Victor Moghalu is the CEO&Co-Founder of Kobobid.com, a tech-heavy company. In this interview, he speaks on how the platform will boost Nigeria’s economy.
What is a penny auction and how does it differ from regular auctions?
A Penny Auction also referred to as pay-to-bid auctions is a type of online auction where you pay to bid and bid on items with the purchased bids. Unlike typical auctions where the highest bidder wins and is the only one who pays for the item, all participants in a penny auction pay to bid. Typically, there’s no specific end time for a penny auction, the auction goes as long as there is continued interest in winning the item. The auction timer resets every time a new bid is placed and counts down to zero. If no new bid comes in before the clock hits 00:00, the last bidder wins. In penny auctions, the price of the item increases by 1 penny, or 1 cent or 1 kobo, depending on the country where it’s being operated. This is why we also refer to Kobobid as a kobo auction interchangeably.
Why is Kobobid?
The name is coined from the fact that on our platform, the item price increases by one kobo for every bid placed, instead of one penny or one cent. Kobobid came up first as the concept, then it just stuck as the preferred name. And here we are.
What business vertical does it sit under? Is it gaming or e-commerce?
We are a bit of a few things. Kobobid is part shopping and e-commerce, part gaming, and also a part chance since some bidders win and some lose.
How did you get into the business of penny auctions?
It goes back several years while I was working in the United States. I was looking for good discounts on home appliances for my new apartment when I stumbled upon a penny auction site. I researched further and discovered several others. Let’s just say I mastered the thing, and with luck on my side, I furnished my apartment for way less than you can imagine. Fast forward a few years later, I visited Nigeria and was amazed to see how e-commerce, online betting and lottery had exploded. It hit my co-founder and I that these behaviours sit right well with penny auctions, and the ideas just started rolling in.
You could have either set up a betting company or an e-commerce company, why penny auction?
I do have an interest in both worlds, but penny auctions present an opportunity to explore both in tandem. More importantly, though, the economic situation in this country is designed in a way that deprives a lot of people of acquiring the things that they truly desire. When your main focus is surviving and taking care of your basic needs and your loved ones, there are some nice-to-haves or luxuries that you can’t even begin to wrap your head or your finances around, because they might feel completely out of reach. I will give you a couple of examples. We have had winners on our platform pay N20,207.22 for an iPhone 12, and N34,004.96 for a Samsung Galaxy S20. You’d be hard-pressed to find such heavily discounted prices anywhere else in the country. Sometimes, I pick up the phone myself to place calls to our winners that are typically handled by our customer service team. The joy I’ve heard first-hand that these wins have brought to people is immeasurable. It is what I always envisioned, and to see it come to fruition is exciting, to say the least.
How long has Kobobid been in business and how big is your operation?
Product ideation and development started in 2017, with lots of lessons learnt along the way, but we can save that story for another day. That is a whole interview on its own. We officially launched it in February this year and we are already at over 60,000 active users and have over a thousand auctions concluded. All thanks to the hard work of our growing team spread out across the globe. Our central hub is here in Maryland, Lagos.
How familiar do you think Nigerians are with penny auctions?
Not very, if at all, and that is what makes it very exciting. I am intrigued by any business model that causes a fundamental shift in consumer behavior and Kobobid presents the perfect opportunity to do so. The most frequent questions we get across all our online channels are “How does this work?” and “How do I bid?” When we debuted in February our social team was fielding all of those questions, but already we are noticing existing users chiming in and educating the newbies. Nigerians are fast learners. So it is only a matter of time until the masses are educated on the topic to various degrees.
Who are your major competitors?
Directly, I think we have sites like Bet9ja, Betway, BetKing, Jumia, Konga and Luckymall, and so on. We are looking beyond similar auction platforms and are aiming to compete for a share of wallet and attention with the e-commerce and sports betting companies.
Do you see more players joining this industry?
Absolutely, every successful new business gives birth to an industry, and we are happy to blaze this trail. If we get this right, we would naturally be setting ourselves up for proper competition. And that is where the real fun begins because it will only push us to do better
What has been your most exciting moment since launching Kobobid?
There have been many exciting moments, but if I had to pick one, it would have to be going out on a delivery run with our logistics team to deliver an iPhone12 Pro Max to one of our early winners. She won a phone worth almost N800,000 for less than N4,000 just a day to her birthday, which also happened to be on Valentine’s Day. So, it was both a Birthday and Valentine’s gift for her. In the photos we have of her, she’s almost literally levitating out of excitement. She just couldn’t believe that we actually delivered on our promise, and that it wasn’t “too good to be true.” I felt so happy for her and it validated our mission with Kobobid – to give Nigerians access to AUTHENTIC items at hugely discounted prices, with top-notch customer service to boot. We believe that the fine or finer things in life should not be reserved for the “Haves” in society alone or those who reside abroad. Nigerians living in Nigeria deserve access to the same and more.
What is your background and how has it helped in running this business?
I come from a military family. My father was in the military, so was my brother and then myself. I attended Nigerian Military School, Zaria for high school, and then went on to the Nigerian Defence Academy, but left in my final year when I was diagnosed with Hodgkin’s Lymphoma. I have been in remission for a couple of decades now. After my treatments, I finished up at the University of Lagos with a BA in History and Strategic Studies then immediately moved to the US where I worked my way to the top in the Hospitality Industry — managing world-class residential and commercial properties such as the Ritz-Carlton New York, Central Park – the #1 Ritz-Carlton in the world. Then I started to get an itch to try something different. So, I took a leap of faith and left a field I’d excelled in and grown accustomed to and joined something more unfamiliar — a tech startup that was fusing tech, e-commerce and hospitality together to fill a significant gap in the industry. They say everything happens for a reason, right? Well, during that time the idea to bring penny auctions to Nigeria was born, and sure enough, I gathered enough experience to fuse together for what is now Kobobid — a tech-heavy company.
Growing up in the military from such a young age has really given me the metal to go through life and any challenges it throws my way with confidence. Starting up your own business is never an easy feat, and even more so a venture of this magnitude. I couldn’t have gotten here without that mental fortitude. My experience in the hospitality industry helped shape my appreciation of service and lack there of in Nigeria, something I knew from the very beginning that I wanted us to get right. Managing multiple properties and hotels at the highest levels with a large workforce also helped me understand the importance of building a strong team around you, which I’ve now done here at home and abroad.
What does the future hold for the gaming industry in Nigeria?
It’s a promising one. The gaming industry is a massive GDP contributor through employment opportunities, licensing fees and remittances, so it will continue to expand as more players enter the arena with varying iterations and ideas. If you look at the various auction sites in Nigeria, they all have slightly different models. Some will work, some will not, but it will continue to evolve. Same as in betting and lottery, new players, both local and international will continue to emerge and woo customers with better platforms, better user experience and better customer service.
Finally, what do you have to say to someone who has never been on Kobobid?
We’re not too good to be true! There’s something for everyone on Kobobid, as long as you’re above 18. So, come check us out, get inspired by our past winners, learn more about how Kobobid works, bid, win something for yourself or your loved one, then please share your joy with others. But most importantly, don’t get carried away – bid responsibly.