(Image source: Tuworm Creative)
Speaking of the cross-border e-commerce market, many sellers will think of Europe, America, Southeast Asia, and even Latin America for the first time. But in fact, the easily overlooked African e-commerce market can be described as a blue ocean market for Chinese cross-border e-commerce sellers.
Africa: An e-commerce blue ocean market delayed by stereotypes
Due to geographical and stereotypical restrictions, many people have never been able to associate Africa with e-commerce. After all, many people's perception of Africa is still stuck in poverty, hunger and construction, and even that the African continent is still a "primitive society".
But what you need to know is that where there is demand, there is a market. Resident Coordinator of the United Nations Development System in China, Chatter, has said that Africa's population is expected to reach 2.5 billion by 2050, and Africa is a production and consumption market with great potential.
The African e-commerce market has great room for growth, supported by the local population. According to the latest survey results of the United Nations Economic Commission for Africa, the size of Africa's e-commerce industry is expected to grow by 50% by 2025. Statista Digital Marketplace also noted that between 2021 and 2025, Africa's e-commerce users will grow faster than Asia's, and the number of active online shopping in Africa will grow from 334 million in 2021 to 519 million in 2025.
(Source: ecommerceDB, Online Shopper Data)
According to DataSparkle data, in February 2023, the monthly active users of mobile shopping apps in Africa exceeded 16.9 million, with an active penetration rate of 6.86%, and the average monthly usage time was 13min18s.
Although internet penetration is increasing, weak infrastructure and the last mile are still a major pain point for African e-commerce logistics.
It is worth mentioning that under the cooperation of the "Belt and Road" policy, Africa's development in recent years can be described as rapid progress, and the level of infrastructure has made a qualitative leap.
Not the same, Africa's infrastructure level has made a huge leap
Through the Belt and Road Initiative, the continent has received significant investment and upgraded infrastructure such as ports, railways, roads, telecommunications and energy facilities. In addition, since the establishment of the Forum on China-Africa Cooperation, Chinese enterprises have built more than 10,000 kilometers of railways, nearly 100,000 kilometers of roads, nearly 1,000 bridges and nearly 100 ports in Africa.
In the case of the increasingly volatile e-commerce markets in Europe, the United States and Southeast Asia, more and more cross-border e-commerce sellers have expressed that they are "unable to move", and have put into action to constantly try to adjust the direction of the market. In this context, the African e-commerce market is gradually known by more cross-border e-commerce sellers, and it has also become a new choice for many cross-border e-commerce sellers.
Jumia Pan-African logistics strength is strong, and three major models help sellers go overseas
Infrastructure construction is the cornerstone of Africa's development, and insufficient infrastructure will be a stubborn problem restricting the development of e-commerce in Africa. In this regard, it is not enough for African countries to develop infrastructure, and the logistics deployment of e-commerce platforms in the local area is also quite important.
Compared with other e-commerce platforms, Jumia's own logistics uses proprietary technology to comprehensively consider multiple dimensions such as network reachability, service quality and delivery cost for cross-border sellers to arrive at the optimal solution. Jumia currently has more than 1,540 drop-off and pick-up stations across 11 Jumia country and provides logistics services to remote areas to ensure a wider range of consumer shopping needs.
It should be noted that Jumia is the third e-commerce company in the world to have its own terminal logistics delivery, in addition to Amazon and JD.com. The Jumia platform has more than 6,870 fleet riders who travel the continent daily, completing 284+ parcel operations per month, serving buyers and sellers until the last mile.
In addition, Jumia ensures that the order products can communicate with consumers efficiently during the delivery process, and the overall delivery success rate is as high as 86%, and the breakage rate is less than 0.15%, which also allows Jumia to achieve a delivery satisfaction rate of more than 97%.
Jumia's proprietary technology, last-mile service, fast turnaround time, reliable product handling, and timely logistics feedback are all able to help cross-border e-commerce sellers do business in Africa.
For products going overseas, cross-border sellers do not need to worry too much, Jumia will provide three logistics modes according to the seller's needs in terms of transportation costs and timeliness.
1. Direct mail
The direct mail mode is characterized by high delivery timeliness, and sellers can track the logistics status of the order products throughout the process, which is safe and secure.
2. Surface mail
The surface mail model is characterized by slow timeliness but very competitive prices. Currently, the model is available for Nigeria, Kenya, and Ghana.
3. Overseas warehouse
Using the overseas warehouse mode, the order products will have the best delivery time, which can achieve 24-hour delivery of orders in first- and second-tier cities, and the logistics carrier can be selected by the seller. Currently, the model is available in Nigeria, Côte d'Ivoire, Senegal, Morocco, Kenya, Uganda, Egypt, Ghana, and South Africa.
Jumia's preferential policy for overseas warehouses has struck to promote the growth of sellers' business
At present, Jumia has built 46 warehouses with a total area of 300,000 square meters in Africa, providing sellers with bulk warehousing and delivery services, and delivering orders to consumers in the fastest time.
It is worth mentioning that in order to help increase the sales of small value products and meet the needs of the local market, Jumia decided to add a new "light and small items" fee size based on the existing warehouse storage fee structure, using Nigeria (NG), Côte d'Ivoire (IC), Ghana (GH) and Uganda (UG) as pilots.
Among them, the overseas warehouse entry fee of "light and small goods" is consistent with the current small item charging standards of various national sites, and its storage fee charging standards are detailed in the figure below:
What is more beneficial to sellers is that for the fees for "light and small items", the Uganda (UG) site will still implement tiered fees on top of the above.
Jumia gives a brief example of how storage fees for Small and Light items are charged. Taking the Fashion category of small and light products in Nigeria as an example, under the new warehousing system, the 90-day storage fee for the product is:
90(day)*0.00202(USD/day)=0.18(USD)
Under the old warehousing system, the 90-day storage fee required 0.92 US dollars, and the new storage fee was reduced by:
（0.92-0.18）/0.92=80%
Under the condition that the procurement cost, domestic plus head logistics, and warehousing fee standards remain unchanged, the new policy reduces the overseas warehouse storage fee expenditure by 80%, and the total cost is reduced by 31%! The specific data can be found in the figure below:
In addition, in order to help sellers grow their performance in Ghana and Uganda, Jumia is about to start rent-free mode!
Note: During the free rental period of the above two sites, the entry and exit fees will be charged normally.
For more policy details, sellers can log on to the official website "Seller Learning Center - Seller Knowledge Base - Product Management - Product Pricing - Overseas Warehouse Product Pricing" to view.
Official website: jumia-global.com.cn
There is no doubt that African countries will become more and more inclined to improve infrastructure to develop the digital economy. As an important part of the digital economy, the development of e-commerce market will naturally become a key focus of African countries in the future. With more and more Chinese enterprises assisting in the construction of African infrastructure, as well as the support of local governments and relevant policies of e-commerce platforms in Africa, Chinese cross-border e-commerce sellers are bound to have certain advantages in going to the African market. Based on the overall overview of the African e-commerce market, cross-border sellers can boldly layout.