Jumia Sets Its Sights On Egypt And Unlicensed Vendors

Jumia, the leading eCommerce player in Africa, has set its sights on Egypt, aiming to grow tenfold on a revenue basis and sixfold in the number of products it sells — to 12 million — by 2021.

According to a report in Bloomberg, to reach that goal, Jumia Egypt’s Chief Executive Officer Hesham Safwat said the online retailer wants to tap Egypt’s network of unlicensed vendors. Safwat is calling on the government to regulate the vendors by providing them with a tax incentive and low-cost loans so they can market their products over the Internet.

“I personally take it as my biggest challenge,” Safwat said in the report to Bloomberg. “Imagine if only 50 percent of this informal market becomes formal, we would be able to add them to our platform, and new products categories will emerge to online consumers.” The report noted that Egypt has 96 million consumers who are slowly moving online to shop. Currently, about 5 percent to 8 percent of Egyptian Internet users have purchased something over the Internet, underscoring the potential opportunity for eCommerce players. Meanwhile, the unregulated vendors account for 37 percent or more of total domestic output. Informal retailers don’t have to pay taxes or deal with quality controls, making them impossible for Jumia to sell on its platform. Egypt, noted the report, is Jumia’s second largest market after Nigeria. It operates in 23 African countries.

In 2017, sales for Jumia in Egypt increased 190 percent on a year-over-year basis as consumers dealing with inflation looked for low-cost options. Retailers, trying to reach larger audiences of potential shoppers, also relied more on Jumia in 2017. Safwat wouldn’t quantify the increase in business with retailers. “They need to expand across the country, but the logistics are expensive,” Safwat said in the report, “and eCommerce can connect them so that they can expand and grow with the least possible cost, which is a great advantage.”