GLOBAL MANAGEMENT

GLOBAL MANAGEMENT

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1)  What kind of institutional voids are there have existed in the e-commerce of Nigeria before Jumia?

How have Jumia addressed opportunities and challenges in those institutional voids?

2)  compare and contrast the difference between the online retail model and the marketplace model?

3) How is the marketplace business model the solution to Jumia’s profitability issue that Jumia is facing? Or does it?

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Professor Ramon Casadesus-Masanell and Associate Director Namrata Arora (India Research Center) prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2017, 2018, 2019 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800- 545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

R A M O N C A S A D E S U S – M A S A N E L L

N A M R A T A A R O R A

Jumia Nigeria: from Retail to Marketplace (A) On an exceptionally cold evening in Paris in January 2016, Jeremy Doutté (HBS MBA ’12) and Nicolas

Martin, co-CEOs of the Jumia Group, and Juliet Anammah, CEO of Jumia Nigeria (Jumia), headed to Charles de Gaulle Airport after an exhausting Jumia Group board meeting. The trio contemplated the four-year roller coaster that had been Jumia’s experience in the Nigerian e-commerce industry.

In 2012, Jumia entered the nascent market and immediately enjoyed an uptick in consumer spending fueled by the strength of Nigeria’s oil-based economy. By 2016, however, Jumia’s growth had begun to taper, hindered by plummeting oil prices, the subsequent economic downturn, and the pressure of Nigeria’s limited retail ecosystem. In addition, Jumia’s inventory-intensive retail model required significant infusions of capital that, in the face of a deteriorating economy and the company’s inability to show a profit, was becoming increasingly difficult to obtain. Considering all this and looking to the success of the Amazon and Alibaba marketplace models, where third-party sellers largely carried inventory costs, the board had made a drastic decision: Jumia would shift from an online retail model to a marketplace model. The board also made it very clear that a failure to properly implement this transition could mean the end of investor support for Jumia. The nature and length of the board meeting led to a quiet taxi ride and somber airport check-in. However, as the plane headed south toward the Mediterranean, the trio began planning the transition.

Jumia was a startup effort by Germany-based Rocket Internet, which aimed to become an African Amazon. Jumia developed a retail-based model, maintaining warehouses and inventory of international and local brands. In the process, it became one of the largest e-commerce companies in Nigeria, employing 380 people, delivering products to customers in six Nigerian states, and raising funds in excess of US$230 million from international investors. However, Jumia was not the only company looking to capitalize on the middle class’s growing consumer confidence. Konga, a similar online retailer, was close on Jumia’s heels with a marketplace model, using its platform to connect third-party buyers and sellers. By 2016, the battle for market dominance showed no signs of ending, further complicating matters for Jumia.

As the plane began its descent over a balmy Lagos, Doutté, Martin, and Anammah were preoccupied with thoughts of how they would meet the challenges ahead. While Amazon in the U.S. and Alibaba in China had found success with the marketplace model, they wondered if Jumia would be able to do the same. Was this the right model for the very different Nigerian environment? Would vendors, many of whom already had retail operations in the country, choose to sell through Jumia? How could Jumia

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continue to provide the same high-quality customer service on which the company’s success had been built, while switching to a marketplace model in which parts of this critical aspect would now be in the hands of third parties? While they each had reservations about the shift, Doutté, Martin, and Anammah knew that Jumia had to adapt to the changing Nigerian business landscape at this critical juncture. At issue now was how to blend the strengths of Jumia with the opportunities of a marketplace model.

The Nigerian Economy Nigeria, a nation of 182 million people on the western coast of Africa (see Exhibit 1), had for most

of its postcolonial history been plagued with ethnic conflict, poverty, poor governance, and instability. Following its independence from Britain in 1960, Nigeria’s multiethnic and multilingual population— the largest and most diverse in Africa1—endured successive military governments. However, the adoption of a new constitution in 1999 marked the beginning of a sustained period of democratic governance. Economic growth followed this newfound political stability that culminated in the widely lauded March 2015 election, which witnessed the first-ever peaceful transition of power, from the long- ruling People’s Democratic Party to the All Progressives Congress.2 By the end of 2014, Nigeria boasted a $568 billion gross domestic product (GDP), abundant oil reserves, and a diversified economy that dominated the African continent. (See Exhibit 2.)

In 2015, following seven years of sustained growth, Nigeria began sliding into a recession. By the end of that year, the country’s GDP had declined to US$481 billion. The oil sector and related exports, which were the largest source of government revenue and the greatest focus of foreign direct investment, faced a 40% decline due to a slump in global oil prices. This downward cycle impacted other areas of growth including services, agriculture, and manufacturing.3 The subsequent reduction of government revenue resulted in the number of unemployed and underemployed together reaching 29.2%,a inflation rising to 9.6%, and consumer spending declining significantly.4 While the naira was officially pegged to the U.S. dollar, the government often restricted access to foreign exchange during a recession to prevent devaluation of its currency. In the absence of adequate supplies of dollars in the official market, businesses were forced to buy currency on the parallel market, increasing the spread between official and unofficial rates by as much as 35% in December 2015 (see Exhibit 3).

The economic decline impacted Nigeria’s domestic stability since it limited the government’s ability to respond effectively to security-related challenges, including insurgency in oil-producing regions and Boko Haram’s terrorist campaign in the north. Crime, particularly in urban areas, was also an increasing concern.5 A 2013 survey of over 11,000 men and women living across Nigeria indicated that 25% of those surveyed had been victims of a crime in the previous year, while 72% feared becoming victims of crime in the future.6 This insecurity also impacted the country’s economic competitiveness. Nigeria ranked toward the bottom of 140 countries surveyed in the World Economic Forum Global Competitiveness Index, at 135 in terms of the business costs of terrorism and 125 in terms of crime and violence.7

Despite these economic and social challenges, Nigeria remained a nation of dynamic entrepreneurs. Faced with inadequate regulations, limited formal employment opportunities, and a government

a A combined rate for the unemployed and underemployed has been provided to reflect changes made by the Nigerian National Bureau of Statistics (NBS) to its method for determining the country’s unemployment rate. In 2015 NBS began recognizing those economically active Nigerians working 40 hours or more per week as employed and created a separate category of underemployed for those working 20–39 hours per week. Those working fewer than 20 hours per week became the only recognized unemployed, significantly reducing the reported unemployment rate to 10.4% instead of the 29.2% it would have been under the old methodology. See NBS, “Unemployment/Underemployment Report Q4 2015”; and “Factsheet: How Nigeria’s Unemployment Rate is Calculated,” researched by Tolu Ogunlesi, Africa Check.

