Jumia, DHL and Alibaba face off in African e-commerce 2.0
The main task of launching startups into the African market is to digitize rapidly growing consumer spending. These costs are projected to peak by 2025 at around US $2 billion.
Version 2.0 of African e-commerce will focus on Internet services, keeping its old players, as well as attract new ones. This area will also enter the Chinese market.
Remember how the formation and development of this sphere took place. The birth of African e-commerce took place in Nigeria. That's where the earliest e-commerce appeared, which could be openly observed in the period from 2012 to 2016. During this period, a vivid struggle between the companies Konga, founded by a Nigerian Sim Shagaya and Jumia, which was founded by two Nigerians and two French. The duel between them was in competition for scaling up online shopping in Africa. At an early stage, it was like the mutual exhaustion of VC. The main question was who in all known difficult conditions could find enough capital to cover the cost of creating a full e-commerce market and its further capture.
Another serious problem for Nigeria was poor quality electricity. By the way, this problem is still relevant today.
Both companies had to pass on capital order transactions from many start-ups to third parties. This even involved their own services, such as delivery and payment with KongaPay and JumiaPay. They tried to change the range of products they sold, from mobile phones to diapers and also experimented with different kinds of Internet services, offering delivery of products or ads.
The rivalry in South Africa was also gaining momentum. Since 2011, major investors such as Naspers and the U.S. foundation Tiger Global Management have invested hundreds of millions of dollars in Takealot and Kalahari electronic retailers. However, this all ended in some way with Kalahari's main investor, Naspers, acquiring its direct competitor Takealot in 2014. Already in 2016, Kalahari was completely liquidated and Tiger Global, the main investor of Takelot, was bought out. As a result, Takealot now has the largest market share in South Africa and is the largest e-commerce site.
In 2016, Jumia was still more than twice ahead of Konga according to Alexa's rating (6 vs. 14). In 2018, the outstripped competitor reached a disastrous position and was bought back, thus falling out of the rivalry.
At the same time, Jumia expanded its horizons to sell a wider range of products in 14 African countries. It received its first major IPO on the American Stock Exchange in 2019, worth over US $200 million.