YuuZoo signs deal to run SME e-commerce platform in Nigeria

Singapore

MAINBOARD-listed social e-commerce network YuuZoo has signed an agreement with Etisalat, an Abu Dhabi-based telecommunications group that operates in Africa and the Middle East, for the launch of a new e-commerce platform in Nigeria.

The platform - known as SME Arena - will allow SMEs (small and medium enterprises) in Nigeria to market and sell their products and services to mobile and online consumers from Nigeria's nearly 180 million population, starting with Etisalat's over 24 million Nigerian subscribers.

Alongside the signing of the new agreement, YuuZoo has bought over all contract rights for Etisalat from its franchisee, which had in November 2014 signed an agreement with Etisalat to launch the e-commerce platform. To do that, YuuZoo will issue shares worth some US$1.96 million to the franchisee's owner.

YuuZoo co-founder and chairman Thomas Zilliacus told The Business Times: "The franchisee is based in the UK; Nigeria is outside of its territory. This goes against YuuZoo's global growth model of appointing franchisees or local partners in a new market to run platforms in that market."

Mr Zilliacus shared that the UK-based franchisee had through its own networks managed to establish contact and seal a deal with Etisalat in November of 2014. He said: "The franchisee should focus only on the UK."

YuuZoo's buyout of its franchi-see's contract rights with Etisalat is also in line with its strategy of dealing directly - not through franchisees - with "powerful" media and telecommunication partners.

Mr Zilliacus said: "Nigeria is one of the world's 10 most populous markets. Nigeria is also the largest market in Africa, the fastest-growing continent for mobile services." Moreover, YuuZoo has a Nigeria office, through which it can competently manage SME Arena, he said. Its other offices are in Singapore, Thailand and China.

YuuZoo will continue to appoint franchisees for markets not among the world's most populous. The company, which runs platforms that combine social networking, e-commerce and gaming, grows its international business through a network of franchisees and partners. YuuZoo's network currently covers 68 countries.

Mr Zilliacus added that the new agreement with Etisalat marks new revenue for YuuZoo. Previously, YuuZoo and the franchisee observed a 30-70 revenue share agreement for the e-commerce platform in Nigeria. He said: "Now we take 100 per cent."

Revenue from this is likely to come in in FY2016, BT has learnt.

The YuuZoo co-founder said that the new agreement also opens opportunities for potential expansion to the 18 other markets in Africa and the Middle East, where Etisalat operates. He noted: "SME Arena is a blueprint that can be modified and offered to telcos around the world."

Last week, YuuZoo said that it has teamed up with SportsHero, a real-time fantasy sports and social prediction app, to bring SportsHero to YuuZoo's network of over 118 smillion consumers. Users on SportsHero can follow top players on the app, who can in turn charge other players a subscription fee (of up to US$100 per month) to receive from them real-time sports tips and predictions. Revenue from this will be split equally between SportsHero and YuuZoo.

On Wednesday, YuuZoo shares slipped 0.4 Singapore cent to close at S$0.172.