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constrained by economic recession, Nigerians created a vibrant economy of small businesses that powered the country’s large informal sector. This could be seen in the pervasive street hawkers and sprawling markets throughout the country. It was also apparent in the considerable number of formally employed Nigerians who also carried out side businesses. By 2015, the country’s informal sector made up 41% of GDP. Agriculture, arts, entertainment and recreation, and real estate and trade were among those sectors with the largest percentages of informal businesses.8

The Nigerian Retail Landscape

Demographically, Nigeria was a very attractive consumer market. Economic growth from 2010 to 2015 had created a growing middle class and a populace of young urbanized professionals, both with disposable income and eagerness to purchase newly available consumer goods and services.9 Over this period, household consumption increased 23.4% per year, the second-fastest growth rate in Africa.10 Despite these trends, by 2015, 98% of Nigeria’s retail transactions were still conducted through informal channels such as open-air markets and street stalls (see Exhibit 4).11 The number of modern retail outlets in Nigeria remained small due to high real estate costs, difficulty securing clean land titles, poor infrastructure, and limited local building materials and skills.12 For example, at $90 per square foot, commercial real estate in Lagos was more expensive than in New York City ($76/square foot) or Johannesburg ($19/square foot).13 The cost of setting up a formal business in Nigeria was also very high. The country ranked in the bottom 15% of the World Bank’s survey of 189 nations in terms of registering property, getting electricity, and dealing with construction permits.14 For the few international-standard malls that existed, the traffic and exorbitant prices often kept consumers away. In addition, retailers were constrained by the lack of locally manufactured goods that would appeal to sophisticated Nigerian consumers. In fact, most consumer goods sold in the country—from televisions to mobile phones to clothing—were imported. Meanwhile, the weakening naira, poor infrastructure, and administrative challenges at the country’s ports made importing such goods difficult and expensive for most traditional retailers. These obstacles presented an obvious opportunity for online retailers who could provide a broad selection of products, enable price and item comparisons across several suppliers, and offer convenience of purchase.

By 2016, online commerce had started to take hold in Nigeria. With an 85% mobile penetration rate, Nigeria was leading Africa’s mobile technology revolution.15 Due to the popularity of smartphones, internet adoption hovered around 50% and was expected to rise in the coming years. The Nigerian e- commerce market had players in a variety of categories including general merchandise, fashion, real estate, travel, groceries, and food. Jumia Nigeria and Konga—both general merchandise e-retailers— were the most popular. By 2015, with internet retail valued at US$171 million, Nigeria was the second- largest internet retailing market in sub-Saharan Africa after South Africa.16 (See Exhibit 5 for comparative statistics on Nigeria’s retail market.)

Despite the growth in e-commerce, Nigerian firms faced structural challenges ranging from security to logistics and corruption. Anammah remarked, “The absence of numbered addresses in most Nigerian cities required a complicated and expensive system of coordination between e-commerce retailers and their customers through phone calls, text messages, and popular communications applications like WhatsApp to ensure on-time delivery of products.” The most significant roadblock was gaining consumer trust. Cybercrime was a serious concern for operators, regulators, and consumers, as Nigeria had developed an infamous global reputation as a base for online and email-based scams.17 (See Exhibit 6 for an example of an email scam.) In 2013, such scams were estimated to have resulted in consumer losses of up to $12.7 billion.18 Doutté summarized the challenge this lack of confidence posed, saying, “E- commerce in Nigeria faced a double-edged sword—not only did we have to get customers onto our site, but we had the daunting task of shifting consumer mindsets from utter distrust to blind trust.”

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Jumia in the Early Years The Jumia Group, originally known as the African Internet Group (AIG), began operations in Africa

in May 2012 with an initial investment from Rocket Internet, a Germany-based incubator and venture capital firm.19 At the time, Rocket Internet’s model was to deploy young MBAs from the world’s top business schools and consulting firms to replicate tested business models in developing markets. Rocket Internet’s portfolio spanned Southeast Asia, Africa, and the Middle East, and included companies within the food and grocery, fashion, home, and general merchandising sectors of the retail market.20

Jumia was launched with a vision to “revolutionize the shopping experience in Africa.” The company started operations in Nigeria and Morocco and expanded to Egypt and Kenya within a year.21 Facilitating expansion was the fact that many Africans were familiar with the e-commerce model. A Jumia customer explained, “Most Africans have a relative who has lived abroad, so we were used to ordering things online and having our families carry them back to Nigeria for us. We were waiting to have the same service provided here at home.”

When Jumia was founded in early 2012, Raphael Kofi Afaedor (HBS MBA ’09) and Tunde Kenhinde (HBS MBA ’11) served as managing directors of Jumia Nigeria. Kehinde, a 28-year-old Nigerian, had bucked the brain-drain trend and returned to Africa after receiving his MBA and working in the U.S. and Europe.22 Afaedor was a 36-year-old Ghanaian entrepreneur with experience in agribusiness and banking, and with the European internet giant Monster.com.23 Jumia ecommerce was part of Africa Internet Holding (AIH). Jeremy Hodara and Sacha Poignonnec served as co-CEOs of AIH.24 They had previously spent seven and five years, respectively, as consultants at McKinsey.25,26

Entering the more-or-less untouched Nigerian market, Jumia’s early growth was impressive. On founding, Jumia Nigeria had three employees and averaged a one-week delivery time on orders. By May 2013, it was a 350-employee operation that offered two-day delivery in six Nigerian states and had 50,000 SKUs that represented brands including Samsung, LG, Blackberry, Nokia, Ralph Lauren, and Zara.27 The company was also well funded, having raised US$231 million from investors. (See Exhibit 7 for detailed funding received by Jumia over time.) Kehinde explained the secrets to Jumia’s success: “One is that our investors not only gave us access to funds, but also to a deep network of players in the Nigerian retail ecosystem. And the second is that we were able to recruit top-shelf talent from the best universities in the world.”28

In early 2014, Kehinde and Afaedor moved on to start other e-commerce businesses,29 turning the reins of Jumia Nigeria over to Jeremy Doutté and Nicolas Martin, who became its co-CEOS. Doutté, who was raised in France and worked briefly as an associate with McKinsey in Paris, began his career with Jumia immediately after his HBS graduation, first as Managing Director (MD) of Jumia Morocco and then as MD of Jumia Egypt. Martin, an MBA from INSEAD, had joined Jumia after working for eight years with McKinsey in Paris.30

African business analysts debated the reasons for the transition of power to expat executives. Some argued that after using local entrepreneurs to get the business off the ground, Jumia wanted foreign leadership, which was at its peak in the beginning of 2015, to oversee its growth. However, considering that neither Doutté nor Martin had sub-Saharan Africa experience, others questioned whether they were simply placeholders until more appropriate local talent could be found.31 The gap in local talent fueled demand for expat managers who were highly skilled but often transient and expensive. Doutté remarked:

Initially Jumia had little choice but to hire expat managers. But soon we began to wonder if we were letting a candidate’s command of English be a bigger decision point than their potential. It was easy to get comfortable with an international candidate who spoke great

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English, but one had to go beyond that. We also realized that a glass ceiling was being created where local talent felt that only expats were suitable for leadership positions.

