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X-Raying Jumia’s Road To Africa’s E-Commerce Dominance

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No doubt, Jumia has become a household name in Nigeria and indeed Africa. But the e-commerce firm has in recent times come under unwholesome criticism, borne not out of failure to deliver services, but of envy and failure of others to mark up the market. In this analysis, DAVID AUDU takes a look at Nigeria’s e-commerce environment and Jumia’s doggedness to overcome teething problems and forging ahead toward better service delivery.

 e-commerce business has grown to become big business in Nigeria and indeed Africa. With e-commerce projected to generate yearly sales of $75bn by 2025, according to McKenzie re­port, and with over 120 million Nigerians and above having easy access to the inter­net today have contributed to the growth of the market.

That is not to say the growth of e-com­merce does not come with its own chal­lenges. One of such is the threat of cyber­crime and fraud, which in the early stages deterred many people from venturing or­derings goods online.  

Cybercrime expectedly, however, is an international issue that is not exclusive to Nigeria, but through a determined effort on providing security infrastructure by both the state, regulatory agencies, as well as companies, along with improved buyer protection policies, laws, and legislation, have ensured that cybercrime impact on e-commerce is minimised.

Other key challenges faced by e-com­merce companies in Nigeria center around the country’s infrastructure, and as the country strives for more transparent and effective public-private partnerships, a more secure and robust platform for e-commerce growth will emerge, ensur­ing Nigerian entrepreneurs are on an even playing field with countries like Japan, China, India, and the United States.

This is also helped by the fast growing youth populations, expanding consumer power, and increased smartphone pene­tration.

According to report, the current e-Com­merce spending in Nigeria is around $12 billion, and is projected to grow more.

Though Jumia, and perhaps, Konga following at the top of the market, there are more players in the Nigerian space. These include Wakanow, Payporte, Vcon­nect, Kara, Fashpa, and a host of others. Collectively, they have pushed the frontiers for Internet businesses in the country, get­ting over 500,000 online orders every 24 hours in Nigeria.

However, one of Africa’s e-commerce platforms, Jumia, before bracing the path to e-market business dominance, no doubt was well aware of the rough road ahead but remain unfazed.

At Jumia’s entry, in 2013, the internet penetrations then was abysmally very low; online payments trust among the people was also in doubt and smart mobile phone usage was just making scattering inroad into most African countries. Though, that was to experience dramatic boost and blos­soming in later years.

Today, Africa’s internet penetrations has improved tremendously, while smart phones penetrations, according to recent GSMA, an association of mobile network operators worldwide, is about 747 million SIM connections in sub-Saharan Africa, representing 75 percent of the population, thus, making online retail trade an easy venture.

That Jumia started operations in Nige­ria, Africa’s most populous Black Country, was no coincident. The company’s vision of a pan African operation with a global vision was kept in focus despite the turbu­lent economic and social circumstances that came afterwards.

Jumia boasts of supporting more than 80,000 local African companies who did business on its platform in 2018.

“We are taking the African economies online and enabling our sellers to reach and better serve more consumers”, it boast on it mission statement.

These include harnessing the power of technology to deliver innovative and convenient online goods and services to consumers, while opening up new oppor­tunities and horizons to African talents. “We are creating new jobs and developing new skills on the continent”.

Like most startup companies, the begin­ning of Jumia was not too different, but somewhat heightened by certain socio-eco­nomic and fiscal policies which influenced the pace of growth.

Compared to other startups in similar terrain, one would understand that devel­opment strategies and state policies, in­come level of the vast majority of the pop­ulation, with the aforementioned, internet penetration drawbacks, and all inherent factors players in this particular economic sector have to contend and surmount.

According to the company’s results released in November last year, Jumia’s revenue rose 19 per cent to 40 million Eu­ros, even though the period also recorded some losses for Jumia, which targets to be profitable by 2022.

For instance, while it took Amazon, which is regarded today’s as e-commerce reference point, almost a decade to make significant inroads into most of Ameri­ca’s retailers budget, Jumia didn’t struggle that long, before it became a household name.

