• Thursday, February 29, 2024
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Nigeria’s online retail market expands as Jumia raises $35m


There is a flurry of activities in Nigeria’s online retail markets in the mould of new investment drive, strategic partnerships, all geared towards taking advantage of the country’s budding middle class and massive online population (45 million internet users).

Jumia, an online retailer in Nigeria, has raised $35 million in fresh funding from Millicom to expand its domestic market and move into a new 90,000 square foot warehouse located in Lagos, according to a report on Monday.

According to a report by Euromonitor International, a global market research organisation, Nigerians spent N62.4 billion shopping online in 2011, up from N49.9 billion in 2010. This represents a 25 percent growth rate in one year.

This growth is an indication of the potentials in e-commerce. Jumia which celebrated its first anniversary yesterday serves over half a million customers in Nigeria to date. The new milestone means that Jumia is now the fourth most visited Nigerian website.

“We started with three employees building up an e-commerce platform in Nigeria,” Raphael Afaedor, co-founder of Jumia, was quoted in the report. “Now, we have more than 500 employees and offer Nigerian youths great opportunities to work in one of the leading e-commerce firms in Africa.

“Jumia delivers the widest range of products in the country and our new warehouse allows us to even grow further.

“We focus every day on delivering a fantastic shopping experience for our customers – fast, secure and stress-free.”

At least 500 employees will be based at the warehouse in Lagos, although it’s not clear if this will consist of new or existing staff. Regardless, the company claims that it will be the largest e-commerce campus in West Africa, which is no small feat. To coincide with its first anniversary, Jumia is also announcing a new partnership with Mastercard, which will enable it to use the company’s Internet Gateway Service to make credit card payments safer and easier for its users.

Jumia is also entering exclusive partnerships with high-profile technology companies such as Dell, Intel and Nokia, which will give the retailer access to exclusive products and some knock-down prices. Jumia’s growth over the last year highlights the increasing demand for robust e-commerce options in the region. The company is celebrating the one-year milestone with an electronic commerce conference, a number of special fashion events and all sorts of changes to its website, which will include new discounts and product partnerships. The $35 million in funding secured from Millicom will be shared between Jumia and its partners Kaymu, Vamido and Hellofood.

The company was originally launched by Rocket Internet, the German e-commerce startup incubator started by the Samwer brothers. The funding from Millicom is perhaps not surprising, given the company closed a deal last summer which means it can claim 20 percent of two holdings owned by Rocket Internet – Latin America Internet Holdings (LIH) and Africa Internet Holdings (AIH). Outside of Nigeria, Jumia is already active in Egypt and Morocco, and it’s likely that expansion will continue with this fresh batch of funding. Alongside Namshi and Zando, Rocket Internet looks dead-set on leading the electronic commerce boom throughout Africa.