NYSE Listed Ecommerce Platform Jumia saw a change in its buying habits in its markets in Africa last year as more shoppers bought everyday goods rather than electronics.
Purchasing essentials such as food, fashion and beauty products saw Jumia’s total sales value of fast-moving consumer goods increase by 13 percentage points last year, from 44%. in 2019, according to the brand new Jumia Africa E-commerce Index 2021. report.
The Jumia report attributed the change to stay-at-home restrictions which have fueled the need for online shopping as well as the young population and growing smartphone and internet penetration across the continent. Smartphones contributed 75% of traffic to the e-commerce site.
“By providing consumers with access to essential food and services, we have seen a transition to essential related products of phones and electronics. It shows how Covid-19 has also increased the relevance of e-commerce in the communities we serve, ”Abdesslam Benzitouni, head of communications and public relations at Jumia Group, told TechCrunch.
Jumia said more sellers have signed up for Jumia Mall – a platform for official brands on the main site – increasing shopping options and offering a wide variety of products. Jumia is currently Africa’s largest e-commerce platform, leading hundreds of others including Chinese company Kilimall, Marketplace Africa in Nigeria and Bidorbuy in South Africa.
“Brands (on Jumia Mall) know that e-commerce is the future. Having them on Jumia means consumers have access to their products and brands are within reach. Different sellers on the platform also mean that we create transparency and competition between brands. “
The report, prepared in partnership with the United Nations Conference on Trade and Development, the International Finance Corporation and Mastercard, also showed that 28 million orders were placed on the platform last year. The cities of Lagos, Cairo and Nairobi recorded the most orders by volume, respectively.
About 35% of orders placed through Jumia were paid for using the company’s financial arm, Jumia Pay, an app that allows customers to pay their utility bills and place orders without leaving the company’s platforms. the company. The popularity of the Jumia brand has also increased in all of its markets, with Uganda, Senegal and Tunisia experiencing the strongest growth.
Jumia attributed the current growth of the continent’s e-commerce sector to the increasing, albeit slow, penetration of the internet. In sub-Saharan Africa, 303 million people, or around 28% of the population, are connected to mobile internet according to the GSMA 2021 mobile economy report. This is expected to reach around 40% of the population by 2025, providing a bigger market for internet-based companies like Jumia. But th– Trade adoption in Africa remains low, according to a recent report by the International Trade Center (ITC), with just 10 countries accounting for 94% of online business. Nigeria, South Africa and Kenya accounted for most of the online sales in sub-Saharan Africa.
“… The digital and economic infrastructure in Africa greatly affects e-commerce and helps explain why the online economy works better in some countries than others,” the ITC report said.
“In addition, more than half of the population of 60% of African countries live in rural areas. Internet connectivity tends to be poor in these areas, which are also remote from distribution centers, meaning that freight delivery services are either poor, nonexistent, or expensive. All of this creates huge obstacles for e-commerce, ”he said.
Compared to cities, rural areas accounted for 22% of orders placed on the Jumia site, which Benzitouni attributed to the growing logistics network of e-commerce. He said that over the past nine years, Jumia has built a logistics network aimed at enabling people living in remote areas to shop at his site.
Jumia plans to use its logistics network to tap into rural areas – which the company says has seen high demand for its services in these areas. The e-commerce platform opened up its logistics marketplace to third parties, a place previously only used by food vendors and for e-commerce.
It now has 300 logistics partners and 1,600 collection stations in its 11 markets in Africa, including Algeria, Senegal, Tunisia, Uganda, South Africa, Nigeria and Morocco.
Last year, Jumia had around 110,000 annual sellers and 6.8 million active customers, a small number compared to the mainland’s population. According to the ITC report, the growth of e-commerce across the continent is hampered by the lack of cross-border opportunities, as most platforms operate within national borders. He said there is an opportunity for a market that can have a significant Pan-African presence.