Jumia: E-commerce Africa Style

It manages 48% of commerce in electronics, has spread to 23 countries and is now aiming to conquer Egypt with its vendors.

Africa, too, has a website for electronics sales like Amazon, which sells all sorts of things from clothes and guitars, to electronic games and computers. It is called Jumia and, since its debut in 2012 it has had 1.5 million clients and today it is the largest website with 48% of the African market. The most important market is Nigeria, followed by Egypt. It operates in 23 African countries and controls around 126 local websites. Its competitors are Amazon and Souq.com, found mainly in North Africa.

The Jumia shareholders are a large group of African and European companies such as MTN, Orange, Millicom International Cellular and the society of Berlin Rocket Internet. But we must also mention Goldman Sachs, the American commercial bank. Jumia is growing at a very fast rate; in 2016, it was the first African start-up to be valued at over a billion dollars. The secret of its success? Besides selling objects in local currency, it has adapted e-commerce as we know it – you choose an item, pay for it and it is delivered – to the African situation where not everyone has a bank account or a credit card. Even in the remotest village, using a smartphone, one may buy all sorts of goods from Jumia, but most of all – and this is what makes Jumia different – the African e-commerce websites allows one to pay cash on delivery.

In 2017 Jumia reported an income of 507 million Euro: +42% more than in 2106. It is now hoping to make Egypt the largest of its markets on the continent, using a vast network of abusive street vendors. It has asked the government regulate the network of vendors as soon as possible, offering fiscal incentives and favourable loans to allow the distribution of Jumia catalogues on-line to passers-by. The “informal” commerce of street stalls and vendors amounts to at least 37% of total consumer spending.

In Egypt, inflation has reached 30% and it is likely that many will choose the cheaper goods offered by Jumia, perhaps by using a simple booth in a street market.

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