Jumia continued to recruit expat talent, but also began to identify high-potential local hires. These employees received mentoring, training, and support directly from the company’s senior expat management. Eventually, the commitment to developing local talent paid off. In December 2015, the company announced that Juliet Anammah, a Nigerian with 25 years of management and consulting experience, most recently as a partner at Accenture, would take over as CEO.

Retail-Led Business Model Jumia followed a retail-led business model that had almost the same economic characteristics as the

traditional brick-and-mortar store when it came to inventory risk exposure, warehousing, and sourcing. It purchased products directly from vendors, stocked those products in its warehouse, and resold them directly to customers through its online platform (see Exhibit 8 for a diagram of the retail model). Since Jumia maintained volumes in its inventory, it was able to negotiate better prices from vendors that eventually translated into higher margins. Jumia’s vendor segment was largely made up of successful offline distributors with significant transactional experience in Nigeria (see Exhibit 9 for a profile of select vendors for Jumia). Due to vagaries in the value of the naira, payment terms tended to be not more than 90 days. Delving further into the key characteristics of the model, Anammah noted, “First, whatever products were being purchased from Jumia, we had those items in our inventory stock. Second, Jumia was the only seller for each product sold on its website. Third, Jumia was liable by the bank to process customer payments, and invoices to customers were issued in the company’s name.” The company also felt that the fragmented retail landscape in Nigeria lent itself to the retail-led model. Anammah explained, “Nigeria was a supply-constrained market. There was ample demand for products but not enough products to process the demand. Having full control over the inventory allowed us to have greater visibility into our stock level, minimized the likelihood of accepting an order that we could not actually fulfill, and optimized dispatch and delivery times.”

Building a Logistics System

Jumia initially explored the possibility of partnering with either international players like DHL and FedEx or local providers for its logistics. Explaining why these attempts proved futile, Apoorva Kumar, Chief Operating Officer (COO) of Jumia, said, “Courier companies on the ground didn’t have the structure, interest, or capital to scale and meet our growing requirements.” In addition to the lack of appetite of existing players, Jumia was acutely aware of the logistical challenges inherent in the Nigerian market. Anammah noted, “Nigeria’s urban traffic was infamously congested, and access to smaller towns relied on poorly maintained roads. Additionally, home delivery required customers to be home to accept deliveries, make cash on delivery (COD) payments, and prevent left packages from being stolen. We knew what we were up against.”

In the face of these challenges, Jumia decided to build its own logistics system. This involved investing in logistical infrastructure that comprised trucks, delivery vans, and motorbikes; renting warehouses and distribution hubs; and hiring over 1,500 employees to be a part of the logistical team. Jumia implemented a hub-and-spoke distribution model built around its flagship 90,000-square-foot warehouse in Lagos. The main warehouse facilitated initial sorting and packing before goods were transported to one of Jumia’s pick-up stations, which averaged 5,000 square feet in size. Customers were able to select home delivery or retrieve their products from a “pick-up station,” with 20% of them choosing the latter option. Customers who picked up their products at a station did not have to pay the delivery fee. The pick-up stations also solved the problems of unclear addresses, difficulty in

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contacting customers, and overall uncertainty regarding delivery completion. Jumia leveraged technology to develop systems to determine the best pick-up station locations, monitor traffic movements, accurately track packages, and provide text message notifications to customers several hours before delivery. The company also worked with third-party locations such as hotels to form pick- up stations across the country. By the end of 2015, it had 100 pick-up stations and had achieved five- day delivery in rural areas and next-day delivery across city centers. (See Exhibit 10 for images of Jumia’s warehouse, a last-mile hub, and a delivery truck.)

Payments

By the end of 2015, COD constituted 85% of payments made by Jumia customers. Given the small presence of internet banking, low credit card penetration rates, and the prevalence of online fraud, most Nigerians preferred to pay with cash only after receiving and evaluating the promised goods. Kumar explained, “For an online payment, a customer had to go through at least three steps of verification, including mobile-based authorization. Even then they ran the risk of payment failure for an unknown reason. The COD option was one simple click.” Despite its popularity, COD brought its share of challenges for Jumia. With COD orders, customers needed to be physically available to receive the goods in order to provide payment. Oftentimes the consumer was not available, which meant that multiple delivery attempts were made for one order. Other problems, such as customers not being satisfied with the product upon purchase and refusing to make the payment, were also common. Finally, COD placed added risk on the safety of Jumia’s delivery agents. Anammah explained, “Our delivery agents would deliver items around the city, collect large sums of cash payments, and then deposit those payments in our bank account at the end of the day. In the back of our minds we worried, what if something went wrong?”

Technology

Throughout its evolution, Jumia had always placed a premium on technology. In 2015, the company invested between $50 and $100 million in building out its website, customer service unit, payment- processing system, and warehouse operations. Much of Jumia’s technology was built to enhance customer service. Website personalization, for instance, included a personal welcome message during log-in and customized special offers and product suggestions. Anammah said, “These features exposed our customers to a ‘best-in-class’ shopping experience. We made it easy and convenient for our customers to shop with us and raised the costs of their switching to our competitors.” The company placed great emphasis on the use of technology to create a better shopping experience, boost customer satisfaction, and generate sales. Doutté said, “A key source of competitive advantage for Jumia has been in data analytics—we have created information around vendors, products, and consumer behavior in an information-starved market.” By tracking and saving customer information and purchase choices, Jumia was able to build a database of product and customer information that supported many of its data-driven functions. These included using product demand to determine vendor acquisition. Jumia also tracked the categories that interested customers and the products that were eventually converted into sales. Demand data was then used to convince many international brands, including China’s mobile player Infinix, to use Jumia as a point of entry into the Nigerian market.

