Emmanuel Jacobs, co-founder of Shoptreo, a B2B startup that leverages technology to connect African fashion manufacturers to global retailers, offering credit solutions to these businesses and help with the delivery of bulky goods from the local manufacturing markets to the global retail market.
Shoptreo offers a seamless online platform for fashion producers, allowing them to present their items to a worldwide audience. A unique platform that bridges the gap between finance and quality for local businesses in Nigeria.
They provide not only financial solutions but also inventory management support, ensuring manufacturers can meet the demand for their high-quality goods. This dedication to empowering local producers is a driving force behind Emmanuel’s commitment to propelling the Nigerian economy forward.
Shoptreo’s impact extends beyond national borders. The platform is poised to become a key player in the broader African market, creating a global marketplace with a local heart.
Under Emmanuel and his co-founder, George Ute’s leadership, Shoptreo is set to revolutionize the African e-commerce landscape by offering a seamless online experience that benefits both producers and consumers.
Emmanuel Jacobs shared with Today Africa the story of Shoptreo, how it began, and where they are now.
Tell us a bit about yourself
My name is Emmanuel Jacobs. I happen to co-found Shoptreo, a B2B startup targeting African informal fashion distributors and manufacturers. The reason why we went into this market was because of our experience when growing up and also because the market is underserved.
A lot of people don’t really know much about the potential of informal fashion businesses in Africa. And most people don’t really know how big the fashion industry is in Africa, especially since we have the largest fashion manufacturing market in West Africa, which is in Aba.
So a lot of people don’t know that. And this is a sector we grew up in, challenges from our parents here and there. So along the line, we started to build more scalable solutions for distributors and merchants in this sector.
What’s your backstory like and how did you come about this business idea called Shoptreo?
Like I said earlier, it was a pinpoint for my parents especially and the parents of my co-founder. Growing up in Onitsha in a family of traders. If you grew up in Onitsha, you understand that most families are basically into trading.
So trading is what most families in Onitsha know how to do best. And that’s where they cater for their families and the other extended families. So I was fortunate to be born into this family. And the challenges that come with transportation to Aba and also getting access to credit.
Since the market is informal, it is very difficult to get access to credit, especially loans from banks. So scaling as a B2B distributor was not really that easy for people like us back then. The only option is to grow big. The people that benefit the most are B2B distributors. But for small scale distributors who are just starting the business or who don’t have enough funds to buy larger quantities and distribute.
It becomes a challenge for people like this to grow this business. We decided to change the game. The market has good potential, but you will get to understand that most people don’t even know about the Aba market. Most people wear Aba products, but they don’t know that they are Aba products.
Because people feel like everything is coming from China or ordered from abroad. But the thing is that about like 60 to 70% of what we get in the market today is actually produced in Aba. So We decided that it’s time people get to know how big this market is, the potential involved in this market. And not just how big, also, we also tried looking for ways to help distributors like my parents back then.
Distributors like them that are still going through the challenges, we also have to look for ways to help them scale. So that is how we came about the idea Shoptreo in 2021. It wasn’t really easy for us, getting the concept and trying to make things work out. Because most of our target audience are all informal distributors and manufacturers.
So that means they lack smartphones. Some of them don’t even have bank accounts. It was very difficult for us to get to those people and preach to them about how technology can change the way they operate their businesses. And also how they can get loans faster without too much collateral to grow their businesses. So that is how we came about Shoptreo.
What were the challenges that you guys faced in the beginning and how did you overcome it?
When we started, it wasn’t really that easy. Like in November, 2021 we tried capturing the markets because we needed to have more of the manufacturer database before we could sell the product itself. So what we did was that we started with B2C actually in 2021, we did B2C for a year and some months.
Basically the B2C was connecting manufacturers to consumers across the country. We scaled to Jos, Lagos, Anambra, Enugu, Abuja, and the other parts of the country. But we realized that B2C was not actually giving us what we wanted. People make sales but the margin was too small for us.
We are not getting enough profits that we are supposed to get. Along the line, we noticed it and we had to pivot to B2B. There were also challenges too. Since we are now bringing in distributors now to connect with the manufacturers instead of consumers, that was a bigger, tougher challenge for us. Because before we were kind of dealing with small scale manufacturers.
We had to see how we could expand the game. So we started going from union to union, trying to talk to them about accepting Shoptreo because in Aba, it’s like a union, you understand?
So it’s not like any other markets that you just go into and you start working. There are unions in charge of every manufacturing hub. So we have to talk to them, we have to make them see the reasons why they should use Shoptreo..
