Nigerians collect loyalty points the way they collect plastic bags: a few here, a few there, almost none of them ever used. Dsquares, an Egyptian loyalty company that says it serves 150m end users, is betting that problem is big enough to build a business on. It has signed a partnership with we.yan, a Nigerian super app, and both firms describe the deal as the start of Dsquares' operations in Nigeria.
What Dsquares brings
The company, founded in 2012, runs rewards programmes for banks, telecoms operators, retailers, FMCG brands, fuel retailers and e-commerce firms. Its own figures: 75+ custom programmes, 2.5bn+ transactions facilitated and a network of 21,000 merchant branches, across 16 markets in Africa, the Gulf and Eastern Europe. Divide those transactions by its user base and you get roughly 17 per user over the company's life, which says more about breadth than depth. Before this deal its African offices were in Egypt, Kenya, Tanzania and Morocco.
we.yan, led by founder and CEO Tamer Bahgat, combines payments, savings, investing, chat and trading in one app. It is live in Nigeria, and the ecosystem it uses for airtime top-ups was picked as a digital retail channel for the Dangote Petroleum Refinery IPO, which is a useful piece of distribution credibility for a young platform.
Interoperable, or just another points scheme?
The pitch is interoperability. Instead of points locked inside 1 brand, rewards earned paying a bill could be spent with a different merchant, and the focus is on everyday spending: airtime, data, bills and money sent home. Small businesses would get loyalty tools built into the infrastructure, with the cost of rewards shared across the businesses that benefit.
That is the right problem to attack. Shared-cost loyalty is cheaper for an SME than running its own programme, and airtime and data are the closest thing Nigeria has to a universal currency for small rewards. The catch is that neither firm has published a launch date, a merchant list, user numbers for we.yan or any earning and redemption rates. Coalition loyalty schemes live or die on the number of places you can actually spend the points, and that number is currently undisclosed.
Dsquares' chief executive, Marwan Kenawy, called Nigeria a highly dynamic digital market and a base for growth across Africa. That ambition is easy to state and expensive to deliver. The deal gives an established regional operator a foothold in Africa's most populous country; whether it becomes a habit for Nigerian shoppers depends on how many merchants sign up in the first 12 months.
Figures are as reported at the time of writing. STATART news is written by Frank Brother (Markets), Christina Amgbari (Insights) and Ebipadei Joseph (Lifestyle), and checked before publication.