J-Force

In 2014 Jumia introduced J-Force, an innovative sales program that enlisted agents who acted as intermediaries between Jumia and the end customer. The program was aimed at enhancing customer trust and reaching those with limited internet access or unfamiliarity with e-commerce platforms. J- Force agents, armed with their internet-enabled tablets, travelled door to door familiarizing customers

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with Jumia’s website and product portfolio, and providing assistance with any orders that customers wished to place. Agents received commissions that varied across product categories based on the margins Jumia made on those categories. Anammah explained, “For instance, on a $50 dress, if Jumia made a 20% or $10 margin, it passed 20% of that, or $2, on to the agent.” Anu Adasolum, Vice President of J-Force Nigeria, remarked on how well the program fit into the country’s service-oriented culture: “In Nigeria, almost everyone ‘had a guy’ to take care of things they could not or would not do themselves. Many people were still not familiar or comfortable with e-commerce, so J-Force offered an easy solution.” The J-Force program proved successful, growing from 420 agents during the 2012 pilot period to over 25,000 by 2016. The flexibility of the position attracted many agents—typically men 18– 30 years old—who could set their own hours based on their availability and income requirements.

Weighing the pros and cons of the program, Adasolum said, “While J-Force had the ability to bring offline customers online, we had to share our razor-thin margins with our agents.” Jumia also invested heavily in training as a way to improve customer service while encouraging agent loyalty and skill development. Over 50 full-time Jumia employees were involved in managing J-Force. The team was also responsible for spotting agents that showed potential and weeding out those who were low performing. Agents, in turn, were required to undergo a daylong training program at Jumia’s office. Customers appreciated the J-Force program because they were able to make purchases with more confidence and had more flexibility with payment, delivery, and returns. Surveys showed that customers felt that products bought through the program were more reliable and of higher quality than those bought directly by customers from the Jumia site. Finally, J-Force helped Jumia build stronger relationships with consumer brands. Adasolum explained, “Brands valued the insights on what people wanted and at which price, and J-Force was able to provide this information first-hand.”

Accelerating Growth

Having streamlined its processes, Jumia next focused on building volume. While the company had experienced impressive early stage growth based largely on its excellent service and favorable word of mouth, the leadership wanted to break out. They decided to piggyback off the U.S. retail tradition of Black Friday, which referred to the Friday after Thanksgiving, late in November. It was an ideal day for shopping because most workers had the long weekend off and Christmas was four to five weeks away. Over the years, Black Friday had become the largest shopping day of the year in the U.S., with retailers offering huge discounts to attract shoppers and increase sales. Jumia held its first Black Friday event, 12 days of deeply discounted prices across product categories, on November 28, 2013, in line with the U.S. Black Friday. Customers flocked to the website, which had over 1.5 million visitors during the sale period. Though it first introduced Black Friday in 2013, Jumia noted that the event “really got the roof on fire” in 2014 when the site received 10 million page views in one day.32

Through the retail model, Jumia earned revenues from retail sales, delivery charges, and value-added services (VAS).b Jumia offered products under an array of categories including electronics, apparel, household goods, and beauty products. (See Exhibit 11 for an image of Jumia’s website.) Margins across product categories varied significantly. In the highly competitive, low-margin electronics segment, margins were 4%–7%, while in the apparel space they ranged from 20%–30%. Jumia also understood that different categories sold differently and therefore required different investments. Electronics moved faster and were less risky to invest in but could suffer damage; items in the fashion category were rarely damaged, but sales were seasonal and usually trend-dependent. Simone Bartlett (HBS MBA ’13), Senior Vice President for Marketing, explained, “Our experience has shown us that each category needs either b Value-added services referred to additional services that a company provided beyond its core focus in order to gain additional revenue or a competitive edge. Examples included sharing demand and consumer preference data.

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minor or major modification of its supply chain. In the rapid category expansion we were undertaking, we needed to plan and take the time required to build each category, end to end.” Jumia’s delivery charges varied based on the weight of each package, but fees were waived for customers who picked up their items at a Jumia pick-up center. Jumia also offered vendors VAS in which—for a fee—it would share metrics around sales, target audiences, and conversion rates. Across these revenue streams, Jumia’s total revenue split consisted of retail at 85%, delivery fees at 10%, and VAS at 5%.

Jumia and Konga Nigerian entrepreneur Sim Shagaya (HBS MBA ’03) founded the e-commerce company Konga.com

in July 2012. After working as an investment banker in South Africa, Shagaya repatriated to Nigeria to head Google’s Africa division.33 In March 2011 he left Google and started DealDey, a Groupon-like “deal of the day” platform for Nigeria. DealDey’s success demonstrated to Shagaya that there was a huge opportunity in the Nigerian e-commerce space.34 Using his own funds and with only a handful of employees, Shagaya started Konga from his apartment in Lagos. Just two months into operations, the company began attracting investor attention. Early investors included the South African media group Naspers and the Swedish investment firm Kinnevik.35 By 2015, Konga was valued at close to $200 million, with 700 employees and 8,000 merchants selling on its platform.36

The similarities between Konga and Jumia went beyond their founding year and HBS alumni involvement (see Exhibit 12). Like Jumia, Konga’s business model was closely aligned with its mission to “be the engine of commerce and trade in Africa.”37 Shagaya explained, “We viewed Konga less as an online retailer and more as a digital platform to get entities trading.”38 Konga and Jumia both faced the challenge of winning customer trust, and both adopted a customer-first approach to operations. Shagaya described his company’s “incredible focus on the needs of the customer [in order to] manifest [their] dreams and aspirations.”39 Echoing this sentiment, Doutté stated, “Customer satisfaction was a main element of our success. A lower price point meant little if customers were not happy with their online experience.”

Konga and Jumia developed a fierce rivalry, competing over virtually every aspect of their business. In order to become the sole distributor of certain products, both companies attempted to sign exclusivity contracts. Such exclusivity deals were rare and were limited to the mobile phone category for only a certain promotional period. Each company accused the other of engaging in price wars in order to undercut competition and capture market share. Employees—particularly department heads in marketing and vendor management—were poached by each company. Furthermore, it was common to see one company imitate the other’s sales promotions and discount offers. After Jumia introduced its Black Friday event in 2013, Konga followed suit that same year with a similar sale event called Yakata, meaning “utterly” in Nigeria’s colloquial English. In early 2014, Konga even considered legal action against Jumia, accusing it of registering the Konga domain in 11 African countries to undermine future expansion plans.40

One of the key differences between Jumia and Konga was their business models. Shortly after beginning operations, Konga shifted to a marketplace model—announcing Konga Mall, which enabled third-party sales through the site—while Jumia remained an online retailer.c Konga described its marketplace model as offering a wide product portfolio to its customers through thousands of sellers, including a large number of small and medium-sized vendors who would otherwise not have had access to Konga’s consumer base, delivery network, or infrastructure support.41 However, in the view

c An online retailer was a business entity that sold directly to the customer from its inventory of goods. A marketplace model provided an online platform that allowed third parties to buy and sell goods. In the marketplace model the business entity acted as a facilitator.

