps streamline the sourcing process for retailers. It offers a reliable, one-stop solution where they can not only discover and negotiate with manufacturers and suppliers but also access credit from Feegor’s Buy-Now-Pay-Later partners.

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Feegor’s unique approach

According to Ugonna, Feegor stands out in Nigeria’s eCommerce market thanks to its unique business strategy. The platform offers a one-stop shop for both formal and informal businesses, covering a variety of categories.

Unlike traditional distributors, the platform operates as an integrated marketplace, bridging the gap between manufacturers, suppliers and retailers. By streamlining negotiations, allowing bids for orders, and providing support to a wider range of suppliers, this strategy transforms the supply chain.

He says, “We empower negotiations, enabling suppliers to bid for orders, and support a broader spectrum of suppliers than traditional distributors.”

Describing how the startup ensures profitability, Ugonna says:

“We are a very asset-light business, so we don’t have to incur the heavy costs associated with physical assets. Our fulfilment costs, which are usually the highest for e-commerce businesses, are also negligible because we do not directly manage fulfilment but rather partner with 3PLs who manage this process end-to-end.”

“By facilitating transactions, we take an after-sales commission, and the high reorder rate ensures we have a high customer lifetime value, which contributes positively to our profitability. Apart from our commission model, our two other revenue models, which are the freemium and online ad models, have a meagre cost of revenue and will therefore greatly contribute to our profitability”, he adds.

Market acceptance

So far, Feegor has gained remarkable momentum. In less than three months since the commercial launch, the platform has enabled thousands of wholesale transactions, and over a thousand businesses have transacted using the platform.

This is a testimony to the platform’s early acceptance and potential. Currently operating in more than ten states, the founders prioritise strategic partnerships and expansions in order to reach nationwide coverage by the second half of 2024.

Ugonna explains these milestones:

In less than 3 months since we began commercial operations, we currently have over a thousand businesses transacting on Feegor, and we’ve successfully facilitated thousands of B2B wholesale transactions. 

Ugonna Ginigeme, CEO of Feegor

He asserts that sustainability is essential in a market as dynamic as Nigeria. And, given Feegor’s asset-light business model, scalability and profitability are guaranteed. The company, he claims, has learned from the scandals in the industry and is taking a risk-averse stance and market insights to get around obstacles.

The platform’s stability in a market with over 17 million SMEs is bolstered by its commitment to meeting its sourcing needs, even in the face of economic fluctuations.

“We have carefully designed our business model to ensure we are fully asset-light, so this gives us a more efficient cost structure that ensures we are profitable and scalable. We are also a lean, agile, and data-driven company that pays close attention to risk management and ensures our risks are always minimised.”

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Integrating AI into Feegor’s structure

This year can be best described as “AI year” as companies are increasingly using AI-powered solutions to improve customer experiences. Leading points of adoption include optimising personalised recommendations, effective search algorithms, and streamlined logistics while overcoming infrastructure obstacles and broadening their market reach.

For Ugonna, Feegor’s vision goes beyond merely facilitating transactions. According to him, there are plans to integrate AI and ML.

“There are plans to leverage technologies like AI and ML into our offerings. This would be used to create a tailored experience for each user, make product recommendations and demands, manage our in-app communication features, optimise vendor mapping and segmentation, and so on. Some other offerings we plan to introduce include access to credit through Buy-Now-Pay-Later and multiple payment options for both local and cross-border payments”, he explains.

Overcoming last-mile delivery challenges

Challenges like last-mile delivery and inflation pose industry-wide concerns in Nigeria.

Feegor navigates these challenges differently. The startup partnered with established third-party logistics companies to mitigate delivery risks, while the asset-light model shields against inflation’s adverse effects.

“Unlike most e-commerce companies, Feegor is neither a first-party seller nor a distributor of any kind. We are simply a marketplace that helps demand find supply in an easy and efficient manner”, Ugonna explains.

While inflation will generally affect the economy and business landscape, its effect on Feegor as a company will be minimal because we have no inventory, we do not sell any products directly, and we are dealing with businesses that must source goods despite the economic realities that may exist, he adds.

With a diverse and experienced team of co-founders and 20+ full-time staff, Feegor plans strategic team expansion, focusing on pivotal roles and strategic partnerships.

Ugonna is resolute about the company’s mission. With a steadfast vision, resilience, and an exceptional team, Feegor surges ahead, reshaping Africa’s retail landscape and redefining connectivity across its markets.