Online Shopping and the Jumia Challenge
Raheem Akingbolu takes a look at the growth of e-commerce in Nigeria and the struggle for market leadership among operators in the e-commerce space, especially Jumia.com.ng that seems to be making a positioning statement through comparative pricing
After the little hitch caused by skepticism and suspicion among Nigerians, many online platforms like Jumia, Conga, Adibba and Taafoo.com, have since begun to explore the market
At the beginning, the sudden emergence of online shopping in the Nigerian market was strange to many consumers, no thanks to the activities of dubious characters, who created fear in the minds of prospective buyers. But as time moved on, early players in the market intensified efforts to educate the masses on its importance through advertising and other communication platforms and the message sank. Of course, words of mouth from a few exposed Nigerians, who had experienced it overseas also, helped the campaign. Today, the rest is history. Trust has not only been built but many Nigerians have also seen it as the easiest way to shop.
From anywhere one chooses to look at it, Nigeria is fast experiencing her own dot com boom even though it’s been over a decade such happened in America. The dot com boom describes an era in America between 1997–2001, when several e-commerce businesses were being launched.
Meanwhile the growth of e-commerce in Nigeria has encouraged the federal government to throw its weight behind the establishment of the Retail Council of Nigeria (RCN). At the inauguration of the council last year, the Minister of Industry, Trade and Investment, Olusegun Aganga, explained that anywhere in the world, e-Commerce business had become a major driver of the economy.
According to him; “global retail trade accounts for 27 per cent of the world’s Gross Domestic Product (GDP). The retail sector also employs 17 per cent of the global workforce, which is about 800 million people. In the United States alone, one in every 10 people works in the retail sector,” Competition After the little hitch caused by skepticism and suspicion among Nigerians, many online platforms like Jumia, Conga, Adibba and Taafoo. com, have since begun to explore the market. One thing that stands out the e-commerce system out, compared to the offline market prices, despite free shipping services and high cost of logistics, is their ability to maintain clear edge in terms of price while still offering quality goods. Of all the players, Jumia and Conga seems to be struggling for the market leadership. However while both are competing through resources and network, Jumia’s strategy to win the war with price appears to be giving it the lead.
If there is anything that has helped the players, it is simply the dynamic attitude of Nigerians towards internet usage. According to reports from the International Telecommunication Union (ITU), 28% of Nigerians are actively using the internet, a percentage that is inching closer to the world’s average of 30%. From 4.5 million users in 2000 to 45 million at the end of 2011, this growth has been phenomenal, and the statistics have placed Nigeria as the country with the highest number of internet users in Africa. Jumia strategies After crossing the hurdle, Jumia.com.ng began to redefine the online retail through relevant positioning strategies. A quick study at the activities of the various platforms reveals Jumia penchant to maintain the tradition of friendly prices and offering of quality goods. The question many are curious to ask is whether the brand can sustain this tradition or not as the market continue to grow. Though this seems to be challenge, the promoters of the brand have cleverly combined all the marketing stunts to inspire trust and win consumers’ loyalties.
That’s a feat that is hard to achieve especially in Nigeria with issues of fraud, and consumer confidence at its lowest when it concerns online transactions. With quality products at affordable prices, a classic user-friendly website, various flexible modes of payment, free shipping nationwide, great deals on amazing products, and a wide range of options for shopping and delivery, coupled with an aggressive marketing campaign, Jumia.com.ng is assuring Nigerians that they are well groomed for the job and ready to offer quality goods with best practice in the area of customer relation. Competitive Prices THISDAY findings reveal that the prices Jumia offers for some products showed a consistent competitive pricing with even international online retailers like Bestbuy.com and Amazon. For instance the Samsung Galaxy S5 – Copper Gold, which goes for about $569 on Amazon. com, about N119, 000, when changed to naira, depending on the exchange rate.
The same product goes for $499.99, about N105, 000 on another international retailer, Bestbuy.com. These prices exclude the shipping cost including the customs and clearing duties, should one decide to buy from these stores. However in Nigeria, this same product goes for between N100, 000 and N105, 000 in different online stores. It’s only Jumia.com.ng that sells the product at N95, 230, according to the price information available at their website at the time of this report.
A customer, Mr. Sina Odewale in an interview with THISDAY said he bought a Camera in Jumia at almost the same price he saw it in the United Kingdom a few months ago. “I first saw the camera I’m currently using in London few hours before I left the country last year after a few months course at the London School of Journalism. Unfortunately, I couldn’t afford it again, having done with my shopping. On getting to Lagos, I mentioned it to a friend who advised me to try Jumia. I did and got it the same price after a few days, with little or no stress,”
In an interview with THISDAY, on the strategies the company is using to win consumer loyalty, the Co-Managing Director, Jumia Nigeria, Dr. Jonathan Doerr said Jumia has consistently stood by a standard and maintain international best practice.
He said: “Jumia does not sell at cheaper rates because it offers inferior products. We are able to offer products at affordable prices which are less than other online retail companies and those of brick and mortar stores due to its wide assemblage of brand partners. You just name it, from Apple to Infinix to Lego, Samsung, L’oreal and more, we have been able to forge lasting and favourable partnerships with the biggest brand who are able to offer Jumia their products at reduced tariffs and sometimes even exclusively. The owners of these brands are happy and always willing to work with Jumia because of our integrity built over the years,”
With this development and the way Nigerians are adjusting to the new trend, the online shopping platform might have come to stay if the players maintain the international best standard as being projected.