The African ecommerce landscape is unique, characterised by the following attributes:
A mobile-first approach: high smartphone penetration drives a mobile-dominated shopping experience. GSMA estimates that smartphone adoption in Sub-Saharan Africa was at 55% in 2023, and it is expected to reach 86% by 2030.
Cash on Delivery (COD) preference: limited access to traditional financial services and lack of trust in online shopping make COD the preferred payment method for most of the population.
Logistics infrastructure challenges: a fragmented infrastructure and poor addressing systems create delivery hurdles, especially in rural areas and secondary cities. Technology and innovative partnerships play a crucial role in addressing these challenges.
Social commerce: Africa has a vibrant social media scene, and sellers leverage platforms like Facebook, WhatsApp, and Instagram to reach customers. This shift towards social commerce is driven by factors such as the continent’s large population, a growing purchasing power, rising internet and smartphone usage, and a young and tech-savvy demographic.
Online marketplaces like Jumia impact the African economy significantly due to multiple factors. One of them is job creation, as online marketplaces like Jumia create employment opportunities across the ecommerce ecosystem. Through partnerships with third-party logistics providers, Jumia helps people earn a living as delivery riders and pickup station agents. Furthermore, through the JForce programme, which is a network of independent sales agents, young Africans can introduce consumers to ecommerce and earn commissions for every sale made on the platform.
Small and medium enterprise (SME) growth and financial inclusion are also impacted by online marketplaces. Jumia empowers SMEs by providing a platform to reach new customers across the continent – and offers COD and other payment methods to encourage participation from the informal economy. When talking about addressing gaps in customer needs, due to itsglobal exposure to leading brands, Jumia can help such partners launch their business in Africa through its marketplace – responding to the market demand for brands like Leroy Merlin, Adidas, Starlink, or L’Oreal. Supplying the underserved is tackled through Jumia’s extensive logistics network, which enables the delivery of products to customers in upcountry destinations.
Jumia recognises the diverse payment landscape and implements several strategies:
Pay on Delivery (POD): Jumia prioritises POD, offering a familiar and secure payment option for a large portion of the customer base.
Mobile money: partnerships with mobile money providers like M-PESA allow seamless payments, leveraging high mobile penetration. According to GSMA, 234 million accounts were active in 2023.
Bank transfer and card payment: Jumia caters to users with credit or debit cards, integrating secure payment gateways, as well as bank transfers to enable easier payments.
The evolution of payment methods will reshape Jumia’s operations, specifically alternative payment solutions and digital wallet adoption. Jumia has started to integrate solutions like Buy Now, Pay Later (BNPL) options in key markets like Nigeria and Egypt, catering to a growing digitally savvy population and providing a much-needed service in a challenging economic environment. As digital wallets become more popular, Jumia will further integrate them for a faster checkout experience.
This editorial piece was first published in The Paypers' Fintech for Marketplaces and Platforms Report 2024 which taps into the fast, ever-expanding ecommerce industry, being the ultimate source of information for businesses looking to expand and grow their consumer base.
Hisham is the Group’s Chief Commercial Officer (CCO), having previously served as CEO and CCO for Jumia Egypt. Hisham has 17 years of experience in ecommerce and telecoms – and held multiple leadership roles, including steering Amazon’s EU Assortment strategy as well as Fashion Category Leadership in the UK. Before that, Hisham worked for Vodafone Group, where he managed global relationships with Apple and Samsung across 17 countries.
Jumia is a leading pan-African ecommerce platform operating across 11 countries in Africa. Our platform includes a marketplace, which connects sellers with customers, a logistics service for shipment and delivery, and our payment service, JumiaPay, which, together with its network of licenced payment service providers and other partners, facilitates transactions among participants active on our platform in selected markets. For more information about Jumia, follow us on X: @Jumia_Group
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now