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of Adebola Sogeyinbo, Team Lead for Key Accounts at Jumia, it was unclear whether this large product portfolio would provide Konga with an edge in the long run. She argued, “While this certainly made their website look better, they might have trouble fulfilling orders as small vendors struggled to maintain their own stocks.”

Another distinction that developed over time was corporate identity. Jumia was seen as a multi- national company. From a recruitment standpoint, this perception helped it attract top talent. Sogeyinbo explained, “Nigerians felt that they would enjoy a better work culture and be given more respect at a multinational. Working with one was a status symbol.” However, Konga’s identity as a homegrown company with Shagaya as its charismatic leader appealed to Nigeria’s growing sense of “patriotic capitalism.”42 A profile in an industry publication said of Shagaya, “As far as tech entre- preneurs go, Shagaya was like the Steve Jobs of Nigeria,”43 and made a clear connection between building a successful business and the development of the country.

Both companies shared a deep desire to claim the title of Nigeria’s largest online retailer.44 Industry analysts acknowledged the similarities but were not ready to declare a market leader. A venture capital executive commented, “Everyone talks about profitability, but these guys are in the very early innings . . . for now, Konga and Jumia need to build their digital marketplace infrastructure, master their logistics, and establish compelling brand value. It’s going to be expensive and take time.”45

Shift to the Marketplace Model By January 2016, two things had become clear to Jumia: first, the Nigerian economy was sliding into

a deep recession, and second, its competition with Konga was intensifying. Jumia’s board responded to these developments with the announcement of a major strategic shift toward a marketplace model. The objective of the marketplace model was to provide a nearly limitless product selection to customers. Sellers would be responsible for the inventory, while Jumia would handle customer billing and logistics, picking up ordered goods from sellers, and delivering them to customers. This shift would allow Jumia to open its platform to a large potential set of sellers. (See Exhibit 13 for a representation of the marketplace model.)

The board saw the strategic shift as inevitable. Doutté explained, “The board felt that the best way for Jumia to meet demand and remain competitive was to open up the platform to multiple sellers. It was easier to scale using technology, and we were seeing evidence of this globally in the growth of pure platform companies like Uber. Like them, the board believed we should become a core platform data-driven company and adopt an ecosystem-based approach.” Anammah added, “The retail model restricted our product selection, and inventory risks were high. The board felt that marketplace promised a greater monetization, higher-margin opportunity, since we would earn a commission on every transaction done, without incurring any of the related inventory holding costs.”

The board also believed that the marketplace model would help Jumia reach the elusive goal of profitability (see Exhibit 14 for Jumia financials). Despite Jumia’s impressive growth, it remained very expensive to run an e-commerce business due to heavy discounting, high marketing costs, free shipping, and other measures taken to win market share. The board was also concerned about access to capital. Fresh off the heels of the phenomenally successful Alibaba IPO in China, international investors saw marketplace as the “poster child” of e-commerce models. Doutté explained, “Market dynamics, consumer behavior, and income levels in China were similar to those at play in Nigeria. Therefore, what worked in China at such a large scale could certainly be replicated successfully in Nigeria. At the end of the day, financial investors will have to make returns. We knew that we couldn’t have unlimited access to capital funding.”

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Next Steps With the board’s announcement behind them, Doutté, Martin, and Anammah began to reflect on

the implications of the decision to migrate Jumia from a retail-led platform with only a few sellers offering a limited product selection to a marketplace model with thousands of sellers offering a vast product selection. Success stories from the rest of the world conveyed mixed messages. Alibaba in China had demonstrated the efficacy of the asset-light, rapid-growth marketplace model in which platforms connected buyers and sellers rather than holding inventory and reselling products. On the other hand, Zappos, the online shoe retailer known for its zealous customer service, began as a marketplace but quickly turned into a pure retailer with equally positive results.

Nigeria was a unique market, and international examples could not hold all the answers. The team needed to ask the right questions and find the right solutions. Would a marketplace model dilute Jumia’s reputation with customers? Would the move limit their competitiveness against Konga? If Nigeria’s structural weaknesses undermined the retail model, why should they assume a marketplace model would be less vulnerable?

As the plane touched down in Lagos, the trio agreed that their shared desire to build something transformational would keep Jumia going. On his return to the office the next morning, Doutté said, “There is more to be done, and I think we have the right team in place to get it done right. The board has now asked that we shift our strategic focus, and we are ready to meet that challenge head-on.”

 

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Jumia Nigeria: from Retail to Marketplace (A) 718-401

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Exhibit 1 Map of Nigeria

 

Source: Courtesy of the University of Texas Libraries, University of Texas at Austin.

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Exhibit 2 Select Economic and Social Macroeconomic Indicators for Nigeria (2010–2015)

2010 2011 2012 2013 2014 2015

Economic Indicators GDP (current US$ billions) 369 412 461 515 568 481 GDP (constant 2010 US$ billions) 369 387 404 425 452 464 GDP growth (annual %) 7.8 4.9 4.3 5.4 6.3 2.7 GDP per capita (current US$) 2,327 2,528 2,755 2,997 3,222 2,655 GDP per capita (constant 2010 US$) 2,327 2,377 2,413 2,476 2,563 2,563 GDP per capita growth (annual %) 5 2.1 1.5 2.6 3.5 0 Consumer price index (2010 = 100) 100 111 124 135 146 159 Exchange rate (annual average N to $US) 150.31 154.15 157.48 157.31 159.11 192.44 Exchange rate (unofficial, annual avg. N to $US) 150.72 157 158.41 159.62 165.95 198.31 Social Indicators Population, total (millions) 159 163 167 172 176 181 Population growth (annual %) 2.7 2.7 2.7 2.7 2.7 2.6 Life expectancy at birth, total (years) 50.8 51.3 51.7 52.1 52.5 53.0 HDI Rank 156 151 153 152 152 152

Source: Created from World Bank, World Development Indicators Country, Nigeria, http://databank.worldbank.org/data/ reports.aspx?source=world-development-indicators#; UNDP, Human Development Index 2016, Nigeria Summary, http://hdr.undp.org/en/countries/profiles/NGA; United Nations, Monthly Bulletin of Statistics Online, https://unstats.un.org/unsd/mbs/app/DataSearchTable.aspx, accessed May 23, 2017 (for official exchange rate); and United Nations, Treasury—UN Operational Rates of Exchange, https://treasury.un.org/operationalrates/ OperationalRates.php, accessed May 22, 2017 (for unofficial exchange rate).

