Social commerce has taken the African commercial landscape by storm recently, offering an easy and accessible way for consumers to purchase goods and services through social media platforms. One company at the frontlines of this is Peppa. Peppa is a social commerce platform making buying and selling on social media safer through a payment app that helps facilitate the payment process.
The rise of social commerce has been substantial in the past few years. With a global projection of around US$2.9 trillion by 2026 and a predicted US$8 billion in 2022 in Africa and the Middle East, the reach of the e-commerce sub-genre only continues to expand. And for good reason: social commerce has disrupted the traditional retail routes, creating comfort, convenience and flexibility for its customers.
However, with this newfound convenience comes a responsibility to ensure the safety and security of all parties involved. According to a report by the Federal Trade Commission, More than 95,000 people reported about US$770 million in losses to fraud initiated on social media platforms in 2021, a jarring 18x increase from 2017.
To solve this problem and promote transparency within the social commerce landscape, CEO Bankole Alao and his co-founders Bridget Yadua (COO) and Emmanuel Obute (CTO) created Peppa. “The market is massive,” said Bankole Alao. “But when you think about the market, you need to think about all the opportunities being forfeited because people are afraid. People are worried that if they go and shop, their money is going to go missing. One in every two people that have tried social commerce has been a victim of shopping scams.”
Peppa is committed to meeting the challenge of security, and its efforts to promote safe and convenient social commerce routes will hopefully set a precedent for the industry moving forward. ‘Right now we describe ourselves as the safest way to buy on social media platforms in Africa,” said Bankole.
Peppa is one of the 12 startups chosen for the ARM Labs Lagos Techstars Accelerator, a Lagos-based program focused on building early-stage proptech and fintech startups across Africa. Bankole describes it as a validation of the work Peppa has been doing thus far.
What makes Peppa different?
Despite the mounting competition in the social commerce space, Peppa feels confident in its position as a payment and security-focused e-commerce solution. “We are not compelling you to use a store,” said Bankole. “Our real product is a safe payment method. Most Africans still buy on social media, and we aren’t trying to change that. We’re just looking to make it more secure.”
Indeed, social media commerce is a system that has proved stable in spite of its dangers. Peppa is working to mitigate these dangers while preserving the convenience that has made social commerce so popular. Most of the sales will still be carried out via social platforms. Peppa steps in the moment before the actual transaction takes place, helping to verify that both parties receive appropriate value from the process.
They do this by holding the buyer’s money in a secure location until confirmation that the item has been received. This provides the missing piece for African e-commerce: the protection of consumer interests. With more people purchasing online due to the Covid-19 pandemic, and growing public awareness about fraudulent transactions, it is only a matter of time before Peppa’s solution becomes an industry standard.
Peppa’s origins
Peppa’s story began with a loss: CEO Bankole Alao was scammed during an online purchase some years ago. Deciding to turn that loss into a gain, his idea for Peppa as a solutions provider took root and immediately began to sprout seeds.
“The anger and pain of losing so much money got me to the point where I started to wonder: do we give up, or do we look for a solution?” Said Bankole. “That’s really how our journey started.”
Launched in 2020, the startup began peculiarly as a distributor, rather than a service focused on consumer products. They had distribution deals in Nigeria with First Bank, which allowed the bank to market some products while they were in the background distributing.
Their pivot to focus more on consumer products is regarded by Bankole as a good omen–a sign that the company is doing great things. “We have been able to sign up over 1000 sellers,” he said. “In the coming weeks, we’ll be making more announcements and more partnerships.”
The platform currently has over 1200 social merchants registered, while more than 250k people use its products weekly.
The future of Peppa
Peppa’s profits come from transactional fees, which are percentages of purchases made via the platform. In addition, a series of services are currently being rolled out–one of them being a 2000 naira premium subscription model for sellers that provide them with extra benefits.
According to Bankole, Peppa is closely monitoring metrics to gauge its growth in the current year, with a focus on both consumers and sellers. “A successful 2023 for us would be having over 100k sellers on our platform, which is not too audacious,” he said. “We are also looking at four times the buyers–that’s four hundred thousand buyers. The easiest way to determine the buyers’ metrics is to look at the number of downloads.”
The opportunity Techstars has provided also allows the startup to scale and expand.
“We are becoming more focused on the buyers now,” said Bankole. “We have a product coming out to the public this February. We also have two banks in Nigeria ready to partner with us and use our in-app products.”
“As a company proper,” he added, “we will also be making announcements of our entering into Africa in the next four weeks, as it is already done.”
