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Jumia’s Expansion Plans Set to Dominate the E-Commerce Market in 2024

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Nigeria’s e-commerce scene is ever-growing, projected to reach $22 billion by 2024. But this digital revolution isn’t confined to bustling metropolises; it’s quietly transforming the lives of millions of consumers in secondary cities and rural areas. At the forefront of this rural e-commerce push is Jumia, Africa’s leading online marketplace. By strategically expanding beyond the bright lights of Lagos and Abuja, Jumia is connecting previously underserved communities with the vast array of goods and services available online, bridging the retail gap and empowering rural Nigerians like never before.

Prior to the creation of companies like Jumia that made it possible for consumers to shop without geographical restrictions, purchases of several commodities required lengthy trips, increased costs and risks that accompanied traversing unsafe roads. E-commerce has grown over the past decade with the increased penetration of smartphones and the internet. As of 2020, GSMA reported a mobile subscriber count of 173 million in Nigeria, indicating an 85% penetration rate. The prevalent use of smartphones enables consumers to conveniently access e-commerce platforms and make purchases from anywhere in the world.

Recognizing the growing number of rural Nigerians with internet access, the company embarked on a strategic expansion into secondary cities and rural areas. This involved establishing logistical networks, partnering with local agents and businesses, and tailoring product offerings to cater to the specific needs of rural communities. Jumia launched the JForce programme — a grassroots initiative launched by Jumia to take e-commerce to secondary cities within Nigeria  — to meet this need. Under the aegis of the JForce programme, Jumia has established efficient delivery infrastructure, including partnerships with local logistics service providers and leveraging community pick-up stations, reaching even the most remote villages.

Modifying existing strategies, Jumia combined online and offline operations to cater to both those who have access to the internet and those who don’t. Through this tactic, the company has taken e-commerce to hundreds of Nigerians in rural communities, where digital literacy is limited.

Leveraging the age-long art of marketing by mouth, Jumia, through its JForce initiative has bridged the digital divide in rural communities and increased accessibility to e-commerce. JForce adopts a very communal model – local sales representatives who are tech-savvy give community members who lack access to smartphones or are digitally illiterate access to product catalogues on the Jumia Marketplace platform and place orders on their behalf. Strengthening the pillars of JForce, Jumia simultaneously established more than 250 pickup stations and collaborated with reliable logistic partners to fast-track product deliveries to secondary cities and rural areas. The deliberate positioning of these pick-up stations in diverse towns guarantees accessibility to even the most remote corners of Nigeria, thereby enabling customers in rural areas to overcome geographical limitations and access various products. This initiative has been a vital way to enable many rural communities to leapfrog economic and geographical barriers, stimulating growth and development with target communities and the e-commerce sector.

But the communities are not the only beneficiaries. Through JForce, Jumia works with local entrepreneurs, training them as agents to facilitate online purchases and deliveries, creating jobs and fostering economic growth within the communities. To date, Jumia has over 35,000 active JForce agents who earn a living through commissions earned from introducing consumers to shop online.

Transforming Lives, One Click at a Time

Jumia’s impact in rural Nigeria is undeniable. Families can order essential items directly to their doorstep, saving them time and money. Jumia’s “E-Commerce in Rural Areas in Nigeria” report highlights these positive changes. It reveals a significant rise in online purchases from rural areas, with a growing demand for smartphones, home appliances, and fashion items. The report also showcases the positive impact on rural entrepreneurs, with many Jumia agents reporting increased income and business opportunities.

Challenges and the Road Ahead:

Despite the success, challenges remain. Limited internet connectivity and digital literacy in some rural areas can hinder adoption. Additionally, reliable electricity supply and efficient payment systems are crucial for sustained growth.

Jumia is actively addressing these challenges. Last year, the company partnered with Starlink, a satellite internet service, to retail the Starlink Residential Kit in Nigeria to bridge the digital divide by delivering Starlink’s high-speed, low-latency internet to previously underserved regions.

In the third quarter of 2023, Jumia experienced significant growth in Gross Merchandise Volume (GMV) for physical goods across five countries, a surge that can be partially credited to its intensified expansion into rural areas and secondary cities. With the recent appointment of a new CEO in Nigeria, the company’s focus is on driving expansion initiatives across the country, aiming to replicate the successes observed in those five countries. Doubling down on this expansion strategy, Jumia aims to broaden its reach, linking more consumers to the e-commerce sphere, extending beyond the confines of major cities and into previously untapped regions within the country.

