Could Jumia be the Alibaba of Africa?
Alibaba’s successful IPO fixed everyone’s attention firmly on e-commerce in fast-growing markets, and especially on marketplaces, like eBay or Alibaba’s Taobao, and one-stop retail websites, like Amazon or Alibaba’s Tmall. One of the many questions we’re now asking in the aftermath of the massive Alibaba IPO is: Who will become Africa’s Alibaba?
Jumia, the ecommerce platform launched by Rocket Internet that does both one-stop retail and marketplace is a serious contender. The chain operates locally in nine countries (Nigeria, Cameroon, Egypt, Ivory Coast, Ghana, Kenya, Morocco, Nigeria, and Uganda), boasts impressive fundraising rounds, and the advantages of being a Rocket Internet company. Still, Jumia has to content with fierce competition from Souq in Egypt and Hmall in Morocco, and is a long way from becoming Africa’s third most popular website, like Taobao is in China.
We met with Jumia Morocco’s manager Taïbi Benhima to discuss his company’s challenges and strengths.
A young company with deep pockets
It’s hard to think of Jumia without thinking about fundraising. All in all, Jumia has raised more than $60 million USD. “It’s an extremely capital intensive industry,” explains Benhima. “You need to be able to deliver the expected items, with the minimum amount of interaction, and be sure that the delivery is good enough not to damage the product. This cost a lot, and needs funding,” he continues.
His answer to any of my questions regarding clients is the same: Jumia’s goal is client satisfaction. “We’re not wondering when we will break even, but how to reach total satisfaction while cutting cost. We won’t make any sacrifices on client satisfaction.” It’s hard to get him to say more, but Rocket Internet’s various managers always say the same thing: “We will try to make it faster than Amazon [who broke even after eight years].”
Being a member of Africa Internet Holding (AIH), the joint venture launched by Rocket Internet to manage all its ventures in Africa (in partnership with African telecoms MTN and Millicom), brings more than just financial advantages, explains Benhima: “It’s as if we had a consulting firm we could reach to whenever we need to.”
For example, even though MTN doesn’t have a branch in Morocco, the group helps by bringing in the mobile expertise it has earned doing mobile and m-payment in Kenya.
The membership also helps in getting general services, and the inside information only a big group can give. For instance, when Facebook changes its algorithm, all the country managers get a report the following day, he says.
Jumia’s Moroccan branch now aims to get out of the big cities and to “truly cover the entire country with our own fleet,” explains Benhima. The company is also to open a new warehouse, two and a half times bigger than the current one. To keep up with this growth, Jumia Morocco needs to hire.
“The challenge is that we need great people at all the levels,” from management to logistics, he says. When it comes to logistics, they have to make sure employees pick the right products, as fast as possible, otherwise the client may get the wrong product, or may get it too late. When it comes to the offer, employees have to review all the products on the site to delete products that don’t match the posts or are not up to the quality standards. To find those talents, you need to meet a lot of candidates, says the manager, and this is where the challenge is.
According to sources, Jumia has already 150 employees in Morocco.
Working on the interface
To make their Moroccan client are satisfied, the team had to build a platform that answers their specific needs, explains Benhima. No need to complicate things, he believes; “If our client prefers paying cash, then we’ll let them.” Even though Benhima finds m-payment to be a great option, he says he doesn’t want to push it because Moroccans mostly pay in cash for now, and don’t ask for m-payment.
This choice will surely make all the difference with its competitors. Hmall, for instance, tries harder to push online payment on their customers. Jumia’s strategy is also different from Alibaba’s, which can explain a big part of its success in developing its own payment service, Alipay.
Jumia Maroc’s other priority is to let Moroccans buy products using the language they prefer. The website is fully bilingual, says the manager. “[Translating the website] is long hard work that people underestimate,” he explains. Not only do they translate the website, but they also aim to use the most relevant language every time they want to promote a product or do a campaign. “For some brands, communicating in Arabic led to an increase in sales,” he says, declining to elaborate.
The coming years will be crucial for Jumia, Hmall, and the others. Moroccan e-commerce is bound to explode, and the benefits will go to the platforms that put in the effort now.