E-commerce in Africa Sam Chappatte Managing Director of New Countries - TCG Summit
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E-commerce in Africa Sam Chappatte European TCG Retail Summit Managing Director of New Countries April 2016
1 State of e-Commerce in Africa 2 Products & Brands who are winning today 3 How the model works 4 Q&A
Africa is going online at an astounding speed
Population Internet Users
(Bn) (M)
+17% +100%
1,4 700
1,2
350
2015 2025 2015 2025
Source: All statistics for target markets in 2014, estimated
Driven by uptake of smartphones…
Smartphone Mobile % of total internet traffic by country
Users (M) Nigeria 76%
India
+200% South Africa
Indonesia
Turkey
670 China
Japan
Spain
Philippines
Korea
Vietnam
UK 23%
Italy
USA
200 Brazil
Germany
Canada
France 14%
Russia
2015 2020 0% 20% 40% 60% 80%
Deloitte & GSMA Statistica, 2015
…and improvements in infrastructure
2018
…and improvements in infrastructure
There is a wide range of connectivity today
Africa avg World avg
250.000.000
Population size
200.000.000
Nigeria
150.000.000
100.000.000 Ethiopia
Egypt
50.000.000 South Africa
Kenya
Uganda
Morocco
0
0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% 80,00%
Internet penetration (% popn)
Largest African markets well ahead of others
Note: Bubble size represents size of internet population
Source: Miniwatts Marketing Group, 2015
Rise of the internet is changing Retail in Africa
Lack of retail + Rural areas with + Offline delivers + Online Retail
infrastructure no access to retail poor experience competitiveness
A great opportunity for e-Commerce
Just the start for African e-Commerce
TODAY
Retail Sales 505
?
(US$ Bn)
e-Commerce
Sales
1.5
!
(%, US$ Bn) 0.3%
Source: Retail sales online, Euromonitor, 2015
How big is e-Commerce for Consumer Electronics?
250M • Android
• Large screens (5”+)
• Long & fast charging
• 2 SIMs + 4G capability
• 120 USD avg. price
65M
60M
50M
Note: Estimated size of e-Commerce sales by category in Africa in 2015
How big is e-Commerce for Consumer Electronics?
250M • Smaller screen sizes
(32” LED best seller)
• Strong preference for
established brands
• Start of disruption
from new challengers +
Android OS Smart TVs
65M
60M
50M
Note: Estimated size of e-Commerce sales by category in Africa in 2015How big is e-Commerce for Consumer Electronics?
250M • B2C unstructured & low
penetration online
• 15”, 2G RAM, 500 HDD,
entry level processors
• Preference for established
brands, increasingly 2:1s
• Yet to be disrupted
65M
60M
50M
Note: Estimated size of e-Commerce sales by category in Africa in 2015How big is e-Commerce for Consumer Electronics?
250M • Small driven Local &
Challenger brands,
at entry price level
• Large driven by
established brands,
+ few new entrants
• Highly fragmented
65M
60M
50M
Note: Estimated size of e-Commerce sales by category in Africa in 2015Which Brands are winning in Africa?
3 types of brands Winners do 3 things
Local Kings Tailored product offering
• Incumbents where they exist • Affordable quality
• Eg. Condor, Scanfrost Flagship products
Challenger brands • Focus efforts on 2-3 products
• Value for money, growing rapidly • Don’t need exhaustive range
• Eg. Innjoo, Infinix, NASCO, AKAI Multi-channel strategy
Established brands • Use online to build brand and
• Quality, desired, more expensive pave way for offline sales
• Eg. Samsung, Sony, LG
Case study: Infinix (Smartphone)
• Highly competitive spec & price • Launched online exclusively, with
offering on flagship models (-30%) focused offline support
• Focus on 2-3 flagship models at • Now market leader in Nigeria
a time, low supply, regular launches (online & offline)Meet an African e-Commerce leader
Meet an African e-Commerce leader
11 COUNTRIES
4000 EMPLOYEES
600 MILLION POTENTIAL CUSTOMERS
BRANDS AT BIGGEST BEST CUSTOMER
BEST PRICES VARIETY EXPERIENCESales Customer Care Warehouse
Delivery Payments
Key numbers
>140,000 sq ft warehousing space
100% population reach in all markets
Products delivery within 1 to 5 days
Strong telesales & upselling expertise
Field force of 50,000+ agentsAfrican challenges require African adaptations
Trust InfrastructureAfrican challenges require African adaptations
TrustAfrican challenges require African adaptations Infrastructure
Long term relationships with brands is a priority for Jumia
Network of Top International Brands Jumia an Entry Point For Many Brands in Africa
▪ Launched exclusively on Jumia website
in Nigeria in Q4 2014
▪ Now #1 in Nigeria (online & offline)
▪ Launched exclusively on Jumia website
in Nigeria in May 20153 take-aways
1 African e-Commerce is an increasingly relevant opportunity
2 Challenger brands already developing strongly, established
brands are underweight
3 Existing online platforms can provide you low cost &
low risk accessQ&A Contact me: sam.chappatte@jumia.com
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