Is Jumia Really An African Unicorn? Spoiler Alert: Yes!

Is Jumia Really An African Unicorn? Spoiler Alert: Yes!

Jumia is a leading ecommerce company in Africa. They have been in the market for over 8 years and have managed to build a reputation as one of the best online shopping destinations in Africa. Is Jumia an African unicorn or a foreign company posing as one?

What exactly is Jumia?

Jumia is Africa’s finest e-commerce site. It is a one-stop shop for all your needs, with a wide range of products and services. The company was initiated by Rocket Internet, a German startup incubator which invests in the creation of digital businesses all over the world on certain e-commerce models. Jumia was founded in 2012 by Jeremy Hodara and Sacha Poignonnec, alongside Tunde Kehinde and Raphael Kofi Afaedor, in Lagos, Nigeria.

Jumia was the first e-commerce marketplace in Africa to offer customers the ability to pay online and cash on delivery. The company has grown rapidly since its inception and now has over 100 million users across the continent of Africa. It has expanded its operations to include 14 countries. The company’s headquarters are located in Berlin. However, they have offices all over Africa, including Kenya, Ghana, Morocco, Egypt and Algeria, with over 5000 employees worldwide.

Jumia has been able to grow rapidly over the past few years. Because they focus on providing African consumers with access to quality goods and services at affordable prices by leveraging technology. They offer a cheaper alternative to shopping for expensive imported goods from other countries like China and America.

Rocket Internet has left Jumia investors round

Over the years, the African unicorn Jumia has raised more than $986 million between 2010 and 2019. It has brought together high-calibre investors such as Orange or Axa Africa Holding. Making the e-commerce platform the first African unicorn.

In the midst of this excitement, the German historical shareholder and e-commerce specialist “Rocket Internet”, which supported the launch of Jumia in 2012, withdrew from the shareholding in April 2020.

The rise of the marketplace rivaling Amazon in Africa

Africa is a rapidly growing market that is being overlooked by the West. With more than 1 billion people, the continent has become a goldmine for international companies. The competitive marketplace for online shopping in Africa is growing. New players like Jumia are entering the scene. Jumia, the leading e-commerce site in Africa, is currently competing with Amazon for dominance on the continent.

The Amazon empire is still the most popular e-commerce site in the world. But Jumia is one of the companies that have been working to solve some of the problems that African customers face when shopping online. For instance low credit card penetration and expensive shipping rates.

Market overview

Jumia Group is a company that aims to meet all the commercial needs of African consumers online. It is based on three main pillars:

  • Jumia Market serves as an intermediary between sellers and millions of clients. It includes all types of products and services (Jumia Food, Jumia House, Jumia Deals…)
  • Jumia Logistics organizes the delivery of millions of packages through its network of local partners.
  • Jumia Pay enables payment for online transactions across the Jumia ecosystem.

The unparalleled service-based strategy of Jumia

The company’s success can be attributed to its customer-centric approach. Jumia was able to reach customer service “excellence” and maintain it by providing an online chat support system, an offline call center and live chat support at various times of the day.

Jumia also employs a team of engineers who are constantly developing new features and tools to help improve the overall user experience. In addition to continuously investing in new technologies and innovations in order to improve the shopping experience for their customers.

How Jumia is empowering Africa’s economy as an African unicorn

Jumia is a pioneer of online shopping in Africa. They have been able to provide millions of Africans with access to goods that were previously only available offline. Jumia provides both consumers and sellers with an efficient way to buy or sell goods online. They also offer payment services, logistics, delivery, customer support, mobile applications and more.

This company has been able to empower many people by offering them the opportunity to be entrepreneurs. While making it easier for others to buy or sell anything they want without having to leave their homes.

Jumia was born in Nigeria, the most important economy of Africa (the GDP of Lagos alone is the equivalent of the GDP of Ivory Coast, Cameroon and Senegal combined). Jumia quickly expanded to Morocco, Egypt, South Africa, Kenya and Ivory Coast. Today it is present in 14 countries. The platform was founded by two French people who are passionate about Africa and who have decided to bet on e-commerce in Africa.

What makes the African market both a challenge and an opportunity

Jumia was the fruit of an observation first. A number of factors combined made an African unicorn such as Jumia and e-commerce in general become relevant for the continent:

  • Double-digit economic growth particularly in Nigeria, Ivory Coast, Kenya and Tanzania.
  • The strong development of the middle class which has new consumption needs (1/3 of the population in Africa according to the African Development Bank).
  • Access to new communication technologies by a large part of the population (450 million internet users after the boom of cheap smartphones).
  • The lack of shopping centers.

Building e-commerce infrastructure in Africa requires a lot of investment and time, whether for logistics, marketing or human aspects. The challenges are immense. Educating the population to shop online, adapting payments to an unbanked population, delivering in cities or countrysides where the infrastructure is very weak, training employees in new professions…

All of these challenges represent tremendous opportunities. Today, Jumia is thinking about the medium and long term for the next 10 or 20 years. They are building a new economy, new digital routes that millions of sellers and customers will use. « Imagine the potential of Africa, when e-commerce represents only 0.6% of purchases while it’s 12% in the US and 20% in China. We are convinced that in a few years, the continent can overtake these regions », expressed Abdesslam Benzitouni, the global head of communications & public relations of Jumia Group.

African e-commerce is thriving, and it’s only going to get better. Africa’s population is expected to double by 2050, and its digital economy will grow with it. African consumers are quickly embracing the convenience of online shopping. With many retailers taking advantage of this trend to offer goods and services at lower prices than they would be able to charge if they were operating offline.

Conclusion: Yes, Jumia is an African unicorn

The controversy surrounding the ownership of Jumia is a big question that has been on the lips of many people in Africa. Since it was founded by two French nationals, Jeremy Hodara and Sacha Poignonnec, and is incorporated in Germany in addition to counting several prestigious international shareholders, is Jumia an “African” or international unicorn?

Well, Jumia is a 100% African unicorn. Why? Because it is an African story that began in 2012 in Lagos before being present today in several countries. Raphael Kofi Afaedor and Tunde Kehinde, -the two Nigerian entrepreneurs that originally co-founded Jumia with Rocket Internet-, emphasize the firm’s African roots.

All of the activity is on the continent and 99% of their employees are based in Africa. This success proves that it is possible to attract international investors to Africa. This is a strong sign for all entrepreneurs who believe in the dynamism of the continent.

However, African or not, the focus should be on the value the company is creating on the continent and not its origin. As long as Jumia is creating jobs and economic opportunities in Africa, nothing else matters.

We hope Jumia will be pioneers and pave the way to many other African unicorns!

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