With pillars for growth and expansion solidly set in place in 2023, it is left to be imagined what the e-commerce leader will achieve this year.

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Doing Business in Nigeria: Interswitch Founder reiterates need for focus on business’ unit economics

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As Nigeria, arguably one of the principal economic powerhouses of Africa, continues to attract global attention against the odds as a destination which cannot be ignored for investment and business opportunities, the 2024 edition of the ‘Doing Business in Nigeria Conference’ which held on Saturday 13th April in Lagos, the nation’s commercial capital served as a pivotal event for entrepreneurs, investors, and business leaders seeking to tap into the country’s vibrant business landscape. Delivering a keynote on the theme ‘Doing Business in Nigeria: The Opportunities, Challenges and Realities’, Interswitch Group Founder and Chief Executive Officer, Mitchell Elegbe set the tone for deliberations at the conference, sharing robust insights and perspectives hinged on over 22 years operating in Nigeria, from where the company has expanded into other African markets, being in the driver’s seat of one of Africa’s most influential digital technology businesses. Among other incisive pointers, Elegbe walked participants through the dynamic trajectory of Interswitch’s business operations, starting from 2002 when key infrastructural elements such as power and telecoms were at a nascent stage. The Interswitch Founder acknowledged that Nigeria is probably not one of the easiest markets in the world to do business, however stressing that compelling business opportunities exist only where there are challenges, pointing out that regardless of the challenges and constraints in the local operating environment, some particular industries and sectors have consistently bucked the trend and shown great promise. In his view the performance of these outliers is attributable to factors such as the ability to adapt and innovate within the local market hinged on pragmatism and nimbleness, understanding of consumer behaviour and agile responses to changing business landscapes. According to Elegbe, who set things in context through the lens of fintech businesses, there are significant differences between the typical Silicon Valley business model and what is necessary for sustainable success in a market like Nigeria, particularly in the current global investment climes. In his words, operating in the Tropical Savannah that Nigeria is, as he described it, warrants the business to ensure products/services are designed to meet people at their points of need, whilst essentially ensuring proof of concept, focus on unit economics and scaling to achieve volumes in spite of thin margins, with a view to driving profitability as an early priority. He emphasized that Unit economics are instrumental in evaluating the economic sustainability and profitability of the business model, providing insights into whether the business is generating sufficient value to justify the associated costs. Other keynotes were delivered by Wole Adeniyi, The Chief Executive Officer, Stanbic IBTC Bank, who was represented by Olu Delano, Executive Director for Personal and Private Banking as well as Binta Max-Gbinije, Chief Executive, BMG Seven Limited, each bringing unique perspectives and expertise to the discussions. The conference agenda was thoughtfully curated to address key themes and topics relevant to doing business in Nigeria, with sessions covering market entry strategies, regulatory compliance, risk management, investment incentives, innovation, and sustainability, among other salient themes. Beyond the informative sessions and workshops, the Doing Business in Nigeria Conference 2024 provided platforms for networking and collaboration, including a business pitch session targeted at emerging entrepreneurs.

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Interswitch Kicks Off InterswitchSPAK Nigeria 6.0: Calls for Registration, Doubles Value of Winnings