 

Exhibit 3 Naira to U.S. Dollar Exchange Rate: Official and Parallel Market (Dec 2013–Dec 2015)

Source: Official bank rates source: Central Bank of Nigeria, http://www.cbn.gov.ng/rates/exrate.asp?year=2015&month=3.

Parallel market rates source: abokiFX, https://abokifx.com/.

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Jumia Nigeria: from Retail to Marketplace (A) 718-401

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Exhibit 4 Informal Markets in Nigeria

 

Source: Wikimedia Commons, typical Nigerian market scenery, Ikija, Lagos State, Nigeria, https://commons.wikimedia.org/wiki/File:Market_-_Ikija,_Lagos,_Nigeria.jpg, accessed October 27, 2017; and Wikimedia Commons, Zouzou Wizman from Rennes, France, Wax market, https://commons.wikimedia.org/ wiki/File:2005_market_Lagos_Nigeria_12129001.jpg and https://commons.wikimedia.org/wiki/File:2005_ market_Lagos_Nigeria_12129005.jpg, both accessed October 27, 2017.

 

 

 

Exhibit 5 Comparative Statistics on the Retail and Internet Retailing Markets of Select Nations (data for 2015 except when specified)

Nigeria

Nigeria (FY

2020) South Africa Kenya India Brazil

United States

Population (millions) 181 207 55 46 1,311 208 321 Mobile penetration (% of households) 82 91 96 88 83 93 97 Number of internet users (millions) 72 111 26 18 301 114 225 Size of retail market (US$ millions) 39,032 73,778 58,025 11,363 474,449 246,076 2,908,816 Size of internet retailing market (US$ millions) 171 689 441 63 11,355 9,601 276,585

Source: Euromonitor, Passport, accessed April 20, 2017 and May 1, 2017; World Bank Development Indicators, accessed May 10, 2017; and The World Bank, Health Nutrition and Population Statistics, http://databank.worldbank.org/data/ reports.aspx?source=Health%20Nutrition%20and%20Population%20Statistics, accessed May 10, 2017.

 

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718-401 Jumia Nigeria: from Retail to Marketplace (A)

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Exhibit 6 Text of the “Astronaut Scam” Email

Subject: Nigerian Astronaut Wants to Come Home Dr. Bakare Tunde Misau Street PMB 437 Garki, Abuja, FCT NIGERIA

 

Dear Mr. Sir,

REQUEST FOR ASSISTANCE-STRICTLY CONFIDENTIAL

I am Dr. Bakare Tunde, the cousin of Nigerian Astronaut, Air Force Major Abacha Tunde. He was the first African in space when he made a secret flight to the Salyut 6 space station in 1979. He was on a later Soviet spaceflight, Soyuz T-16Z to the secret Soviet military space station Salyut 8T in 1989. He was stranded there in 1990 when the Soviet Union was dissolved. His other Soviet crew members returned to earth on the Suyuz T-16Z, but his place was taken up by return cargo. There have been occasional Progrez supply flights to keep him going since that time. He is in good humor, but wants to come home.

In the 14-years since he has been on the station, he has accumulated flight pay and interest amounting to almost $ 15,000,000 American Dollars. This is held in a trust at the Lagos National Savings and Trust Association. If we can obtain access to this money, we can place a down payment with the Russian Space Authorities for a Suyuz return flight to bring him back to Earth. I am told this will cost $ 3,000,000 American Dollars. In order to access the his trust fund we need your assistance.

Consequently, my colleague and I are willing to transfer the total amount to your account or subsequent disbursement, since we as civil servants are prohibited by the Code of Conduct Bureau (Civil Service Laws) from opening and/ or operating foreign accounts in our names.

Needless to say, the trust reposed on you at this juncture is enormous. In return, we have agreed to offer you 20 percent of the transferred sum, while 10 percent shall be set aside for incidental expenses (internal and external) between the parties tin the course of the transaction You will be mandated to remit the balance 70 percent to other accounts in due course.

Kindly expedite action as we are behind schedule to enable us include downpayment in this financial quarter.

Please acknowledge the receipt of this message via my direct number 555-555-5555 only.

Yours Sincerely, Dr. Bakare Tunde

Astronautics Project Manager

 

Source: Mark Molloy, “Astronaut stranded in space email scam sweeps the internet,” The Telegraph, February 16, 2016, http://www.telegraph.co.uk/news/newstopics/howaboutthat/12160621/Nigerian-astronaut-lost-in-space-email- 419-scam-sweeps-the-internet.html.

Note: For a YouTube video with a news anchor reading the text of the email, see “Tv presenter reads a hilarious Nigerian Astronaut scam on tv!” YouTube, https://www.youtube.com/watch?v=Lfwf9B0jUwM&app=desktop.

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Jumia Nigeria: from Retail to Marketplace (A) 718-401

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Exhibit 7 Funding Received by Jumia over Time

Time

Amount received ($ millions)

Valuation* ($ millions) Investors

October 9, 2012 NA NA J.P. Morgan Asset Management, Inc.

December 31, 2012 10 NA Rocket Internet SE January 10, 2013 NA NA Tengelmann Ventures Management

GmbH March 6, 2013 26 NA Summit Partners LLP May 19, 2013 45 NA Millicom International Cellular SA July 5, 2013 NA NA Silvertree Capital November 25, 2014 135 552 Africa Internet Group

November 25, 2014 15 552 BGN Brilliant Services GmbH

Source: S&P Capital IQ, report created August 3, 2016.

Note: *Valuation is post receipt of funding.

 

Exhibit 8 Diagram of the Retail-Led Business Model

 

Source: Hagiu, Andrei, “Multi-Sided Platforms: Foundations and Strategy,” HBS No. 714-436 (Boston: Harvard

Business School Publishing, 2013).

