How did a startup in Lagos turn into the first unicorn company in Africa valued over $1 billion?
The name is Jumia and was founded in 2012 in Lagos by Jeremy Hodara and Sacha Poignonnec, co-founders and co-CEOs of Jumia, and they have redefined the way Africans do their shopping since they launched.
The first question that arises in your mind must be, “What exactly is Jumia?” Well, we are here to cater to that very question.
Jumia is more than just a marktplace
Jumia offer a lot of services such as Jumia Market (a classified site where you can list your item for sale - Amazon of Africa), Jumia Travel (a platform you can use to book hotel reservation - Booking.com of Africa), Jumia Food (online food ordering- Uber of Africa), Jumia Car (a classified site dedicated to cars - Sixt of Africa ). But their main focus is their where you can shop wide range of products, from fashion to electronics, books, toys, groceries and many more.
How Jumia became the first African unicorn 🦄
The company’s first years in operation were marked by rapid expansion. In 2012, Jumia took up operations in Egypt, Morocco, Ivory Coast, Kenya and South Africa. Two years later, offices in Tunisia, Tanzania, Ghana, Cameroon, Algeria and Uganda were launched. By 2018, Jumia was present in 14 African countries.
Jumia started with an initial staff of 10 in Nigeria. It now has more than 5000 employees on the continent. The platform kept expanding into new markets. As early as 2013, Jumia Travel for hotel bookings and Jumia Food became operational. In 2015, Jumia Deals began publishing classified ads from third-party vendors. JumiaPay was launched in 2017 and was soon followed by a lending programme which grants business loans to third-party sellers. Later, a flight-booking platform was created in cooperation with Amadeus, a technology company.
It is big but there are many challenges
With a population of 1.3 billion, a growing middle class, high GDP growth and high internet and smartphone (77%) penetration, the opportunity for e-commerce in Africa is large. Despite this, there remain fundamental challenges, including poor infrastructure, a lack of locally manufactured goods, and economic instability, that e-commerce players must overcome in order to succeed. These challenges help to explain why the e-commerce market is still so underdeveloped, with penetration less than 1%. However, the development of a core digital infrastructure across the continent has created opportunities for e-commerce players to solve these challenges and meet the needs of consumers, much as Jumia has done.
The future of Jumia
Jumia achieved a near 2-year high in year-over-year order and GMV growth. The growth is of course a pandemic-related favorable comparison. However, Jumia insists that it can maintain this kind of momentum going forward. Most notably, the accelerated order growth helped boost GMV growth despite a 9% decline in average order value. This decline will continue given management's strategy to emphasize the purchase of everyday items. The share of sales from "everyday categories" has steadily increased from 55% in Q1 2020 to 67% in the latest quarter. These sales were enabled by the addition of almost 1 million FMCG SKUs.
We believe in the long-term potential for Jumia, because right now the stock market for Jumia does not look good and many Wallstreet wolves advise against buying the stock.
We at Meezy do not offer any integration with Jumia but do help a lot of startups & scale ups to sell on European marketplaces. Curious how we do this? Feel free to book a free 1:1 call with us. ⬇️