Remember the famed defunct account­ing giant, Lehman brothers, of notorious memory, which once described Amazon, as “hemorrhaging cash and might not sur­vive”, noting further in its description of why Amazon might not survive, to say “it struggles with a weak balance sheet, poor working capital management, and massive negative operating cash flow, the financial characteristics that have driven innumer­able retailers to disaster throughout histo­ry”. That was Lehman Brothers’ analysis of Amazon, in June 2000.

Amazon was nine years old then, and seems not a profitable venture in the USA, a country regarded as the best market for e-commerce in the World. But the story today is different. As noted earlier, Ama­zon and the Chinese Alibaba are reference points of e-commerce business successes.

Coming back to Jumia, and with due re­gards to the growing consumer conscious­ness, who have in recent years embraced e-commerce, in spite of the continent’s economic adversity occasioned by poor leadership, corruption and mismanage­ment, have reeved up courage to withstand criticism and triumphing.

But, as they say, constructive criti­cism spurs growth. Why would you want somebody down for the sake of it? Well, the market place is breeding ground for envy and jealousy, especially, envy by those who crashed out of the system by nobody’s making.

As noted elsewhere, some people delight in seeing the negative side of Jumia for reasons not related to business. “They are cheering at the “neocolonizer” retreat­ing and having problems. That is to say in many cases it was disappointment to see people considered reasonable and es­tablished entrepreneurs and executives, engaged in spiteful social media rants about Jumia, where the only tangible thing that got disclosed in those rants, was their personally motivated disgrace towards Jumia. It was a kind of pleasures derived by someone from another person’s misfortune.

Today, looking at successful starts ups that have break even, there are only a handful of entities in Sub Saharan Afri­ca that did even remotely as much good for the ecosystem as Jumia. The recent IPO voyage itself validated the market and many fund managers got their invest­ments thanks to that.

Hundreds of Jumia employees went on to become founders and raised money from investors, thanks to Jumia in their CV; and thousands got a better position in a different companies, thanks to their e-commerce background in Jumia.

Hundreds of millions of dollars were pumped into offline marketing through local marketing agencies, printing shops, billboard owners, etc. Market education is the hardest to quantify but probably the most important argument among all of them.

In startups, it is said that the investors decide whether losses are still a “feature”, or already a “bug”. Problem is that, most retail investors don’t understand how high the operating costs are and how painfully slow the Jumia markets grow, according to market analysts.

But this means nothing if your invest­ment horizon is not long enough. It’s hon­estly not a fair deal to compare the markets between Amazon and Jumia.

One would have to look at the purchas­ing power, internet adoption, the preci­sion of addresses, online payments trust, merchants’ reliability, logistics services, currency fluctuation and end with having access to running water and 24/7 electric­ity in your office. In summary, the oper­ating environment for both companies is not the same.

Admittedly, there are so many challeng­es that need to be addressed for e-com­merce in Africa to become hot again and it’s very likely that no one has addressed those challenges yet. No one benefits from Jumia’s problems besides short-term-thinking short-sellers.

Jumia may have served as a punch bag to detractors, but what can’t be denied are its obvious open hands in setting the pace for others to follow.

Also, its contribution to local talent de­velopment and mentorship, as evidenced from those who have referenced it for their future aspirations; these can only be denied for the purpose of ego trip by detractors, which often, are been the bane of pioneer firms globally.

I am Paschal Ogechi Obi Chikero . I have written and published three books , I wrote Festus Keyamo's biography- Lion In Isolation .I have been a Reality TV show Producer/Creator, an Actor and Film Script Writer.

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Safe driving: FRSC commissions Dangote truck driving school…Dangote also trains block makers in Kano, Katsina to prevent building collapse

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Safe driving: FRSC commissions Dangote truck driving school…Dangote also trains block makers in Kano, Katsina to prevent building collapse

Leading Cement manufacturer, Dangote Cement Plc, on Wednesday launched the Dangote Articulated Truck Driving School in a move aimed at inculcating safe driving culture in its drivers so as to stem the tide of road crashes.