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Interswitch, Africa’s leading digital payment and commerce company, has announced the commencement of the sixth edition of its annual National Science Competition, InterswitchSPAK, in Nigeria with a significant boost in prize monies and added incentives for more participants, as the company doubles-down on its long-term support for STEM advancement across Africa. The competition, a Corporate Social Responsibility (CSR) initiative of the Interswitch Group, now in its 6th edition in Nigeria (and 5th edition in Kenya, where it also runs) aims to foster interest in Science, Technology, Engineering, and Mathematics (STEM) subjects among senior secondary school students across the country. Schools in Nigeria can now register up to twenty (20) SS2 Science Students each, marking an unprecedented scale of participation. Registration for students will be open until May 10th, 2024, and it is free of charge to all applicants. The qualifying examination is conducted entirely online, allowing candidates to take it from the comfort of their school, home, or any convenient location. The Computer Based Test (CBT) exams are scheduled to hold from Tuesday, May 14th, to Saturday, May 18th, 2024, from 8 am to 6 pm daily. Participants have the flexibility to choose the most suitable day, time, and venue for their exam, with two trials available. Following the online qualifying examination, the top 81 students will proceed to the semi-finals and finals to compete for the coveted title of Nigeria’s Best STEM Student. This year’s edition, with a prize pool of over 30 million Naira, marks a 140% increase from the erstwhile 12.5 million Naira in prize winnings, demonstrating Interswitch’s unflinching commitment to educational development by doubling cash prizes for winners. The first prize winner will receive N15 million tertiary scholarship spread over 5 years, a laptop, and monthly stipends. The second-place winner gets N10 million spread over 3 years and a laptop, while the third-place winner will get N5 million for 1 year. In addition to the top three prizes, cash rewards are also available for the participants who secure the 4th to 9th positions. Furthermore, the top 18 semi-finalists will also receive cash prizes. The competition also recognizes the contributions of teachers and offers cash rewards for the top 27 contributing teachers. Interswitch will also purchase JAMB e-PINS for the top 200 preliminary qualifiers to enable them register for the Joint Admissions and Matriculation Board (JAMB) examinations free of charge. Speaking on this year’s edition of the competition, Cherry Eromosele, Executive Vice President & Group Chief Marketing and Communications Officer at Interswitch Group said “We are excited to kick off another edition of InterswitchSPAK, the 6th in the series in Nigeria, and this year promises to be bigger and better than ever before. By doubling the prize pool and expanding opportunities, we are not only investing in the winners but also in the entire ecosystem of STEM education. We are thrilled to see the impact this initiative has had over the last 5 editions and look forward to witnessing the brilliance and innovation of Nigeria’s young minds in this year’s competition”. The last edition saw Abraham Daramola, a student of Hallmark Secondary School, Ondo State, emerge as the winner, while the duo of Emmanuel Omoegbeleghan from The Crescent International School, Ogun State, and Emmanuel Angelo-Hyuwa from The Ambassadors College, Ogun State, came second and third, respectively. Secondary schools are hereby advised to visit the InterswitchSPAK portal to register their best science students in Senior Secondary 2 (SS2) for the competition. All eligible students and schools are encouraged to visit the website, www.interswitchspak.com, for more details on how to participate in the competition.

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Ecobank MySME Growth Series: Proper Packaging and Basic Certification are Critical for SME Exports, Says Expert

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Lagos, April 9, 2024 – Small and medium enterprises (SMEs) in Nigeria have great potentials and opportunities to earn foreign exchange (forex) if their products are well branded and packaged to meet international standards. Managing Director/Chief Executive, Export and Sell Limited, Nduka Udeh made this submission in his presentation titled: Earning FX By Exporting to USA and Canada, delivered at the Ecobank MySME Growth Series webinar. He stated that it was important for exporters of SME products to take into consideration the nature of their products while packaging and making shipping arrangements as well as an effective use of multi sale channels in US and Canada. According to him, many foreign markets particularly, United States and Canada are interested in Nigerian products and the SMEs can gain greater penetration in these markets that have huge potential but sadly most of their products are often rejected because they are not properly packaged and lacked necessary certifications. “SME products from Nigeria have great potentials in the export market. However, over 70% of food products are held at entry points because exporters don’t pay attention to packaging, local licensing and certifications needed to meet US specifications. The right process can save you so much. Exporters should pay attention to products that would give them maximum profitability, low shipping costs and effective distribution channels. It is important for them to be familiar with the African Growth and Opportunity Act (AGOA)”, He said. Mr. Udeh who is also Chairman of African Import Export Solution, Houston, Atlanta, US advised exporters to explore the opportunities provided by Ecobank and his firm to train and support them on how to navigate the export market, adding that their products are in high demand, and they stand the chance to earn huge foreign exchange. Ecobank MySME Growth Series which started in February this year is designed to empower SME operators across the country. It is part of the bank’s commitment to train over 1 million SME operators in various sectors of the economy in 2024. The training will provide resources for starting a business, registration processes, industry statistics, and essential considerations for running a business. The series cover key topics such as accounting, credit, sales & marketing, taxation, and inventory management. Additionally, articles on key topics like increasing sales, advertising ideas, business management practices, case studies, and leveraging technology will be provided. Ecobank also plans to launch an SME Mentorship program to collaborate with successful entrepreneurs. Taken together, the MySME Growth Series reflects Ecobank’s dedication to fostering growth and success within the SME community.

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