Along the line, we came to understand that introducing technology alone won’t scale. So what we had to do was to provide value. Because we figured out that the reason why people are not actually getting to listen to us is because we are not actually providing real value. What we did was that we had to compile a database of these manufacturers.
Then we moved from Aba and focused on the distributors market. First, we had to identify distributors’ markets that come to Aba to get their goods. Like in Kano, Onitsha, Lagos, Ibadan, Kaduna, and some other parts of the country. We had to identify Kano, Onitsha first. So we ventured into these places using the traditional method because that is what resonates with the people more.
In the distributor’s market, you can’t just go there and tell them to use your app. It’s not going to work out because they don’t know you. And before you, they have been doing business and have been successful at it.
What we did was to make them understand that going to Aba at some point will become expensive. Also, if you don’t go to Aba and you don’t have someone to monitor your goods you might end up getting what you didn’t order for. And this is not deliberate. It’s because of the inflow of orders that comes into Aba.
There’s no day you go to Aba, you won’t see manufacturers working. They are always busy. And I think that’s the thing that makes them not use any software because they’re not really free to download it. Some of them don’t even know the kind of apps to use or where to download them from. So you see the challenges?
It was very difficult for us. We had to provide value to them by going to these distributors’ markets, marketing Shoptreo products, then in turn they gave us money. I think it started with 10 people. Just like a referral program, they started telling their friends, and they also have a union too.
They encouraged them to work with us to get the product. And not just getting the product too, they will help you do quality assurance to make sure that you don’t have to stress yourself going to Aba or calling manufacturers. Sometimes when you call these manufacturers during daytime, they don’t pick you because they are always busy.
Those were the challenges we discovered and we had to leverage on it. So that was how we started from Kano, Onitsha. I think it was the middle of this year, 2024 that we expanded to Ibadan. Expanding to Ibadan, I think it was a game-changer for us because the inflow we had in Ibadan so far is not something to compare when we started the business.
There have been challenges and we’ve been crossing the road. Even till now we are still having some challenges in terms of cash flow problems. Because the majority of the transactions are still cash based.
Most of them still move cash around making it difficult for transactions to go through the banking system. We are also working on that. By next year we are introducing a new app that will help their transactions go through the banking system.
Can you describe the process of launching your business into the market?
The idea came in June, 2021. I hooked up my co-founder and we started planning. We did a lot of work for Shoptreo to become successful after lunch. I used to tell people, getting the idea is not enough. You have to conduct a survey.
So we had to go to this market, then we were in Lagos. We went to various markets, we studied them and we had some interactions with the manufacturers, to better understand their pain points. And to see how we can tailor Shoptreo to their needs. So we did that from June to November before we launched on November 22.
We had a series of travels from Lagos to Aba, to Enugu, to Anambra, Imo, and other states just to get a survey. And the reason why we had to make these travels was because for you to get these customers, you have to be with them physically.
So it’s not like other businesses that you can just get a questionnaire running and people just fill it up. In our own case we had to spend money because it’s not really an easy market for everyone. Because there are a lot of startups that came into the markets and because they didn’t have that relationship with the market unions and market leaders. They were not able to succeed.
So what we did first was developing relationships before we even launched. We started creating relationships with manufacturers, getting their contacts, calling them and seeing their improvements and stuff like that. That was how we started. We had to gain the trust of some of the manufacturers to be able to get easy access. So those are actually the manufacturers we started with.
We started with about 100 manufacturers in 2021. And these things we did ourselves. There was nothing like a fat pulse somewhere but because we worked in other companies before we were able to gather some savings and we were able to do this. As time moves on, we started scaling and now we have over 8,000 manufacturers on our database.
And this market has a potential of about 250,000 manufacturers. We’ve not even started. So having 8,000 is like cracking the surface. But we believe by next year, we are working on increasing our market share.
How did you guys raise the capital for your business?
My partner and I worked in some reputable organizations before and we were able to save up. And there’s also this saying that if your family members can invest in your startup at an early stage, that means you’re not doing the right thing. So we got support from our family members. I think that was the first capital we raised.
We raised about $20,000. I think the exchange rate was about N415 back then. We added it to our capital. That accounted for salary and some other expenses. But it couldn’t go far because of how difficult this market is and how we needed to be there.
Also the traveling and other stuff that had to be done before we launched. So it didn’t go far, but it helped us for the start and we were able to scale to a particular stage before funding.
What’s your business model and how does Shoptreo generate revenue?