The opening of the school in partnership with the Federal Road Safety Corps (FRSC), the Company management reasoned, would also make the drivers become better road users.

The Academy, which was officially commissioned by Corps Marshal of the Federal Road Safety Corps (FRSC), Dr. Boboye Olayemi Oyeyemi, was characterized as historic and unique.

The new Academy for truck drivers, according to the Corps Marshal, is a significant step forward that will benefit not only the Dangote Group but Nigeria as a whole.

The country’s top road safety official hailed Alhaji Aliko Dangote, President and Chief Executive of the Dangote Group, for taking “a big step” towards reducing truck accidents.

He said: “This is what we’ve been waiting for. You made it. I have observed that Dangote has done a lot to address truck crashes and I must commend them for this.”

He extolled the conglomerate for leading other companies on this path, saying the new school will play a key part in the country’s efforts to make roads safer.

He said he had suggested such a school long ago, adding that he is happy that the school has come to fruition.

In his remarks, the National Director, Logistics of the Dangote Cement (Transport section) Mr. Juan Carlos Rincon, said the new school is an expression of the determination of the company to bring to halt the incidences of auto crash in the country.

Speaking also Executive Secretary National Board for Technical Education (NBTE) Professor Idris Bugaje who was represented by Engr S.M. Yusuf, said the NBTE will partner with the Dangote Cement Plc for a successful accreditation and takeoff of the new school.

In his remarks, the Bajana of Obajana HRH Oba Idowu Isenibi said he was optimistic that the school will help address auto crashes in the country, even as he described the President of the Dangote Group Aliko Dangote as a “rescuer and God sent to their communities that should be emulated by other investors in the country.

Speaking in the same vein, the Olu of Akpata Oba Frederick Balogun urged other investors to emulate the company.

Both the Dangote Cement Transport and the FRSC signed a Memorandum of Understand (MoU) on how to cooperate to ensure that the school is a success.

In the same vein, Dangote Cement organized thorough block molding training for block makers in both Kano and Katstina states respectively. This, according to the company is to ensure that the blocks moulded for building constructions are strong, reliable, and durable, noting that some block makers do not really know how to make strong and reliable blocks.

The Coordinator of the programme, Mr. Johnson Olaniyi, said the workshop would give the block molders and allied product manufacturers the opportunity to once again build capacity and adhere to global best practices.

Mr. Olaniyi said the Dangote Cement Plc is desirous of reversing the trend of collapse building through the capacity building of block manufacturers.

Meanwhile, government representatives, quality regulators, cement dealers, block makers, and end-users have come to an accord that Africa’s cement giant produces the best quality of cement on the continent.

The stakeholders who attended the meeting also said the ongoing nationwide workshop and sensitization of block manufacturers will help check the menace of collapsed buildings in the country.

Speaking at the workshop in Kano, representatives of the Kano State Government Alhaji Muhammad Garba Kwall said that Dangote Cement Plc is not only the biggest company but produces the best quality in Africa.

He described the company as socially responsible and that’s why it is giving back to society through the sensitization workshop and creating various platforms for educating end users to mitigate the incessant incidences of collapse building in the country.

Speaking, Regional Director, Kano Directorate, Standard Organization of Nigeria(SON), Mr. Albert Wilberforce urged block molders to patronize the quality cement produced by the Dangote Cement Plc, adding that the SON was partnering with the company and ensuring that only quality cement are produced by the company.

In the same vein, The Kano State Coordinator (II) of SON Engr Hauwa M. Husseini urged the block moulders to comply with standard practice in order to prevent the menace of collapse buildings in the country.

Speaking also, Regional Sales Director for Northwest  Aliyu Dan Aliyu urged participants to be ambassadors by telling their customers about the quality of the cement.

He said: A customer who wants to build a house, doesn’t know the quality or type of cement to use. It is the responsibility of the builder to advise him on the desired cement to use for quality building.

