How e-Commerce can lift Nigeria’s economy, by Anammah
Chief Executive Officer of Jumia, Nigeria’s leading online shopping platform, Juliet Anammah, cut her teethin corporate management at May & Baker Plc where she worked for eight years. Her experience in strategic management at Accenture equally molded her for the challenging task of ensuring that Jumia succeeds in Nigeria. In this interview, Anammah talks about the challenges of playing in Nigeria’s e-commerce industry, new projects that her organisation is planning to implement and areas where she expects that government intervention will ensure that e-commerce contributes remarkably to the growth of Nigeria’s economy. ADEYEMI ADEPETUN reports.
Can you briefly tell us about Jumia’s history in Nigeria?
Jumia first started in Nigeria started in 2012. At that time e-commerce did not exist in the form it is today. We had just one hub to serve all the customers in Nigeria. We celebrated our fourth anniversary in April this year and when you look back you will notice that the company has grown remarkably. Today you talk about a site with over nine million visitors per month and over 5,000 active members on our market list. Today the number of SKUs a customer can choose format any time is about fifty thousand, so we are talking about a significant and remarkable pace of growth.
On the back of that has been our ability to innovate and adjust to the business environment. When we started there was limited trust in e-commerce, but we were able to bridge those gaps by offering payment solutions that influenced public perception in a very positive way. Now people know that if you order from Jumia it will surely come and the trust level is much higher now than it was when we started. Indeed it has been a tremendous time for Jumia and we are looking forward to many more exciting years ahead.
What were the main challenges you experienced building up this brand in the last four years?
The area we are having huge challenges is logistics- last mile logistics. Last mile logistics can be broken down to a phone you package and send to a customer. Not many logistics providers were doing that in the market. So we had to create a company called AIGX, now called Jumia Services basically to bridge that gap. So those places where existing logistics companies could not cover, we had to take on the challenge. Besides, almost all existing logistics service providers were not configured to collect cash on delivery since they were operating with a pre-paid mindset so we had no option but to step in.
Another challenge we have is educating the vendors to internalise the tenets of e-commerce. It took a lot of time to make vendors understand that when a promise is made, we will deliver this order in four days, it must be kept. No vendor should say he is going on holiday, leave, vacation or ‘I did not see it on time.’ This underlines the importance of shipping within 24 hours. We also had to stress the importance of specifications. If a customer saw and selected a blue shirt, you cannot pick or ship a green one. It really took us a while to train and give vendors the desired orientation that will make things flow at our desired level.
How is jumia managing the intense competition in the sector?
If you take a country like the United States of America, a square metre of retail space takes care of3.89 persons while in Nigeria it is about 60,000 people. So you can see the huge gap between the numbers of people who want to shop online versus the number of outlets available. Clearly the opportunities and the population are here. How we can ensure that we remain competitive? It boils down to customer satisfaction. In all the markets I have worked in, one primary goal for success has been clear value proposition and delivery for consumers. The fact is, no matter what happens, it is the customer who decides whether to shop with Jumia or at the open market. So our concentration is to make the buying experience at Jumia as simple, enjoyable and effortless as possible.
If we do that, the customer will continuously agree that it’s in his interest to shop at Jumia. That is why we unveiled the smart shopper campaign to tell everyone that it is smart to shop on Jumia. There is convenience, wider support and quality assurance. These are the things that matter as far as brand survival and growth is concerned. If you focus your strength on delivering these, you will continue to lead the market.
What specific things do you feel stakeholders like the government; regulators can do to grow the e-commerce sector in Nigeria?
The things that could be done are pretty straightforward and seemingly simple. Take Nigerian Postal Service (NIPOST) for instance. In most countries, the public national postal service like NIPOST serves as the biggest logistics partner in e-commerce because they are in every city. If NIPOST was working efficiently – which I believe government can do with some determination -We would not need to invest at all in logistics. I would only get a warehouse, assemble my products and get them to the nearest NIPOST office where consumers can pick their items. With this, the cost of distribution or delivery for the consumer will be grossly reduced.
The entire infrastructure network really affects our vendors mainly. Apart from Lagos, other ports in Port Harcourt and Calabar are not functional. If those ports were functional, everyone will not be shipping through Lagos. We are now compelled to serve our customers in Benue or Yobe State from Lagos inventory. If those ports were functional and with Calabar – Ogoja- Northern road functional, we can reduced the period of delivery from four to two days. All these are linked to infrastructure – seaport, road and rail network and all these things are what government can do.
The third thing is related to the foreign exchange market. The foreign exchange market requires certainty especially for foreign investors, importers and exporters. They must be sure that this is the rate and it is applicable to everyone so if they want to source from the market they can be sure of the process to follow. It’s one thing to liberalise the foreign exchange market and another to build certainty into the process of liberalisation. This will help the average manufacturer and vendor who need raw materials to produce goods they can sell online. There are really many other things government can do but these are certainly the urgent ones.
What are those unique qualities that have helped your company gain so much popularity and acceptance among consumers in the Nigerian market in just four years?
I think it is the fact that we do a lot consumer engagement. We also build programmes and campaigns, what we call our tier-one events, that draw a lot of traffic, a lot of excitement in the market. In June we had our mobile week campaign. This is a whole week that customers can purchase various brands of phones at discounted prices. In November we will have our usual black Friday. These kinds of activities that drive a lot interest and excitement have helped to build the brand equity we have in our kitty. We also have a lot of creative online and offline marketing activities and investments that are unique. All these combined with the exciting memorable experience they have in every encounter with us have helped to build great brand recognition for us in the market.
With this level of success have you thought about giving back to the Nigerian society in form of Corporate Social Responsibility (CSR)?
You know, when it comes to that, a four-year-old has not reached the point of legacy of “giving back”. We are still pretty young in this game. Nonetheless, there are a number of things we are doing. We have what we call ‘Jumia Local’ which we are launching soon. We want to try and gather local manufacturers and assemblers to provide them quality visibility on our platform. We have seen that no single manufacturer can attract the number of customers that come to site on a daily basis. So we will showcase them to a huge prospective market.
We will not just stop there. We will consciously use our resources to promote local products that can serve as good alternatives to imported ones. Everyday I discover that we have so many quality local brands with good prices, but they lack capital and capacity to expand. These are the products we are targeting. I believe this will give small and medium scale businesses in Nigeria a reason to smile when we start this programme. We also have what we call the ‘J-force’ where we give citizens with no capital the opportunity to function principally as independent sales consultants, with attractive commissions, flexible hours of work and regular free training. They run their own businesses, manage their teams, work at their pace and earn unlimited income.
Are you saying that the young fashion designer down the road can display her products on Jumia platform free of charge?
Yes, she can. If we look at what she produces and give her guidance on the type of assortment that customers online want, these are the styles and the way to take the pictures and upload them, this is the way you can manage your stuff to make sure that you can deliver them on time when customers make orders, yes she can come on board. And this will be with zero commission. Commission will be charged only when they move up from the small or medium scale level.
Are you doing anything with Government?
No yet. But there are some things in the pipeline, particularly around made-in-Nigeria promotions to support local manufacturing. We are planning to start up a partnership in this area with a government agency. We are also working on what we call ‘Jumia Village.’ This is an extension of the concept of providing opportunities for those with limited online access. We will be providing experience centres in universities; small communities and distant locations so that anyone without immediate online access can go into a centre, sign in, book hotels, buy on Jumia and transact business online.