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718-401 Jumia Nigeria: from Retail to Marketplace (A)

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Exhibit 9 Profile of Select Vendors for Jumia

• B2B Distributors: major distributors in Nigeria of international brands including Fossil, Seiko, Binatone, Hewlett Packard, LG and Samsung

• Given the fragmented nature of the retail segment, vendors focused on product markets in which they had special prior expertise of contacts; personal relationships were of significant importance

• Products sold included mobile phones, laptops, small home appliances and watches. Imported from China or other Asian markets

• Seasoned business executives with significant transactional experience across Nigeria

• Jumia purchased goods at discount (at volumes) from vendors and charged marked-up price to customers

Source: Company documents.

 

Exhibit 10 Images of Jumia’s Warehouse, a Delivery Truck, a Last-Mile Hub, and Headquarters

Jumia Warehouse in Lagos

 

Jumia Delivery Truck

 

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Jumia Nigeria: from Retail to Marketplace (A) 718-401

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Exhibit 10 (continued)

Jumia Delivery Truck (Rear View)

 

One of Jumia’s Last-Mile Hubs

 

Jumia’s Headquarters

 

Source: Pictures taken by casewriter.

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C om

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w eb

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.

 

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Jumia Nigeria: from Retail to Marketplace (A) 718-401

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Exhibit 12 Key Comparisons between Jumia and Konga (as of year-end 2015)

Jumia Konga

Shareholders

Africa Internet Group (Nigeria sub of AIG) Millicom International (Germany) Summit Partners (USA) BGN Brilliant Services GmbH (Germany) Rocket Internet SE (Germany)

Kinnevik (Sweden) Naspers (South Africa)

Commercial Launch May 1, 2012 July 1, 2012

Investments (Million USD) $231 [$65]

a

Slogan The on-line store you can trust Nigeria’s on-line mall

Headquarters Lagos, Nigeria Lagos, Nigeria

International Presence Nigeria, Morocco, Egypt, Kenya Nigeria

Strategic Focus

• Consistent supply of wide array of products

• Ensuring fast delivery through extensive, effective, and efficient distribution network

• Ensuring excellent customer service

• Customer-centric focus • Marketplace model- offering

unmatched breadth of items • Delivering products to customer

doorsteps

Source: S&P Capital IQ reports, created August 3, 2016 and May 11, 2017; company documents, analysis.

a This figure includes a $27 million (297 million rand) investment reported by Naspers to have been made in October 2014. Press reports indicate further Naspers and Kinnevik investments of $50–$60 million in October 2014.

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718-401 Jumia Nigeria: from Retail to Marketplace (A)

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Exhibit 13 Marketplace Model as Proposed by Jumia Board

 

Source: Hagiu, Andrei. “Multi-Sided Platforms: Foundations and Strategy,” HBS No. 714-436 (Boston: Harvard Business School Publishing, 2013.)

 

Exhibit 14 Jumia Financials 2013–2015 (all figures in million euros)

 

Source: Company’s unaudited consolidated financial statements based on IFRS and management reports.

a Adjusted for share-based compensation expenses.

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Jumia Nigeria: from Retail to Marketplace (A) 718-401

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Endnotes

1 World Bank Data, World Development Indicators—Nigeria, accessed March 8, 2017; and CIA, The World Factbook, “Nigeria,” accessed March 7, 2017.

2 Oxford Business Group, “Nigeria Year in Review 2015,” January 29, 2016.

3 World Bank Data, World Development Indicators—Nigeria, accessed March 8, 2017.

4 See World Investment Report 2016, http://unctad.org/sections/dite_dir/docs/wir2016/wir16_fs_ng_en.pdf; and Economist Intelligence Unit (citing National Bureau of Statistics), Nigerian economic update, March 1, 2017, accessed March 2, 2017.

5 See “Nigeria 2016 Crime & Safety Report: Lagos,” U.S. Department of State, OSAC, Bureau of Diplomatic Security, https://www.osac.gov/Pages/ContentReportDetails.aspx?cid=19502.

6 See report of the 2013 Crime Victimization Survey conducted by Cleen.org. a local NGO funded by the MacArthur Foundation and focused on promoting public safety, security, and accessible justice through research and advocacy, http://cleen.org/Text%20Report%20of%202013%20NCVS%20Findings.pdf.

7 WEF, “The Global Competitiveness Report,” http://www3.weforum.org/docs/gcr/2015- 2016/Global_Competitiveness_Report_2015-2016.pdf, p. 283.

8 See “Formal and Informal Sector Split of Gross Domestic Product, 2015,” National Bureau of Statistics, June 2016, www.nigeriastat.gov.ng/download/403.

9 Several widely published reports by companies such as The Global Consultancy, McKinsey, and South Africa’s largest bank, Standard Bank, all agree, despite different conclusions on the actual size of the African middle or consumer class, that this class is growing on the continent. See “So much in store. Prospects in the retail and consumer goods sector in ten sub-Saharan African countries,” PWC, March 2016, p. 8.

10 “Recent economic challenges in Nigeria affect consumer spending,” in the “Industry & Retail” chapter of The Report: Nigeria 2016, Oxford Business Group, accessed March 2, 2017.

11 “Nigeria offers ample opportunities for a variety of retailers,” in the “Industry & Retail” chapter of The Report: Nigeria 2016, Oxford Business Group, accessed March 2, 2017.

12 “So much in store. Prospects in the retail and consumer goods sector in ten sub-Saharan African countries,” PWC, p. 67.

13 See Omidire, Dolapo, “Why office space in Lagos is more expensive than in New York,” The Boom, https://qz.com/422003/why-office-space-in-lagos-is-more-expensive-than-new-york/.

14 World Bank, “Ease of Doing Business” report, http://www.doingbusiness.org/rankings, accessed May 2017.

15 See International Telecommunications Union, Country ICT Data, http://www.itu.int/en/ITU- D/Statistics/Pages/stat/default.aspx.

16 Euromonitor Passport, accessed May 1, 2017.

17 “Online Fraud: Top Nigerian Scammer Arrested,” BBC News, August 1, 2016, http://www.bbc.com/news/world-africa- 36939751, accessed April 2017.

18 Gat, Aviva, “Millions of Victims Lost $12.7 Billion last Year Falling for Nigerian Scams,” July 21, 2014, http://www.geektime.com/2014/07/21/millions-of-victims-lost-12-7b-last-year-falling-for-nigerian-scams/.

19 “Launching into the Unknown,” The Economist, October 4, 2014, http://www.economist.com/news/business/21621820- predicting-rocket-internets-trajectory-hard-want-predecessors-launching, accessed March 2017.