Safe driving: FRSC commissions Dangote truck driving school…Dangote also trains block makers in Kano, Katsina to prevent building collapse

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Dangote Sugar Refinery Restates Commitment to FG’s Backward Integration policy …Rewards Shareholders with N12.147bn Dividend

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Dangote Sugar Refinery Restates Commitment to FG’s Backward Integration policy ...Rewards Shareholders with N12.147bn Dividend

Dangote Sugar Refinery Plc has restated its commitment to the achievement of Sugar Backward integration projects, describing it as the best thing that happened to the sector.

Speaking to shareholders at the 16th Annual General Meeting (AGM) of Dangote Sugar Plc, in Lagos the Chairman of the Company, Aliko Dangote, said that despite the harsh operating environment, the board and management were not deterred in the pursuit of sustainable growth for the company and demonstrated resilience by continued implementation of its strategic objectives during the year, 2021.

The dividend pay-out of N12.147 billion for the year was unanimously approved by the shareholders.  The dividend represents N1.00 per share.

The Company under review posted a Group turnover of N276 billion, being 29 percent increase over N214 billion in the comparative year. Profit before tax of N34.021 billion, profit after tax of N22.052 billion. Group EBITDA decreased to N46.5 billion with an EBITDA margin of 18 percent.

According to Dangote, the Company’s performance during the year under review is commendable amidst the challenges and the negative impact of COVID-19 pandemic on economic activities. “We furthered the implementation of process optimisation, cost savings, and product promotion strategies with the launch of our new brand identity and the pursuit of the Dangote Sugar Backward integration master plan”

He further stated that the Board and Management will continue to implement strategic actions to sustain and surpass this performance while engaging with all stakeholders in the sector and its communities to ensure the realisation of the objectives of the Company.

On the company’s backward integration project, Dangote chairman emphasised that the goal of Dangote Sugar Backward Integration Projects Master plan remains the achievement of 1.5 million MT annually from locally grown sugar cane in support of the quest for sugar sufficiency in the country by the federal government.

He added that this will be achieved in addition to the extended value chain benefits that will be derived from the projects including thousands of jobs that will be generated in the sector from these projects.

He pointed out that despite the challenges faced in the year 2021, Dangote Sugar Numan Operations rehabilitation and expansion efforts of the factory and field are advancing, saying “The community tissues that came up were effectively managed, and we have continued to advance so far without any major disruptions.”

He also noted that “In 2021, our commitment to building a sustainable business remained on track with the principles of good corporate governance. We imbibed best practices, environmental and impact management in the day-today running of our business.”

He assured of the company’s commitment to the achievement of Sugar Backward integration projects, which is the future of the industry in Nigeria, saying this will keep us on our sustained growth path and we will continue to deliver and improve our quality service while delivering value to all stakeholders.

Also, the Group Managing Director/Chief Executive officer of Dangote Sugar, Mr. Ravindra Singhvi said that “We remained ahead of the pack in implementation of the National Sugar backward Integration Development Master Plan.”

He however said that the situation at the Lau/Tau project is still the same, “we continue to remain hopeful that the Taraba State government will resolve the lingering issues with the communities, while we focus on the development of other brown and green field project sites…Steady progress is now being made as we continue the rehabilitation and expansion project at Dangote Sugar, Numan, and development activities at the Nasarawa Sugar Company Limited, Tunga.”

Singhvi stated that the Company remains resolute and committed to ensuring a sustainable future for its business while assuring the shareholders of better days ahead.

The shareholders commended the Company’s performance for the year under review. A shareholder, Mrs. Bisi Bakare, commended the company for the food fortification award received for the year under review and the bountiful dividend paid.

Another shareholder, Mr Patrick Ajudua, also expressed satisfaction with dividends declared particularly at a time like this with the various environmental operating challenges.

He charged the management to improve upon the capacity utilisation of the plant to be better positioned to meet local and export needs.