Like the B2C model we used to operate on before we pivoted, you and I know in Nigeria because of infrastructure challenges, B2C businesses, especially commerce businesses are very difficult to scale.
It’s not that you won’t be making sales but your revenue will be shrinking because there are other things like logistics and logistics is very expensive in this part of Africa. There are other things where money gets into that at the end of the day, you see that things are not adding up.
So having a B2B platform has been really exciting for us. Like I told you earlier, it changed the game for us, honestly, because it brought us closer to our merchants. What we did was that we had to employ the services of ad-hoc marketers. These marketers are not really paid salaries.
They earn on commission based on the people they bring into the platform and they also collect what we call transportation fee at the end of the month. So that was the strategy we came into the market with that really helped us
Also it gives us the opportunity to learn from the manufacturers and the distributors. For instance, how do we know products that trend? We discussed with the distributors and they tell us these are the products that are trending, these are the products that people buy the most. Then we communicate that to our manufacturers.
There is so much information that we get because we are present in this market. It helps us grow faster. Because the more we communicate with our customers, the more changes we make to our platform and the more services we offer. So it really changed the game for us.
How we make money from them is through the commission that we charge, but we have to discontinue that commission as of last month because of economic challenges. It only makes sense that we bear with our merchants for now and see how we can revisit the commission based by next year.
Also we make money from logistics, not that much but we make something from logistics. And also retail – the bulk of the money comes from retail credits. What we do with our retail credit is we give them goods or credits. Giving them goods on credits has only given us the 99% assurance that we are going to get our money back.
Because these guys are business people. They sell to retailers who in turn sell to consumers. When you give them goods on credit, what they do is that they will sell these goods to retailers who in turn take it to their different smaller markets and resell them.
This gives us 100% assurance that we are going to get our interest back. Because the goods are not taken home and kept there. They sell these goods. They gave us about 99% retail credit recovery rates. We’ve not had issues with that for now.
We also make money from our service charge. This service charge is indirectly in the goods that this distributor buys. So they don’t really know that they’re paying for it. These are ways we make money, but we have plans for next year to open more revenue streams as we expand our markets beyond Nigeria to West Africa and some other parts of Europe.
Since you launched, how do you attract and retain your customers – manufacturers and distributors?
The exciting thing for us is that we are not like other startups that have to go to different markets or different cities to get manufacturers. We have the biggest manufacturing market in West Africa is in Nigeria, situated in Aba. The second biggest manufacturing market in West Africa is also in Nigeria, situated in Anambra. I think that’s the one people don’t know. Most people know Aba but they don’t know the one in Anambra.
Since our manufacturers are in the same region, it makes it easy for us to get these people. And also not just getting their trust and like I told you earlier, when we started we had to give value. It was even the middle of the year that we launched our app. We’ve been operating since 2021, we never had an app and that is the mistake most startups make, going into the market for the first time and they develop an app.
For some it works, for some it doesn’t. It all depends on what your customers want, how you interact with your customers. So we have to build value first. In the process of building our value, we made a lot of relationships with manufacturers. Getting access to them became very easy for us.
For the distributors, it wasn’t that easy either. Because in the manufacturer’s case, we had a stationary by most of them. And when we started, they were like, I’m very busy. Come back tomorrow.
That was what they kept telling us. Honestly, they were very busy but giving us that audience why they were busy was something they didn’t see any value in. But now they pay attention because of the value that we have created for them.
For the distributors’ market, there were also a lot of challenges because there are similar markets. And when we want to talk about low income earners with low tech literacy rates. I think the market we are creating is the lowest. For me to tell you that most of these people don’t have bank accounts.
As popular as Moniepoint, OPAY and other banks, some of them don’t have bank accounts. Some of them don’t have smartphones. The few ones that have smartphones don’t even know how to operate the smartphones to even get an email to open Google Play Store to download and add becomes an issue.
So when you are operating in markets like this, you gradually introduce technology. You don’t just come in and introduce technology. You have to offer them value, give them what they are looking for.
They are looking for sales, give them sales. And not just in sales, impact their lives in one way or the other. When you do that, you’ll see that they will pay attention to you. That was how we were able to capture these markets. It wasn’t easy at first. And even till now, we are still having some challenges in other markets that we venture too. But we are also working on it and things are going well.
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How did you meet your co-founder and what convinced you that he is the right person to work on this journey with?
How we met each other is actually funny. The idea was conceived two weeks after my other business failed. I was in my apartment in Warri and I was thinking, how do I do something else instead of crying over failed businesses and stuff like that.