20 Rock Internet website, “Homepage,” https://www.rocket-internet.com/companies/delivery-hero, accessed March 2017.

21 “JP Morgan Finances e-commerce Firm,” allAfrica.com, October 17, 2012.

22 Donnan, Shawn, “E-commerce: Technology Business Prospects Lure Entrepreneurs Back Home,” Financial Times (London), November 28, 2012, https://www.ft.com/content/11f0d10c-335e-11e2-8e44-00144feabdc0, accessed March 2017.

23 Donnan, Shawn, “E-commerce: Technology Business Prospects Lure Entrepreneurs Back Home.”

 

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24 Email correspondence with Jeremy Doutté, February 7, 2019

25 Jeremy Hodara, Crunchbase, https://www.crunchbase.com/person/jeremy-hodara#section-overview, accessed February 2019

26 Sacha Poignonnec, LinkedIn, https://www.linkedin.com/in/sacha-poignonnec-7b92128/?originalSubdomain=ae, accessed February 2019

27 Rice, Xan, “Internet Sales Flourish in Nigeria,” Financial Times (London), May 14, 2013, https://www.ft.com/content/3f455b7e-b1bb-11e2-9315-00144feabdc0, accessed March 2017; and Olusina, Olaolu, “Founders of Nigerian Online Retailer Jumia Talk About Managing a Fast Growing Business,” How We Made It in Africa, June 21, 2013, https://www.howwemadeitinafrica.com/founders-of-nigerian-online-retailer-jumia-talk-about-managing-a-fast-growing- business/, accessed March 2017.

28 Olusina, Olaolu, “Founders of Nigerian Online Retailer Jumia Talk About Managing a Fast Growing Business.”

29 Eton, Asuquo, “Jumia Nigeria Officially Announces Nicolas Martin and Jeremy Doutte As New Co-CEOs,” talkmedia Africa, February 9, 2014, http://talkmediaafrica.com/2014/02/09/jumia-nigeria-officially-announces-nicolas-martin-jeremy- doutte-new-co-ceos/, accessed April 2017

30 Eton, Asuquo, “Jumia Nigeria Officially Announces Nicolas Martin and Jeremy Doutte As New Co-CEOs.”

31 Eton, Asuquo, “Jumia Nigeria Officially Announces Nicolas Martin and Jeremy Doutte As New Co-CEOs.”

32 Oloyede, Olaoluwa, “Jumia does it again! Set to Cause a Nation Holiday on 2015 Black Friday at up to 90% discount,” Jumia Lounge (blog), November 5, 2015, https://blog.jumia.com.ng/jumia-set-cause-nation-holiday-2015-black-friday-90-discount/, accessed April 2018.

33 Maritz, Jaco, “Sim Shagaya’s ‘Epic Journey’ to Make Konga.com Nigeria’s Top Online Retailer,” How We Made It in Africa, April 17, 2013, https://www.howwemadeitinafrica.com/sim-shagayas-epic-journey-to-make-konga-com-nigerias-top-online- retailer/25770/, accessed March 2017.

34 Maritz, Jaco, “Sim Shagaya’s ‘Epic Journey’ to Make Konga.com Nigeria’s Top Online Retailer.”

35 Rice, Xan, “Internet Sales Flourish in Nigeria.”

36 “With About $60 million New Funds, Konga.com Market Value Stands around $200 million,” October 4, 2014, http://innovation-village.com/with-about-60million-new-funds-konga-com-market-value-stands-around-200-million/, accessed March 2017.

37 Konga.com company website, http://www.konga.com/about-us-culture, accessed March 2017.

38 Bright, Jake, “Why Africa May Be on the Verge of an Internet Boom,” Fortune, February 16, 2014, http://fortune.com/2015/02/16/nigeria-internet-startups/, accessed March 2017.

39 Gundan, Farai, “Sim Shagaya: On Building the Next Big Thing, Konga, Africa’s version of Alibaba—Part Two,” January 14, 2015, https://www.forbes.com/sites/faraigundan/2015/01/14/sim-shagaya-on-building-the-next-big-thing-konga-africas- version-of-alibaba-part-two/#4259968b64d2, accessed March 2017.

40 Adeyina, Olawale, “Konga to take legal actions against Rocket Internet,” TechCity, January 25, 2014, https://www.techcityng.com/battle-supremacy-konga-vs-jumia/, accessed March 2017.

41 See Konga.com website, http://www.konga.com/about-us/; and Konga’s Seller HQ: https://shq.konga.com/.

42 Bright, Jake, “Why Africa May Be on the Verge of an Internet Boom.”

43 Bright, Jake, “Why Africa May Be on the Verge of an Internet Boom.”

44 Bright, Jake, “Why Africa May Be on the Verge of an Internet Boom.”

45 Bright, Jake, “Why Africa May Be on the Verge of an Internet Boom.”

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  • Structure Bookmarks
    • Jumia Nigeria: from Retail to Marketplace (A)
    • The Nigerian Economy
    • The Nigerian Retail Landscape
    • Jumia in the Early Years
    • Retail-Led Business Model
    • Building a Logistics System
    • Payments
    • Technology
    • J-Force
    • Accelerating Growth
    • Jumia and Konga
    • Shift to the Marketplace Model
    • Next Steps
    • Exhibit 1Map of Nigeria
    • Exhibit 2Select Economic and Social Macroeconomic Indicators for Nigeria (2010–2015)
    • Exhibit 3Naira to U.S. Dollar Exchange Rate: Official and Parallel Market (Dec 2013–Dec 2015)
    • Exhibit 4Informal Markets in Nigeria
    • Exhibit 5Comparative Statistics on the Retail and Internet Retailing Markets of Select Nations (data for 2015 except when specified)
    • Exhibit 6Text of the “Astronaut Scam” Email
    • Exhibit 7Funding Received by Jumia over Time
    • Exhibit 8Diagram of the Retail-Led Business Model
    • Exhibit 9Profile of Select Vendors for Jumia
    • Exhibit 10Images of Jumia’s Warehouse, a Delivery Truck, a Last-Mile Hub, and Headquarters
    • Exhibit 10 (continued)
    • Exhibit 11Jumia’s Website
    • Exhibit 12Key Comparisons between Jumia and Konga (as of year-end 2015)
    • Exhibit 13Marketplace Model as Proposed by Jumia Board
    • Exhibit 14Jumia Financials 2013–2015 (all figures in million euros)
    • Endnotes