Jumia Encounters New eCommerce Rivals In Africa Amid Pandemic

As the coronavirus has led to greater popularity of eCommerce deliveries, Jumia Technologies AG is encountering new rivalry from upstarts in the online shopping and transportation space in Africa.

Sacha Poignonnec, the co-chief executive officer of the company, told Bloomberg that more rivalry is to be greeted warmly, since there are not many individuals in the area who make transactions via the web. “I would rather grow the market than just try to take everything,” the executive said.

Jumia is reportedly viewed as an innovator in eCommerce in sub-Saharan Africa. The geographic region is behind the globe because of hurdles like inconsistent addresses and links to the web that are not strong. Restrictions to keep COVID-19 in check, however, have drawn more people who start businesses to the space.

Investors in Jumia have gone through a dramatic journey as of the company’s stock introduction in the U.S. in 2019. Ongoing losses, among other difficulties, has led to a decline in stock price at first. However, COVID-19 assisted in powering an increase in market value this year, with a recent 30 percent drop in shares following Q2 earnings.

As of January of 2020, the internet and smartphone penetration rates in Africa were estimated to be well above half by 2025 and increasing, as they are fueled by tailwinds creating an environment for digitalization around the world.

Juliet Anammah, chairwoman and head of institutional affairs at Jumia, previously told PYMNTS those tailwinds have started blowing stronger during the past few months as the global public health crisis has increased the volume on demand for digital payments, eCommerce and new series of transaction experiences throughout Africa.

She said the changes are likely to be for good. Companies of different kinds throughout the continent will have to consider shifting toward digital for the long term.

“We expect that consumers who have suddenly seen the benefit in ordering online and shopping and paying in a contactless manner, it’s a habit consumers will want to continue going forward,” she said.