Despite recession, Covid-19, e-Commerce will still be here

Massimiliano Spalazzi, Jumia Nigeria CEO, in this interview with SEYI JOHN SALAU talks about e-commerce in the era of Coronavirus pandemic, saying that forward-looking businesses will excel rather than go down, as they innovate in line with the changing times. He expresses the optimism that Jumia has come to stay and will always render quality services to its customers. Excerpts:

Businesses are facing serious challenges at this time due to the Coronavirus (Covid-19) pandemic, which hit the global space; also, Nigeria recently crept into a recession, among other obstacles. Do these pose any challenge for e-commerce operations in Nigeria?

I think we need to split the macroeconomics and what is happening online. So, I’m clear of the view that the situation is hard for many businesses, but at the same time the penetration of e-commerce in the country is actually increasing by the day. So, I would say that the key impact of the current recession on e-commerce is probably a slower growth, which is contrary to what was forecast. Not to cut numbers, but I recently read an article about the penetration and the increase of mobile subscriptions in the country, which means that more subscribers are actually using phones to engage Jumia platform, it’s a really powerful moment and potential for growth for brands to come from offline to online. So, answering your question; it’s a tough time, but e-commerce is growing and that’s why probably more brands and vendors are dealing online now.

There seems to be a record of low patronage of brick and mortar stores; what impact does e-commerce have on this?

For us, it’s more like a change; we can’t say that things are not fast actually, but rather maybe a change in what people have been buying. So, right now, online, they are buying foodstuffs like rice, which is very expensive in the market and we offer some great deals on the platform. I would admit that the amount of excitement that there was last year, for example, the needs to acquire devices like laptops, phones, televisions are not as profound this time around. Nevertheless, the platform has been consistently growing. Jumia is putting in good work with local vendors offering them more engagements for the goods and services they offer.

What is your view about e-commerce during the last nationwide lockdown due to Covid-19 pandemic?

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What we have seen last year has been how relevant and important e-commerce was in serving the population during these tough times. We’ve seen many different situations happen from the Covid-19, which obliged people to be locked down and having to purchase their goods in a safe way. On the other hand, as a result of the fostering of local businesses online, they can make more sales now because of less dependency on the dollar. I think all of these have been happening in an advanced system, which is good for Jumia and is still happening online. What we saw also was that people wanted to start using Jumia Pay, they found a lot of safety in it because of our push towards contactless payment with Jumia Pay and ensuring that these customers use it. I think we’ve experienced a tough year, absolutely, but a very relevant year where e-commerce, I will say, helped out.

How, are the vendors reacting to these changes, and has there been an increase or decrease in sales since the campaign began?

There is inflation in the market, but at the same time it’s a moment in the year where consumers are coming onboard; November and December because of the festivities, Black Friday and then Christmas. Vendors who understand this also understand the potential of e-commerce. Let’s keep in mind that this year has been very important for brands because we did see a shift in their interest and much more focus on what’s happening online and in the e-commerce sector. Every brand started doing their marketing and commercial e-commerce strategy and started thinking with Jumia on how to achieve this strategy. But, then they understand that the biggest numbers of consumers are actually ready to buy during this period. Vendors understand the importance of giving the right prices and offerings to the consumers. So, I would say, to a fault sometimes, of course, you have to adjust the price and understand the trend and also understand that volumes will make a difference, which is what’s happening now with Christmas sales. They maintained the prices and people have been really happy about it.

From your experience, there’s this transition of moving an offline business online; do you encourage vendors to trade on Jumia platform?

Absolutely; this has been a trend that started in March 2020 and kept ongoing throughout the year. There’s the first part of this trend where we simply endorsed vendors for regular online selling on Jumia, they understood what is actually happening; there’s an increased growth of digitalisation happening both for the consumers and vendors. I noticed that quite a number of vendors were selling essential goods and day to day needs; groceries and the likes. It was also discovered that some vendors and also most of the big brands did not have a strong online presence. They started shifting to e-commerce faster in the second half of the year. Presently, we have wonderful conversations with brands thinking about what we can offer this year. Some of the examples to make you understand how fast this is going and how we are adapting to the consumer needs of our vendors now is a kind of offer we are giving not only in our prices, but also their official needs, which brands are responsible for, like good quality products, which is really appreciated by customers, thereby creating engagement and as a result, all parties are very happy.

A trend that gained more traction among Nigerians during the pandemic is the online food delivery market. How did COVID-19 impact the business and how did Jumia Food support this segment?

Many people will rely heavily on having their hot meals and groceries delivered at their doorsteps, as against going out to offline retail stores to purchase. The government of each country continues to deal with the pandemic in the best ways possible. Yet, even after the pandemic is gone, the convenience of food delivery will still hold such a great appeal. More consumers will therefore look to Jumia as a reliable alternative to staying safe and saving money. Local Nigerian meals will continue to be among the top three cuisines being ordered because of its affordability and appeal to the local communities. Subscription model will change as many food vendors will partner with existing models such as Jumia Prime. The adoption of contactless payment via JumiaPay will increase as many consumers will be more safety conscious.