I remembered growing up in Onitsha that these were the challenges my parents faced. And I said to myself why don’t I venture into this market because most people don’t really know how big Aba is. Then there was this narrative going on that Ab is just filled up with fake products. So whenever someone sees any fake product, the first thing that comes to their mind na Aba made.
And I’ve been to Aba before. I know how big the market is and I know that most of the things they do there are not fake. Although some of them have branding issues. So they normally use all these latest branding from all these companies, Gucci and Versace branding kind of stuff to make your products sell.
We understand the reason for this, but I don’t want to go into that. So when the idea came in. I was like how do I get someone that understands the business? I went to LinkedIn and started talking to people about it.
And I discovered that these people don’t really understand the business. They are approaching the business in a kind of fintech or technology kind of way. But I know that this solution is not just creating an app and it just starts running like that. One day, I was on Twitter and someone messaged me and I checked my inbox. It was my co-founder.
He was looking for a co-founder at that particular time. He was in Lagos then and he was trying to build a grocery shopping app where people can order for groceries and just like what GoLemon is doing now.
We then moved the conversation to WhatsApp. We had a call and started talking and it got to a point that he heard about my solution. He was so fascinated because his parents faced the same issues too.
It was like it was all planned because his parents faced the same issues and he was even looking into solving that issue. So we came together and merged our ideas together. I flew to Lagos to meet him.
That was where the founders’ agreement was made. Every other team member and our advisors, we got them from LinkedIn and Twitter. So that was how we were able to recruit our first team – nine people.
Unfortunately, only four are remaining, the others left. And those four that remained are still with us today. You see, not everybody will believe in your vision, but these other four that remained, they believed in the Shoptreo vision. They even saw today before us.
Then we were B2C, but they were seeing what we were not seeing. So having those experienced people on our team made it very easy for us to navigate logistics, navigate the market and also customers. Because our logistics head also worked in FedEx and UPS.
So that knowledge and that of our marketing head who also owns a shoe luxury fashion house in Lagos. We all came together and poured in our knowledge and our expertise. And that was how Shoptreo began and kept on iterating, changing ideas, you know bringing in new added services before eventually added technology.
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This means when you people came together, all of you moved down to Aba?
Outside my partner, the other people have not actually been to Aba before, but they know Aba exists. They have the knowledge but they didn’t know how big this market is. And you have to understand how big the market is for you to be able to build something on it and also share more ideas.
So we have to move everybody to Aba to understand the market properly. You see where the expenses started coming in. As time went on, as we started pivoting, and started changing some ideas. They all had to go back to their respective communities.
Since we started building from our respective communities, we have gotten more knowledge not only about the manufacturer’s market in Aba but also the distributors’ markets everywhere. They’re also going to those distributors’ markets making a query of what they buy, what’s trending, and other things. This also helps in building our customer base.
How is Shoptreo doing today and what does the future look like?
The future is looking great but there are some things I’m not permitted to say yet until we launch those initiatives. But right now we are looking at how we can expand our market-base and move to Lagos and not just Lagos, West Africa.
Also we are looking at how we can expand Shoptreo beyond just informal markets. So we are looking at how we can incorporate the Alibaba model and expand Shoptreo to every part of Nigeria and West Africa.
By next year we will be seriously scaling our tech solution. For instance, people on Facebook buy from Aba for as low as N2000, 3000 Naira per slipper and when they take it to Facebook they sell it for 8000, N9000 and they make good profit. So it has actually been affecting our manufacturers because our manufacturers make low profit.
They don’t really make much gain. But for the distributors, they can buy bulky slippers and take it to their market and sell it three times what they bought it. And people will think it’s very cheap. Because if the slippers is N2,500, for example, and you’re selling it for N5,000 or N6,000. Isn’t that cheap? It’s cheap because people can afford it. But most people don’t know that.
So we are looking at how we can target those our customer segments, and not just those customers but expand to everywhere in Nigeria. Why our B2B model will still be there, that’s our market to market approach will still be in operation. Our B2B model is not changing.
Even while we are targeting those online, it’s still going to be B2B. B2B in the sense that you can’t buy less than a particular product. Like on our app, you can’t buy less than five products.
Before now in Aba, it’s even very difficult for you to go to a manufacturer and tell the manufacturer that you wanted about five pieces of a particular slippers. It’s really impossible, because manufacturers don’t do singles, they do bulky goods.
So we are kind of making it easier for those smaller scale distributors to even get the products from us. Because if you go to Aba, you can’t get less than 10. There’s a policy now in Aba, you can’t manufacture products less than 10 because they have to make profit.
