The African eCommerce Challenge
Africa is growing in terms of eCommerce use, though many are still not connected online which limits the growth potential of African eCommerce.
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This is a challenge that is presented to Jumia, which in the company’s own words is the largest eCommerce platform on the continent. Jumia’s challenge isn’t just that many there are still not connected online, but infrastructure as a whole is still very limited.
For starters, fewer than a quarter of Africa’s roads are paved. This would be a big challenge for any company that is engaged in online sales and delivery.
Access to electricity is also a big challenge. Many areas still experience outages every now and then. Such challenges could make eCommerce a struggle to operate on a consistent daily basis.
Add to these challenges is that fewer than a third of Africans have any internet service.
African eCommerce – Potential vs Infrastructure
Jumia is located in Lagos, Nigeria’s capital. Nigeria is perhaps one of the most progressive countries in the continent, having the largest economy. Many tech startup companies have also seen growth there in recent years.
The Jumia Group, the parent company of Jumia, was started in 2012 by Rocket Internet, a company based in Berlin, Germany.
Its CEO is Sacha Poignonnec, the company hopes that Nigeria would serve as its base from where it would then expand. Already there might be hope for it, as the Nigerian government has been investing much on transportation, power generation as well as technology.
In order to overcome many of the obstacles, people have adopted innovative ways to get over the deficiencies. The Jumia Group is doing that by encouraging online buying habits on people.
This is done by setting up booths with laptops where people then can go to their sites. Every step of the eCommerce process is done with an innovative solution in mind in order to overcome the structural limitations that companies face.
Even with these challenges, the company has been able to deliver ten thousand packages a day throughout Nigeria. Some analysts do think though that it would need a large amount of cash in order to continue with its profits and development.
There are also talks that Amazon might enter the African market, which could pose an added challenge for Jumia, but a greater opportunity for African eCommerce.
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Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.