Africa e-commerce firm expands to new markets
today Jul 28, 2014
BERLIN, Germany - Online retailer Jumia, a would-be African Amazon set up by German venture capital firm Rocket Internet, is expanding into three new markets - Uganda, Ghana and Cameroon, the company said on Monday.
Jumia, which launched in 2012, already operates in Nigeria, Morocco, Ivory Coast, Egypt and Kenya, offering up to 100,000 different items for sale from its local warehouses.
The company has recently set up local offices in Uganda after initially launching a service there in February that relied on deliveries from Kenya. The Ghana and Cameroon sites are set to open within the coming weeks, a spokesman said.
"We know we are early. We are coming to markets which are not as mature in terms of Internet penetration and Internet savviness but still there is a big appetite for this service," Jumia co-founder Sacha Poignonnec told Reuters.
Berlin-based Rocket Internet is bidding to create the largest Internet empire outside the United States and China, seeking to replicate the success of Amazon and Alibaba in markets such as Africa, Latin America and Russia.
Global consulting firm McKinsey estimates about 16 percent of sub-Saharan Africans, or just over 160 million people, are connected to the Internet, compared with nearly 75 percent in Europe and 32 percent in Asia.
A surge in mobile Internet access means that figure is expected to rise sharply in the medium term, helping African e-commerce sales reach $75 billion by 2025, McKinsey predicts.
Jumia, whose main investors are mobile operators MTN and Millicom and Sweden's Kinnevik , promises to deliver products ranging from fashion to consumer electronics in one to five days, even to remote villages.
Poignonnec said there were plenty of opportunities for synergies with MTN and Millicom as they are leading telecoms players in Jumia's three new markets: "This helps to build a stronger business," he said.
Rocket Internet has already launched less investment-intensive online businesses in the new markets it is entering such as food delivery service HelloFood, real estate market place Lamudi and taxi booking app Easytaxi.
"We start with a very deep knowledge of the market," said Poignonnec, who is also co-chief executive of Africa Internet Holdings (AIH), a partnership between Rocket Internet, MTN and Millicom which runs those groups.
AIH declined to give figures for sales or hits on its websites, but the company told Reuters in November that Jumia is growing at 20 percent per month and orders had increased from $50-$100 per day to millions of dollars per month a few months after its launch.
In Nigeria, Africa's biggest market by population, Jumia is the most visited online shopping site, according to Web traffic measurement firm SimilarWeb.
Overall, Jumia is the 23rd most visited site in Nigeria by desktop Internet users, ahead of rivals Amazon, Konga and Alibaba Group's online retail unit, AliExpress, which rank 29, 30 and 31, respectively.
Jumia, which already has more than 1,500 employees, expects the expansion to create about 100 jobs, with an initial team of about 30 people in each country responsible for customer service, packing, dispatch and delivery.
Sources have told Reuters that Rocket Internet is considering a stock market listing in Frankfurt later this year which could value it at up to 5 billion euros.
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