Because materials are becoming expensive and the more materials they buy the more discount they get. So if you are doing more than 10, they are going to buy more material to produce that 10. They’re going to get a discount on the material. That’s another way of them making money.
But if you are buying single or maybe just two, three, people selling those materials are not going to give them a discount because they are buying three materials to produce three. Based on the economy now, we are even making it easier for low income distributors and also online users to have a taste of what Aba can do.
We are going to be launching a referral platform by January. This app is for everyone, both online and offline users. So you can make money even while you buy. For example, you can refer someone, buy for the person or refer someone to buy from you using your agent app. So you make a certain commission from what that person is buying.
You can even make a commission for what you are buying. If you know how to go about it. It’s like everybody introducing everybody and also making money at the same time. So that’s the concept we came up with for everybody to benefit from what Shoptreo is offering. So the more goods you buy, the more money you make.
We are also working on franchises to European countries. I won’t go further on this until we launch that part of the business. But aside from that, we also have a lot of things that we are working on for next year. Our major goal now is to increase our market share.
This is expanding to Lagos, massively scaling the technology to not just the markets in Nigeria but to the whole of West Africa, while also maintaining our market to market approach. So those are things we are working on that will unfold as time goes on.
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What are some key lessons that you have learned in your journey as an entrepreneur?
Resilience. I think that founders can never say that enough. That’s to be honest, the market is going to test you. But what sets you apart from others is your determination, your zeal to continue moving forward.
At some point we thought we would never get to this stage, we almost gave up, to be honest. Because we understand the market better than everyone else, we have to keep pushing. One thing I would advise people is don’t let people make you feel like they understand the market more than you.
Because you are the one solving the pain points and you have been there. So someone else out there might not have gone through that pain point and doesn’t really understand how big what you are building.
While you listen to people, also try to feed off negativity because it’s important. Because a lot of things will test you. Some people might even come and tell you that what you are building is not scalable. We had a lot of people that told us that in 2022 and they even gave a sermon on it.
But we are still here today, pushing, and still growing. The question is how determined are you to make sure that this thing that you put in effort grows? Your determination matters a lot. Your zeal matters a lot. You have to learn to motivate yourself most times because at some point you feel less motivated to do things because of challenges here and here.
There was a time when we were going to the market, everybody was telling us, no, we don’t need you. We have ways we are doing it. If we had given up as of then. I think there won’t be Shoptreo now and most of the things we want to dish out to the public by next year won’t even be possible.
A lot of challenges will test you so your determination matters and resilience. How resilient are you to make sure that you’re able to accomplish these goals? People should understand that having determination doesn’t mean you don’t know when to pivot or when to iterate. That’s not what I’m saying.
But I usually tell people instead of shutting down, pivot or iterate or something better. Because entrepreneurship is not easy anywhere in the world. And one thing I’ve also learned is that – I think most people that watch this video might not agree with me. But it’s something I’ve learned from experience.
Sustainability is very important in a business. There was a time we were getting no’s from investors but what kept us going was sustainability. We were actually generating revenue. From that revenue, there was a profit we are making every month. It was little as of then, but it was something.
Those profits were like the motivation we needed to know that people are actually using this. If we can do more, we can increase our profit. So these are the kind of things that motivate you to not want to quit. But if you are the type that creates a platform and you just go straight to pitching to investors.
Maybe you don’t have a solid track record. You’ve not exited a startup before. You’ve not worked in a very deep organization. I think it won’t be up to six months before you start thinking about quitting. There is this feeling you get when people are using your product, even when investment is not coming, than when people are not using the product.
I will also advise people coming after me to focus on sustainability, why they are also looking for investments. There is no law that says you can’t do good. I know some people will doubt this but the truth is that it has worked for me. You can do both. We can focus on profitability, and at the same time, focus on scaling.
What key advice would you give to people that are just starting out their business?
One advice I’ll give to people starting is before you start anything, look at the market. The market is very important because the market will determine what you are going to offer. You’ve to look at how big the market is.
You don’t launch before figuring these things out. That’s the mistake people make. If some people were like us, they would have launched before going to the market to do some surveys and discuss with manufacturers and distributors.
There are people like that. But those are mistakes that early founders make. I think it’s because of excitement. Excitement is good. It kind of pushes you but sometimes it allows you to make mistakes that you wouldn’t have made if you had listened or settled down to think it through.
So before you venture into anything, look at the market. Ask yourself, does this market have potential? How do I acquire users in this market? Until you figure it out, don’t launch.
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