JUMIA: A Local African Entrepreneurial Success Story
Two young West Africans are taking e-commerce to the next level in Africa’s most populous nation – and soon to be the continent’s largest economy – Nigeria.
Exploring the huge potential in the oil-rich country, the founders of online retailer Jumia – Nigerian Tunde Kehinde and his Ghanaian partner, Raphael Afaedor – saw a big opportunity in the market a year ago and decided to meet the growing needs of the country’s emerging middle class.
“There are 160 million Nigerians today and there is no organised retail in Nigeria,” explained Kehinde, Jumia’s managing director. “And with 160 million Nigerians, everyone is always going to need a shirt for an occasion, a phone to contact somebody or a book to read. But there is no organised medium across the country where I can consistently find what I want easily, at the price that I want. And we said, ‘let’s not wait to build malls, let’s launch online’. It worked in other countries; it has to have an edge out here.”
“We’ve done two things,” he continued. “One is we’ve raised money from very smart investors who can get us access to top-notch talents. We’ve raised money from Rocket Internet, from JP Morgan, from Summit Partners, really blue-chip investors. And with them, they don’t only give you money, they also give you contacts. And the second thing we’ve done is we’ve gone around the world to find Nigerians who want to come home. We’ve gone to recruit at Harvard Business School, at MIT, at Oxford, at London Business School. Also locally at GTB, at Samsung, at Nokia and also across all the best universities in the country…”
The company said the success of the business lies in the calibre and experience of its staff, with some of them having worked with big brands such as Amazon. “It’s a very young team at Jumia and the average age is maybe 24/25… But we want to make sure that they are trained the right way so they know what they are doing… It’s been challenging but we’ve hired the best and we train them regularly,” said Kehinde.
And his partner agrees. “Everyday I’m amazed by the quality of the team that we have,” Afaedor added. “I wouldn’t ask for anything better. It’s a combination of two things. One, we try very hard in our recruitment process… and we’ve put in place a culture of performance. It’s a very young team but people understand that they are here to deliver; we’re building something special… The team has responded very well and it’s really that we look for the best talents, locally trained and internationally trained.”
Kehinde said the team is key to the big dream of turning Jumia into the Amazon of Nigeria and that has been the motivation and attraction for the young guys at Jumia.
“The attraction is how often in your lifetime [do] you get to build something that doesn’t exist in your own country? We are building the Amazon of Nigeria and in a country that has not had organised retail since 50 years of independence. It’s a once in a lifetime opportunity,” Kehinde said. “Only so many people can build Facebook, only so many people can build Amazon, and so when you are given that challenge, I think a lot of our people responded to it. Because what we are doing is making history in a country that is the biggest country in Africa.”
From an initial staff of 10 just a year ago, Jumia is growing rapidly and now has 450 employees, with a physical presence in six states and delivering throughout the country. “And we have over 50,000 products for sale today,” added Kehinde.
Although the founders said they knew they were heading in the right direction, they never imagined things could get this big, this fast. “One of the reasons why Jumia has grown so fast is because we are serving a need,” explained Afaedor.
“If anything at all, the surprise has been the market,” continued Afaedor. “It’s amazing how much potential there is in this market. We are where we are within just 11 and a half months and we are barely scratching the surface.”
However, operating in an environment that is typically sceptical of online business because of experiences with fraud, comes with its challenges. The founders, who met at the Harvard Business School, knew they had to overcome the problem of trust. “The big challenge for us then was getting the trust of Nigerians, to shop online with their credit cards,” explained Kehinde.
According to Afaedor, they came up with a cash-on-delivery system where people only have to pay when the product is delivered to them.
He listed other challenges to include the ability to provide regular electricity to power the offices, overcoming the communication infrastructure and moving goods from one point to the other. “As we grow from one stage to the other, the challenges sort of changed.”
Jumia said it seeks to expand its operation to have a physical presence in all the 36 states in Nigeria while hoping to cut down costs by delivering more efficiently. Next week will be the company’s first anniversary and Jumia will be moving into their new 8,000m² warehouse facility in Lagos.
Kehinde described online retail business as a high potential industry in Nigeria. “For us, we are giving Nigerians access to the goods they want in a way that makes it easier for them to get those goods.”
“In the next one year, we hope to double what we are today,” Kehinde added. “There is a good opportunity to increase the work force a lot.”
When it comes to finding successful business partners, both Kehinde and Afaedor advise others to partner with someone they are compatible with, and who have special skills that they can bring to the table.
“It’s like a marriage,” said Kehinde. “The mistake you can make is to go and hire a friend who has no idea about, in our case, marketing, sourcing of goods, delivering to customers. We always make sure that when we partner with someone, they are the best in their field and with a skill that you don’t have, so if you add that person to your team, they contribute.”
“There should be no egos,” added Afaedor. “You should look for somebody who is smart, and possibly smarter than you, and one you can actually lean on.”
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