Online retail becomes a reality in Africa’s biggest market – behind the scenes with Nigerian Internet startup Jumia

The next global e-commerce company might come from Nigeria rather than Silicon Valley. And why not? With 160 million people, Nigeria is a rising market that cannot be overlooked. Internet access continues to improve across the country, and with strategically placed investments, the market is quickly being unlocked for e-commerce startup JUMIA

Founded in 2012, JUMIA has grown to be the 4th most visited Nigerian website. JUMIA has over 1,500 employees in four countries and the website receives about 300,000 unique visitors daily. VC4Africa recently had the chance to follow up with co-founders Tunde Kehinde and Raphael Afaedor, Harvard graduates and the rising stars behind Nigeria’s fast growing e-commerce engine.

You want to be the #1 online retailer, and just announced your expansion to the Ivory Coast. You want to be the go to place for buying products online – including fashion, consumer electronics, home appliances and mobile devices. What actually makes your model work?

Raphael: “There is not just one single “trick” but an ambitious and passionate team. We bring together all the key elements that are crucial for our development – IT, Product, Marketing and Business Intelligence. We share our knowledge within all our teams in all countries and this is what makes the difference.”

Figuring out the model is step one. But you are not alone and competitors like and seek marketshare as well. How have you gone about building a leading team and scaling your operations? 

Raphael: “Basically, we have done two things to gather a team of talented people around us. Firstly, we’ve raised funding from very influential investors which enable us to source top-notch talent. The African Internet Holding, the company behind Jumia, is the number one destination for African entrepreneurs. And secondly, we have travelled and looked all over the globe to find Nigerians who want to return and change something in their home country. We have recruited from top university all around the world and of course the best in Africa.”

According to statistics company Statista, B2C e-commerce sales in Africa accounted for 2,1% percent of global B2C e-commerce sales, thereby representing a 31% growth in global share since 2011. In the debate Go Global vs. Go Local where do you stand, and how do you describe the growth strategy for Jumia?

Tunde: “We have of course a global outlook in particular with regard to sourcing talents, investors and products. However we are serving the people of Nigeria. We have a team of over 500 employees with 94% of them being Nigerian. They know the needs of the local customers and the local specifies of the Nigerian market which is crucial for us.”

The company was created with capital from German firm Rocket Internet. You just closed a round of funding. How much did you close, who were the investors and what was their interest?

Tunde: “Our funding represents the largest investment in a Nigerian e-commerce startup to date. Recently, JUMIA secured with its affiliated companies a $35M funding in JUMIA’s holding company from MILLICOM. This funding comes in addition to recent investments from J.P. Morgan and Summit Partners – which overall comes to more than $50M. We developed an overall strategy to meet all the challenges we face in shaping e-commerce in Africa. The funding allows JUMIA to continue its rapid growth – Inadvertently in all areas of its operations from staff, fleet, to warehousing facilities. For example, building three more logistic centers in Warri, Kaduna and Benin; in addition to those already existing in Lagos, Abuja and Port-Harcourt.”

See this interview to get some additional perspective on the company and founders.

One perception is that Nigerian based startups differentiate themselves from say Kenya and Ghana because they are not founded by technical people, but rather business savvy deal makers. What is your take?

Raphael: “JUMIA operates in 5 African countries: Nigeria, Morocco, Egypt, Kenya and Ivory Coast. We all care about entrepreneurship and aim to generate an impact for the African online retail space as well as for our customers. However, the synergy that arises through the cooperation of entrepreneurs with different perspectives and backgrounds (both commercial and technical) is critical.”

Tunde: “Most important is to be an entrepreneur. One example: We developed an overall strategy to meet the challenges of an emerging market and to meet the needs of our customers. Given the difficult infrastructure in Nigeria, and the hesitancy of Nigerian consumers to pay online with their credit cards, we built our own delivery system and implemented new payment methods. That is a great innovation that now powers our business model.”

African Internet Holding is the company behind Jumia. How did you meet them? How did you get involved in their business and what has it meant for the growth and development of the Jumia company? 

Raphael: “They saw great potential in the market and especially in e-commerce which we found very interesting. We benefit a lot from their network, expertise and vast experience of operation in e-commerce, including a billion dollar business in several continents. A program like this is globally unique. Therefore we are very proud to be one of the chosen ones.”

What do you see as the biggest barrier to the Nigerian tech space moving forward?

Tunde: “The lack of trust to buy online and the limitations in distribution logistics were two of the major challenges that JUMIA faced. We solved these challenges, and are continuing to address these market gaps, by always thinking about one thing ~ We have to provide the best service to our customers.”

Raphael: “We chose 100% transparency by enabling every customer to get in direct contact with our customer service team. Examples for this are our 24-hour call center and a company-owned fleet of drivers. People in Nigeria often prefer to pay cash due to slow internet, skimming and fraud. Therefore JUMIA can offer cash-on-delivery service to the most developed locations in Nigeria (Lagos, Abuja, Port Harcourt, Benin, Warri, Kaduna). Furthermore JUMIA made credit card payment safer and easier by integrating the MasterCard’s Internet Gateway Service. JUMIA is able to offer a door-to-door delivery service with its own fleet of drivers as mentioned earlier.”

Tunde: “Now the foundation is set for the future of e-commerce in Nigeria. I am very thankful and proud to know the hard work has paid off.”

Do you have a message for the VC4Africa members? What advice do you have for your fellow entrepreneurs across the continent? And what is your message to Africa’s investment community?

Tunde: “There is a lot happening in the African e-commerce environment and it is exciting to take and have part in its development. It is just the right temperature for founding new companies. Gather a team of talented people to change the face of African entrepreneurship.”