Jumia is launching offline experiential centers across the country to increase the uptake of its online offerings by shoppers who would otherwise prefer physical stores, in a move which is being seen as a step in the right direction.
The offline experiential centers are not offline stores but kind of digital centers with screens and computers and free internet allowing shoppers to toy around with the Jumia platforms and order or book whatever they want.
“We just launched our first store about a month ago and we are about to launch three more by the end of this month and we should have another two in a few months so that we have ten by the end of the year. The end point for us is to provide touch points for our customers, have them play with tablets and order stuff online and book hotels in every major town particularly outside Nairobi. Digital stores will have free internet and tablets giving access to 300,000 items or one million,” said Sam Chappate, Jumia Kenya MD.
July was Jumia’s biggest month in terms of traffic as it was forced to shut down its website due to overwhelming demand. However, the firm expects to have three times much more demand on Black Friday than it had in July on its anniversary. The Black Friday sale will run from November 13 till December 13, 2017 though Black Friday will be on November 13, 2017.
Before the current offline experiential zones, Jumia already had offline pickup centers and warehouses but the offline experiential centers have changed the game totally.
“We work with SMEs and big companies with quality products, we provide a technology platform and training and we help them create a new online sales channel to help them sale,” said Chappate. “They control the prices, they control the content while we provide the tools, the backend system and do digital marketing to bring people to the platform and offer logistics support to help fulfill those orders.”
Jumia Group runs Jumia, the online marketplace for vendors; Jumia Food to help restaurants accept online food orders; Jumia House for property; Jumia Travel for hotels and Jumia Jobs and Jumia Cars in some markets. The Group has operations in 23 markets in Africa though Kenya is one of its biggest markets after Nigeria.
According to Chappate, more growth is being driven now by the digital economy than physical products and the firm aims to create jobs in sectors that are growing hence its focus on the local digital economy which promises huge growth.
“The idea is that we started to develop the infrastructure for a digital economy, helping to provide basics for the first move to a digital economy which brings huge impact. The digital economy if you look around the world is the huge source of jobs and driver of economic growth. More growth is being driven by the digital products like music and ebooks than traditional products. So as Kenya, we want to create jobs in sectors that are growing and if we focus on the digital economy, we can see huge growth as a country and if we don’t do it, Rwanda is going to do it, or Uganda or South Africa,” Chappate noted.
The power of the marketplace helps drive the competition bringing together retailers, distributors among others. As a marketplace, Jumia’s role is to allow as many vendors as possible to compete on price and quality of the content to benefit shoppers. The firm says competition has led to over 50 percent cut in prices. This has tripled the number of vendors on the site leading it to drop its commissions further.
Apart from the technology platform, Jumia also runs warehousing, packaging and logistics hubs and a fleet of riders and pick-up points across the country. Jumia has five hubs across the country as warehouse facilities with one main warehouse in Nairobi, four other hubs across the country each with its own fleet of riders.
In other regions, the firm works with third-party service providers to deliver goods to the last mile. For payments, Jumia says it will launch JumiaPay next year to make the payments seamless.
“The first thing is that the big battle we have today is not against Safaricom’s Masoko or Kilimall but the penetration of ecommerce. The question is how many people are buying online and how we can get more shoppers. Our number one objective is to get people to buy online. My battle is how do we go from 0.5 percent to 5 percent. The big battle is how do we grow the e-commerce pie,” he said.
On pricing, Jumia thinks the best marketplace will eventually win due to its number of vendors, quality of content and choice items to pick from. Jumia has 300,000 items on the site but is looking at having 1 million at the end of the year.
