Jumia’s Seed and Growth of Today’s Entrepreneurs – By Ayomide Oriade
Decades after the internet and its accompanying digital offerings redefined world information dissemination, business operation and transaction model, the comfort and ease of online shopping was on the exclusive list of Nigerians who have the privilege of visiting clime where Amazon, eBay, and the likes run their services. To other Nigerians, it was a figment of imagination.
Africa was a huge market up for the taking, but venturing into uncharted territory always comes with severe threats and jeopardy. So when Jumia came with the idea of replicating the online shopping experience on the continent of Africa in 2012, many saw it as a wild goose chase. Who dares run e-commerce services on a continent with less than 5% internet penetration? Jumia has since proven to be the answer.
Nine years on, the seed planted by Jumia has since given rise to a league of sophisticated African digital consumers, as well as a league of digital market entrepreneurs. Since the launching of the online shopping experience, e-commerce is increasingly disrupting the retail industry in Sub-Saharan Africa. Konga, Payporte, Jiji, Kusnap and several other players, have since invested in the sector and are treating customers to an e-tailing experience. The United Nations Conference on Trade and Development (UNCTAD) reported that the number of online shoppers in Africa surged annually by 18% since 2014. The pillars needed for e-commerce are also beginning to fall in place. The International Telecommunication Union statistics revealed that the share of the population using the Internet increased from 2.1% in 2005 to 24.4% in 2018.
The ripple impact of this on SMEs has been enormous. Today, thousands of businesses thrive on online exposure and sales. In its nine years in Nigeria, Jumia being at the forefront of the market, has connected over 11,000 SMEs and brands to millions of consumers in Nigeria. The company’s sales campaigns have become a major window for brands and sellers to reach wider audiences and experience record sales figures. For instance, Black Friday powered by e-commerce brands in Nigeria has a track record of being an assembly of brands and products. In 2018, there were more than 10,000 small businesses on the Jumia platform for Black Friday. In 2019 this figure increased to more than 12,000 with over 10 million products on sale. More than 41,500 sellers participated in the 2020 edition and there were also commensurate figures of sales partnering brands, as top 20 sellers registered 141% growth in items sold.
Among the greatest beneficiaries of e-commerce on the continent is the fashion industry. Due to the borderless nature of the online marketplace, several fashion entrepreneurs are emerging in Nigeria and Africa by the day, and are leveraging e-commerce platforms to project their products to a global audience. A cursory look shows that the Nigerian fashion industry has produced notable entrepreneurs who have leveraged online sales platforms to grow multi-million Naira businesses in the last nine years.
Thanks to e-commerce, African fashion industry is beginning to optimize its potential. According to Euromonitor, Sub-Saharan Africa’s clothing and footwear market is worth $31bn. “The growth has prompted the expansion of foreign and local brands into the African clothing market. Companies are fulfilling increasing orders from the African diaspora, particularly in Europe and America, while sales of Ankara gowns and African print dresses are also popular among non-African consumers. This has led to the creation of African-based e-fashion platforms,” the report said.
Just like in developed economies, e-commerce has rubbed off positively on logistics in Nigeria, creating a win-win situation for investors in the sector and businesses alike. For instance, Jumia’s investment in the logistics sector has boosted hundreds of independent logistics companies by incorporating them into the Jumia logistics network. The impact of this on SMEs is obvious. During the last Black Friday window, Jumia Logistics handled 4.8 million packages. To further extend its impact on SMEs, the company opened its logistics network to businesses outside its marketplace. During the pilot conducted in 2020, Jumia shipped almost half a million packages on behalf of more than 270 clients including large corporations such as banks, FMCG companies, mobile network operators as well as SMEs from a broad range of industries.
E-commerce activities have also created thousands of direct and indirect employment opportunities. An instance of this is JForce initiative, a nationwide network of sales consultants with a profit-sharing scheme in which the agent, who is also a Jumia consumer, earns a certain percentage as commission for successful orders placed for self or for others on Jumia’s retail chains. JForce has continued to serve as a source of income for thousands of Nigerian youth with basic online shopping skills, especially in rural communities. With over 5000 employees, Jumia and other e-commerce businesses are expected to generate over three million jobs in Africa by 2025.
Also, key in its contribution is the huge empowerment tool e-commerce has become for the female gender. A report released by PricewaterhouseCoopers (PwC) showed that women accounted for 41% ownership of micro-businesses in Nigeria. With apt knowledge of this crucial role of women in the SME subsector, Jumia has been empowering many women-owned businesses through various empowerment initiatives. The brand has been serving as a facilitator and enabler for women, especially fashion entrepreneurs. To achieve this, Jumia connects fashion entrepreneurs with acquisition managers who work with them to launch their fashion brands on Jumia platform, which is regarded as the foremost online fashion destination in Nigeria.
The Africa e-commerce unicorn is known for her partnership with Facebook for female-owned SMEs by offering them a free master class on business growth accelerators, effective customer engagement strategy, and how to advertise their businesses and ultimately grow their businesses. In addition to the brand’s initiative to bridge the unemployment gap, Jumia launched its ‘Women & Youth Empowerment’ pilot programme in Yaba, Lagos in June 2019. The programme is aimed at providing training and support to young women who are looking to expand their sources of income and also empower women through e-commerce.
Though e-commerce is still at its nascent stage in Nigeria and Africa with a 1% penetration rate, it is already having a huge impact on entrepreneurs and businesses. It is thus safe to say that Nine years ago, Jumia planted the seed of growth for entrepreneurs, and today, the seed is producing many crops.
Ayomide, a Public Relations Executive, writes from Lagos