December 19, 2013
High-Tech and Low-Tech, Nigerian E-Commerce Starting to Click
A common complaint in Nigeria is that things just don't work. The phones don't work, the Internet is down and the man who fixes your car is nowhere to be found. In this climate of confusion, how does Jumia, a savvy new internet company styled like Amazon.com, manage to ship everything from lipstick to laser printers across the country?
Lagos, Nigeria’s biggest city, is famous for, among other things, bad traffic and Internet scams.
When a few young men here cooked up the idea of opening an Internet retail shop in early 2012, they thought they could use both to their advantage.
Retail shoppers would happily stay home to avoid traffic, and Nigeria didn’t gain its infamy for Internet scams by being computer illiterate. At a warehouse near the Lagos airport, Jumia Managing Director Tunde Kehinde says that when they started, not everyone saw these qualities as advantages.
“Recruiting the initial team was tough and getting suppliers to trust us because everyone -- customers and suppliers -- are skeptical about anything online in this part of the world,” recalled Kehinde.
Initially, it took the startup four weeks to get the site online and to start delivering. But even once they were online, they couldn’t convince Nigerians to enter their credit card numbers into the website, said Raphael Afaedor, another co-founder of Jumia.
“We are not going to grow by actually waiting for people to get comfortable with paying online, so we came up with pay on delivery, where we actually take the product to the person from our warehouse and then the person pays once they see and touch the product,” explained Afaedor.
He said the company started with five motorcycles and a dream to be the largest retailer in Nigeria, Africa’s biggest market and home to over 160 million people.
They still have a long way to go, but they now have more than 150 vehicles, 600 employees and deliver thousands of items a day.
Like their Western counterpart, Amazon.com, Jumia sells a broad range of items from shoes to booze.
Unlike Amazon, retailers in Nigeria have to deal with the bad roads, crazy traffic, daily power outages and the widespread corruption that make it hard to do business here.
Kehinde said Jumia has managed to grow fast because it has always factored these challenges into their business plan. For example, they dispatch items on motorcycles so they can deliver to homes that aren't near viable roads.
“It’s a once in a lifetime opportunity. Africa is open for business, but just don’t copy and paste. Come, learn, localize and grow,” said Kehinde.
E-commerce is still new to Nigerians, but Jumia already competes with two other websites: Konga.com and DealDey.com.
Jumia investors have also opened online shopping centers in Egypt, Morocco, South Africa and Kenya.
Jumia workers call themselves “Jumians” and are on average about 27 years old.
Wealthy Nigerians from their parents’ generation shop in London, they say. They hope rich and middle-class Nigerians of their generation will soon start shopping in Nigeria.