 

 

PHOTO CAPTION:

dangote

L-R: Chairman, Dangote Sugar Refinery Plc, Aliko Dangote; Group Managing Director/CEO, Dangote Sugar Refinery Plc, Ravindra Singhvi; and Non-Executive Director, Dangote Sugar Refinery Plc, Olakunle Alake at the 16th Annual General Meeting of Dangote Sugar Refinery Plc held in Lagos on June 15, 2022

 

L-R: Company Secretary/Legal Adviser, Dangote Sugar Refinery Plc, Temitope Hassan; Chairman, Dangote Sugar Refinery Plc, Aliko Dangote; Group Managing Director/CEO, Dangote Sugar Refinery Plc, Ravindra Singhvi; and Non-Executive Director, Dangote Sugar Refinery Plc, Olakunle Alake at the 16th Annual General Meeting of Dangote Sugar Refinery Plc held in Lagos on June 15, 2022

 

L-R: Non-Executive Director, Dangote Sugar Refinery Plc, Abdu Dantata; Company Secretary/Legal Adviser, Dangote Sugar Refinery Plc, Temitope Hassan; Chairman, Dangote Sugar Refinery Plc, Aliko Dangote; Group Managing Director/CEO, Dangote Sugar Refinery Plc, Ravindra Singhvi; Non-Executive Director, Dangote Sugar Refinery Plc, Olakunle Alake, at the 16th Annual General Meeting of Dangote Sugar Refinery Plc held in Lagos on June 15, 2022

 

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Diesel Price Might Hit N1,500 Per Liter In Two Weeks – Natural Oil and Gas Suppliers Association

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Diesel Price Might Hit N1,500 Per Liter In Two Weeks - Natural Oil and Gas Suppliers Association

The Natural Oil and Gas Suppliers Association has revealed that the price of diesel might hit N1,500 per litre in two weeks.

NAIJA NEWS NG reports that the association said this will happen if nothing is done to curtail the challenges importers of diesel are facing .

Bennett Korie, the National President of the Association, told newsmen in Abuja that about 75 per cent of filling stations across the country are currently out of business .

He said this is due to their inability to purchase diesel required to power their tankers and transport Premium Motor Spirit, popularly called petrol, to their various outlets.
He added that the solution to the problem is for the Buhari led government to increase the price of petrol to reduce the huge foreign exchange used in PMS imports.

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“If you go round now you will see that about 75 per cent of filling stations in Nigeria have gone out of business. There is no diesel to take fuel to their stations. All of them are going down.

And it is not that the fuel is not there, but the cost of bringing it to the stations is too high. We know that the crisis between Ukraine and Russia has contributed badly, but the government has to do something fast, otherwise we are going to buy diesel in the next two weeks at N1000 to N1500/litre.”

 

On what can be done to the address the situation, Korie said

“The only way out, if you want to know, is that they (the government) should increase the price of fuel a little to reduce the money spent on PMS subsidy.

I know Nigerians will not be happy to hear this, but this is the only solution. They should increase the price of fuel a little so that the savings will enable the Central Bank of Nigeria to have enough foreign exchange.

You and I know that we import everything now in Nigeria. Diesel is an imported product and it is fully deregulated. So the importers are not getting dollars at the official CBN rate to import diesel. Everybody is going to the black market to get dollars to import their products and so you expect the price of diesel to be high.”

 

Korie suggested that the Federal government needs to reduce the rate at which it spends foreign exchange on PMS imports as it will help other businessmen who import diesel to bring in products at low prices.

 

“So you need to increase fuel price a little in order to ensure that the dollars spent in importing petrol is reduced and there will be enough forex for importers of diesel and this will cut down the price of diesel.”he said

 

Speaking further, he said

“The reason why you are having scarcity of petroleum products particularly in Abuja is as a result of the high cost of diesel. The price of diesel today in the market is N850/litre. You will also agree with me that the money being paid as bridging claims to transporters is not enough.

The price is N850/litre and you are giving your driver 1,200 litres from Lagos to Abuja, if you do the calculation you will find out that the landing cost (for transporting the fuel) is about N40/litre.

So if you add that to PMS, buying at the depot price and selling here, it is too high. So if your cost of bringing it in is at N40/litre and you bought it at N155/litre, when you add this you will get N195/litre. But you are to sell at N165/litre. So who will do that kind of business? It is already a loss-making business.”

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