Skip to main content

Africa has a Nile, but can it also have an Amazon? Tim Green – just back from AfricaCom – looks into the issues facing e-commerce hopefuls like Jumia and Konga…

Last week at AfricaCom someone was explaining to me how much Nigerians love to shop. He told me that when there’s a traffic jam in Lagos (and there’s always a traffic jam in Lagos), the traders emerge from nowhere and start selling – car to car.

“Last week, someone tried to sell me an ironing board,” he said.

My acquaintance reckons this bodes well for the e-commerce market in Africa. As lucky readers in more mature markets know, online shopping brings convenience and almost endless inventory.

Why wouldn’t Africans want a piece of this too?

And given that the continent is still largely reliant on cash (with all its attendant problems of embezzlement and the need to travel long distances to pay), the benefits of e-commerce would be even more dramatic.

But it’s not that simple. The truth is, online shopping in Africa is patchy. It is possible for Africans to order from Amazon, but only from overseas operations; Amazon has not formally launched in the continent (though it does offer Amazon Web Services in South Africa).

   Jumia is Africa’s best-funded e-commerce startup. Its parent company, Jumia Group, could even be called a unicorn, having achieved a $1bn valuation this year.

Which leaves a very inviting opportunity for companies that want to do a Jeff Bezos in the world’s fastest growing mobile economy. The big two that everyone talks about are Jumia and Konga. These two well-backed startups have each contributed to the growth of a sector that Frost & Sullivan projects at $50 billion by 2018 (from $8 billion in 2013).

Jumia is Africa’s best-funded e-commerce startup. In fact its parent company, Jumia Group, (previously Africa Internet Group) could even be called a unicorn, having achieved a $1bn valuation this year. It’s received funding from AXA, Goldman Sachs and others. Jumia is based in Nigeria but has presence in Algeria, Cameroon, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Senegal, Tanzania, and Uganda.

Though Jumia is clearly the best-resourced e-commerce player in Africa, it’s far from alone. is probably its closest rival. It founded in 2012 selling baby and beauty products, but now sells most things. And it has a very popular eBay style spin off called–Konga’s Marketplace with over 30,000 registered sellers.

But, to repeat, it’s early days for both companies. According to a New Yorker article, 2015 financials show Jumia revenue at $149m, against $400bn in Nigerian retail spend.

And there are clear infrastructural and cultural reasons why it may take time for the market to flourish. Writing in the Harvard Business Review, entrepreneur Ndubuisi Ekekwe outlined six barriers to adoption:

  • Distrust: People are skeptical about putting their credentials online when phishing and fraud are rife – especially in Nigeria.
  • Cost of broadband: Fixed Wi-Fi is sporadic and mobile data is expensive.
  • Logistics: Delivery companies and postal systems can be unreliable. Online businesses operate delivery motorbikes, which increase the cost of doing business.
  • Competing with street markets: In Africa, there are markets everywhere. Goods are cheap and often tax-free. An e-commerce company must beat these entities while relying on the banking system, and paying taxes.
  • Fragmented markets: Africa is not homogenous. There are barriers due to cross-border payments, languages, cultural differences, and more.
  • Literacy rates: Illiterate citizens may be unable to participate directly on e-commerce sites that require reading and writing skills.

Naturally, the e-commerce wannabes are trying to overcome these issues. Some offer cash-on-delivery for example. But, again, this brings its own problems. Another Nigerian contact of mine said she knows a lot of people will order goods just to see whether they get delivered, with no intention of actually paying when they do.

Ultimately – and you probably guessed where this was going – it will be mobile that does most to resolve these issues. Two MEF members – Gemalto and iTouch – each told me they believe new forms of rich messaging could move the market forward.

A smart message could be pushed to targeted consumers. It could link to new forms of mobile money (M-pesa, Orange Money, mCash etc) to make payment easier and it could even be reverse billed to ease the data cost to recipients.

Interesting, and more convenient that strapping that just-purchased ironing board on the back of your moped.

Tim Green

Features Editor, MEF Minute


Want to be featured on the MEF Minute?

The MEF Minute is an award winning blog that provides a cross-ecosystem and international perspectives on all things mobile. With contributions from MEF’s members and other industry experts it is a dedicated global news resource and thought leadership platform.

We welcome contributions from members and non-members across a range of formats including opinion pieces, industry views, stats, videos and infographics. MEF Minute offers a 360 look at any given topic impacting the mobile ecosystem whether that be from a MNO, enterprise, developer or provider perspective.

Download the info pack to find out more.