Why Africa’s ‘largest retailer’ Jumia calls itself a startup

In February, I put Nigeria’s two leading ecommerce giants Jumia Nigeria and Konga to the test. The results showed some concerns about the quality of customer care and order tracking services being offered by Jumia. Last Thursday, on the sideline of a major event held at the Main Auditorium of the University of Lagos, I spoke to Jonathan Doerr who’s the managing director of Jumia Nigeria on the company that he describes as the largest ecommerce platform in Africa — and the continent’s largest retailer.

Even though many Africans see Jumia as a very big ecommerce company that is competing with the likes of Amazon, Doerr didn’t mince words in describing Jumia as a startup, in fact, he called it a classical startup which is currently at its growing phase which means the focus for now is not on making profits — it’s all about growing the company and getting good figures.

He noted that Jumia is investing a lot of its investors’ money on growing the business in addition to its technology and logistics. Furthermore, he mentioned infrastructural development as another area the company is investing lots of cash in. He also said the company is spending a lot on advertising.

“The normal growth path of a startup is to reach this stage,” he said. As a startup company, Jumia is relying on funds provided by its investors which include telecommunications company MTN, and Millicom. The investors, according to him, are not expecting the company to start making profits.

“We are not going to be wasting money for 100 years and at some point we will start making profits. But our investors believe in the Jumia story of Africa and they are confident in our business plan and people working at Jumia,” he said.

Jumia Africa

Apart from Nigeria, Jumia has also expanded to more other African countries — 15 in all and Doerr said even though Nigeria remains the company’s biggest market in Africa, operations in other smaller markets are growing.

“Our operations in other African countries are growing and we are proud of them, but Jumia Nigeria is the biggest in Africa,” he told Ventureburn.

He also revealed the company will continue to expand to more African countries, even though he refused to say where next Jumia is opening office in Africa. Even though Nigeria, Kenya, Ghana and South Africa are very popular tech markets in Africa, Jumia is operating in all except South Africa. Although, Jumia doesn’t have a brand presence in South Africa, it operates via the popular fashion site Zando which is of the Africa Internet Group.

“We are glad to see growth in other African markets — we are seeing new markets which will be launched soon. We are proud of the Jumia story of being the largest retailer in Africa,” Doerr added.

A third ecommerce giant in Nigeria

For the past three years, the ecommerce space in Nigeria has been dominated by only two companies, Jumia and Konga. I asked Doerr whether the Nigerian market is large enough for a third ecommerce platform. He said yes, although he believes new ecommerce platform should explore other business models in order to survive the Nigerian market. The MD explains:

There is a lot of space for innovation; there is a lot of space for startups. There will be more money coming into this country. When you look at Nigeria, the citizens are so young and tech-driven. There will be lots of development of ecommerce in Nigeria, not just the classical Jumia model — there are several different ecommerce types and these kinds of models will develop in Nigeria. We look forward to seeing lots of companies joining the market and we are seeing opportunities to work with each other.

Incubator for tech ecosystem

Several months ago, I wrote on SureGifts, a company founded by three former Jumia employees who — after months of crunching the ecommerce giant’s data — found a niche they could latch on to launch Nigeria’s first gifting card company. They are not the only ones as even the founding CEOs have moved on to launch new companies.

Doerr said Jumia is very proud of the ex-employees he described as ex-Jumians who he said the company helped to train and are now playing crucial roles in the growth of Nigeria’s ecommerce and startup ecosystem.

“We have ex-Jumians who left Jumia after two to three years to start their own companies. We are proud of them and we help them to launch other startups with the knowledge Jumia brought to the market,” he said, adding the company has a long-term goal of not just building itself, but to build the Nigerian ecommerce and internet market.