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Surviving the Harsh Realities of Setting up a Business in Nigeria: The Story of Jumia
Nigeria, despite being the largest economy in Africa, is one of the toughest places to establish small and medium scale businesses. This is because the economic environment is quite unfriendly as entrepreneurs have a potpourri of challenges to deal with. Some of these challenges include lack of power, limited capital, double taxation, unstable economic policies, and inadequate infrastructure among others.
Consequently, the chances of startups and businesses surviving are very limited or minute in Nigeria
Despite this, there are a handful of small businesses that are braving these harsh economic realities and have grown beyond their humble beginnings. They are now serving millions of customers across Africa. A very good example is Jumia.
How Jumia started
Every global business did not just scale within months of being established. It must grow slowly, raise capital, break even and eventually become profitable. It can take years to hit the point of profitability in a country like Nigeria.
Jumia is an eCommerce company founded by Jeremy Hodara and Sacha Poignonnec in February 2012. The company started operations in Nigeria and Pakistan that same year under the name Kaymu; after receiving an undisclosed amount of seed funding from Rocket Internet. Although Kaymu has been rested, the online platform has become an ecosystem that has different verticals including travel, food, house and cars.
Through the years, it has expanded operations to 14 African countries and does not seem to be soft-pedalling.
The impact of Jumia
When Jumia debut in Nigeria, there was nothing like eCommerce. It was completely a new business endeavour or field that had not been fully exploited. What even made a lot of people sceptical is the possibility of ordering goods online and it will be delivered at your doorstep. Impossible!
But Jumia drove through these hurdles and today the eCommerce platform has millions of customers.
Additionally, Jumia has empowered thousands of Nigerians through its J-force programme and vendors selling on the platform are smiling to the bank.
Since the beginning of 2019, it has been reported that famed online businesses have shut down or left the country. But, Jumia Nigeria’s no 1 shopping destination continues to steadfastly innovate and satisfy the needs of its esteemed customers.
Now the Alibaba of Africa
Alibaba is the Chinese eCommerce platform founded by Jack Ma. Over the years, Alibaba and the likes of Amazon and eBay have tried to enter into Africa but the groundworks that have been done by Jumia is making that entry very difficult. This is because Jumia keeps consolidating its market position in its key markets as well as innovating.
Hence, it was not a surprise when asked during an interview with the Africa Report that if Jack Ma or Jeff Bezos knocked on Jumia’s door with an offer they could not refuse, Sacha Poignonnec, the CEO of Jumia said: “I’d be very proud that they take the time to travel to us and see it. Certainly, we would have to think about it.”
The story Jumia is one of perseverance in a country where it is difficult for startups to survive. The startup is not relaxing as it has said it is here to stay and it is Afrocentric business focus will continue despite the many challenges.