- Title: NIGERIA: Awful Lagos traffic a boon for online retail - Jumia
- Date: 11th April 2014
- Summary: CLOSE OF ONLINE CATALOGUE
- Embargoed: 26th April 2014 13:00
- Location: Nigeria
- Country: Nigeria
- Topics: Economy,Transport
- Reuters ID: LVACRIDP85Q7GGJFL12NQLQUSVKI
- Story Text: Jumia is one of Nigeria's online shopping destination where one can shop the widest selection of electronics, fashion, home appliances, and kids items. With 26 million US dollars investment from Summit Partners, and added funds from Rocket Internet and JP Morgan, Jumia has grown to become one of the biggest online retail stores in Nigeria.
There are two main reasons people shop online; it is cheaper or they cannot be bothered with a trip to the store.
And in Lagos, a city of 21 million people, a trip to the store can kill your entire day if you lose the traffic lottery.
Inspired by the need to have the biggest online retail presence in Nigeria, Jumia online retail store came into existence in May 2012 with a goal to maximize the e-commerce space.
"The e-commerce model is extremely relevant for Nigeria, especially because of all the hassle that everyone can experience every time they go to a shopping mall," Jeremy Doutte, co-chief executive officer of online retailer Jumia, told the Reuters Africa Investment Summit.
Jumia has 100,000 Nigerian customer accounts and sales are increasing by 15 percent a month, Doutte said on Thursday (April 10).
A shopper can spend 45 minutes on a bad day in a queue of cars pushing and shoving to try and gain entry to the parking lot of a shopping mall.
Lagos is the main commercial city of what is now Africa's biggest economy, since a GDP rebasing exercise pushed it ahead of South Africa. Yet it has only three shopping malls, all of them packed to bursting point during peak hours.
This is where retailers like Jumia, which is 33 percent owned by South African phone operator MTN and rival Konga, fill a niche as internet penetration grows among Nigeria's 170 million population, the largest in Africa.
"We want to re-empower the Nigerians with their time and if we can build a service and a company in two years whereby people can shop everything at anytime and on Saturday, instead of spending two hours in traffic at the Palms mall, people can just shop from their couch, in twenty minutes, order everything they want and get delivered within 24 hours and now actually, we are managing to serve a considerable amount of orders within 24 hours in Lagos," Doutte said.
Jumia, which also has operations in Morocco, Ivory Coast, Egypt and Kenya, aims to be Africa's answer to Amazon, although e-commerce remains in its infancy on the continent. It is not yet profitable but spending heavily to grab market share.
Doutte says that in emerging markets outside Nigeria it is usually price comparison that entices shoppers onto the web.
"Shopping online in Nigeria just makes sense and we usually say that people can shop online for two reasons, price and convenience and usually in emerging markets, people shop online for price. Why? Because the online website is just a great comparator, you can compare the prices and see they're reliable. I think that Nigeria maybe one of the only countries in the world, emerging markets where people shop online for convenience, and are ready to pay the price," he said.
Co-CEO Nicolas Martin says traffic's success in delivering customers far outweighs the headache it causes for deliveries.
"It's painful for us, extremely painful for us to navigate through the traffic, but with professional way of navigating through, it's actually a bit easier than for the Nigerian customer that has to face it during office hours or at the shop opening hours and so to get to the mall, it's actually extremely painful for our customer," he said.
It is not only Lagos where the firm is seeing fast growing sales, Martin said, declining to five absolute figures.
It has 10 centres throughout several cities in the south and the capital Abuja, and plans to open in the main northern city of Kano, where Shoprite just opened a store in a new mall, this year.
Challenges remain, not least abysmal infrastructure, port delays, other supply chain woes and getting people to trust websites with their bank card details.
But Doutte said online retailers are slowly overcoming fear of online fraud which is another thing that Lagos is famous for.
In the early days, delays to a delivery would have customers calling up in a panic, convinced that they'd been swindled. Such calls are much rarer these days, Doutte said.
- Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2014. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: Video restrictions: parts of this video may require additional clearances. Please see ‘Business Notes’ for more information.