JUMIA: Africa’s ALIBABA On safari for the rare African tech unicorn (Links to an

Question

JUMIA: Africa’s ALIBABA On safari for the rare African tech unicorn (Links to an external site.) Links to an external site. , Goldman Sachs and other big-name investors think they have spotted a winner in Jumia, Africa’s aspiring Alibaba. Launched in 2012 in Nigeria, with the backing of German startup fund Rocket Internet (Links to an external site.) Links to an external site. , Jumia is Africa’s biggest e-commerce platform, selling goods and services to a network of 70,000 vendors in 14 African countries and millions of consumers. It has raised more than $700 million from investors, including global telecom operators and was valued at $1.2 billion—qualifying as a so-called unicorn startup—during its last fundraising round in 2016. To become the continent's equivalent of China's Alibaba. Jumia and its merchants face many challenges unique to online retailing in Africa. They include customer hesitations about buying products online, poor internet connectivity, and tight bank lending to vendors and consumers. To overcome these challenges, Jumia offers credit lines, it provides training workshops on basic accounting and stock-keeping, it conducts marketing campaigns featuring the continent's top pop stars, and it runs Black Friday events promotion where buyers could win a live goat. DISCUSSION QUESTIONS:

1. Discuss e-commerce market opportunities in Africa.

2. What are the biggest challenges and obstacles that hinder the growth of e-commerce in Africa? How and to what extent is Jumia trying to overcome challenges for growth?

3. Far from being profitable, Jumia needs further investment to grow. What would be your advice to Jumia’s current / future investors? Would you invest in Jumia if you were in a position to do so?

PLEASE ANSWER IN DEPTH

Explanation / Answer

1 E-commerce market opportunities in Africa

2. Challenges, and, obstacles to the growth of e-commerce in Africa

Jumla's efforts

3. Investment in Jumla

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