African e-commerce firm expands to new markets

Online retailer Jumia, a would-be African Amazon set up by German venture capital firm Rocket Internet, is expanding into Uganda, Ghana and Cameroon, the company said yesterday. Jumia, which launched in 2012, already operates in Nigeria, Morocco, Ivory Coast, Egypt and Kenya, offering up to 100,000 different items for sale from its local warehouses.

The company has recently set up local offices in Uganda after initially launching a service there in February that relied on deliveries from Kenya. The Ghana and Cameroon sites are set to open within the coming weeks, a spokesman said. “We know we are early. We are coming to markets which are not as mature in terms of Internet penetration and Internet savviness but still there is a big appetite for this service,” Jumia co-founder Sacha Poignonnec told Reuters.

Berlin-based Rocket Internet is bidding to create the largest Internet empire outside the United States and China, seeking to replicate the success of Amazon and Alibaba in markets such as Africa, Latin America and Russia.

Global consulting firm McKinsey estimates about 16 per cent of sub-Saharan Africans, or just over 160 million people, are connected to the Internet, compared with nearly 75 per cent in Europe and 32 per cent in Asia. A surge in mobile Internet access means that figure is expected to rise  in the medium term, helping African e-commerce sales reach $75 billion (Sh6.5trillion)  by 2025, McKinsey predicts.

Jumia, whose main investors are mobile operators MTN and Millicom and Sweden’s Kinnevik , promises to deliver products ranging from fashion to consumer electronics in one to five days, even to remote villages. Poignonnec said there were plenty of opportunities for synergies with MTN and Millicom as they are leading telecoms players in Jumia’s three new markets.

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“This helps to build a stronger business,” he said. Rocket Internet has already launched less investment-intensive online businesses in the new markets it is entering such as food delivery service HelloFood, real estate market place Lamudi and taxi booking app Easytaxi.

“We start with a very deep knowledge of the market,” said Poignonnec, co-chief executive of Africa Internet Holdings, a partnership between Rocket Internet, MTN and Millicom which runs those groups.