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How Jumia Invested In Non-Existent Market & Made E-Commerce Big In Africa

One of the sectors that have really contributed to the growth of technology in Africa is e-commerce even though the sector did not exist in the market 10 years ago.

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How Jumia Invested In Non-Existent Market & Made E-Commerce Big In Africa
Ougoing Jumia CEO, Sam Chappatte, at the launch of Jumia Black Friday in November 2021. Photo/Arthur Kuwashima

It is evident that technology has grown tremendously in Africa over recent years. A lot of aspects have fueled the growth in the continent.

One of the sectors that have really contributed to the growth of technology in Africa is e-commerce. It is a sector that did not exist in the market 10 years ago but today it has grown into one of the biggest industries locally.

Jumia has been at the forefront of e-commerce in Kenya and Africa as a whole. I had a sit down with the outgoing CEO of Jumia, Sam Chappatte, as he debunked the journey Jumia has had in the market.

Sam has been part of Jumia since its early days and at the helm as the company soared through different hardships to become the leading e-commerce platform in Kenya. He now leaves the mantle to one Betty Mwangi as he venges into other things in technology after achieving what he pretty much set out to when Jumia debuted in the market.

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“E-commerce had been around, but it was not yet in Africa. We saw a lot of potential with the growing smartphone penetration, and a population of early adopters of the technology.” Sam says regarding the gap they saw in the market in the early days.

“Jumia has succeeded in my view because we have rolled with the punches and played the field in front of us. From day 1 we were well-capitalised and had systems in place to scale. But that’s not enough. It took a ton of hard work, from a large number of smart people. There’s no shortcut,” he adds, “We have learned a lot of things along the way, and strive to stay low ego & ambitious.”

The uptake of technology played a big role in Jumia’s growth journey so far and will also play a big part in the continuity of the business, even after Sam leaves the helm.

”The digital economy does not just happen, it is driven by companies and people that step up and invest their time & capital to make it happen” observed Chappatte. “Over the past 10 years, many companies have driven this growth. Looking ahead, there is a lot to be optimistic about – the infrastructure and smartphones are there. And I hope the growing competition between telcos will drive down prices of data fast. This will drive the growth of the digital economy & jobs that it will bring with it.” he added.

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Sam Chappatte
Sam Chappatte

On its part, Jumia invested hundreds of millions of dollars in educating the market and helping digitise businesses and customers. Jumia was both a beneficiary of this digital wave, and at the same time paddling under the water to drive that wave.

They faced a lot of challenges along the way too, as Sam recollects.

“We’ve been through many phases. When we started, it was just the classic marketplace challenge. We needed to create both demand and supply. You need to sell the dream to both sides,” Sam recollects.

Then there were phases of hyper-growth, of profitability focus, and anticipates many more to come.

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The outgoing Jumia CEO called upon African governments to support entrepreneurs because they in turn will drive the digital economy and job creation across the continent.

“Governments need to acknowledge that it’s not only about foreign direct investment (FDI), it’s also about human capital (talent),” he says, “The government can invest in entrepreneurship development programmes, and create the right incentives to support these entrepreneurs. Make it a no-brainer for an entrepreneur of a big company to create a hub in Kenya. Incentivise entrepreneurs locally, help them get funding, and get wealthy. This will attract more money & more talent, and have a big multiplier effect on the economy.”

The future of e-commerce is bright. Jumia is starting to invest in electric vehicles. They recently signed a partnership with eBee Africa for use of electric bikes for delivery.

Sam says that this will go a long way in reducing the delivery charges for customers, making more money for the rider, and protecting the environment as well.

Do you have a story that you think would interest our readers? write to us editorial@cioafrica.co

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