A Conversation with Juliet Anammah, Jumia Nigeria

Find out how Africa’s largest e-commerce platform connects buyers and sellers across the continent.

December 07, 2021

How do you convince Africans — both buyers and sellers — to move from informal outdoor markets to e-commerce? Juliet Anammah of Jumia Group is up for the challenge. Listen to her interview for the Stanford Entrepreneurial Thought Leaders series to learn how Jumia is breaking down traditional barriers with technology.

Jumia operates in 11 countries. It’s the largest e-commerce platform on the African continent and the first African tech startup to be listed on the NYSE. But e-commerce still represents less than 5% of total retail, which means there is tremendous upside if the company can overcome all the obstacles. Jumia is seeking to do just that by creating a marketplace that connects buyers with sellers, integrates third-party providers, builds trust with buyers, provides training and data analytics to sellers, and engages with regulators. The ultimate goal: to improve lives on the continent using the power of the internet.

As former CEO and now chairwoman of Jumia Nigeria and chief sustainability officer of Jumia Group, Anammah has her hands in all of it.

Jumia’s strategy is to deploy existing third-party solutions to handle everything from logistics to delivery to payments, creating a full digital ecosystem. “It’s an asset-light model. You have people who have tricycles and vans and so on, but what was lacking was always the technology to integrate that together and to use the data to make quality decisions.” Anammah says, “The real value you bring to consumers is not limiting them to your own solution — it is actually giving them a platform through which they could use whatever payment method that they have.”

Jumia is breaking down not just trade barriers but gender ones as well. ​​“At least in Nigeria and Kenya, which are key markets, about 51% of our sellers are actually women. It’s a gender agnostic environment. You could be a fashion seller, you could be an electronic seller, and you know you don’t have a lot of physical markets where someone can make those kinds of gender-related decisions that could be forbidden.”

Anammah believes that the power of the platform extends far beyond commerce, driving development and creating jobs across the continent. “In the end, reducing inequality is so critical and is a big part of how we create value. And how we create sustainable improvement in quality of lives on the continent is by asking ourselves: What more can we do?”

Listen to Anammah’s entrepreneurial journey as a guide for your own.

Grit & Growth is a podcast produced by Stanford Seed, an institute at Stanford Graduate School of Business which partners with entrepreneurs in emerging markets to build thriving enterprises that transform lives.

Hear these entrepreneurs’ stories of trial and triumph, and gain insights and guidance from Stanford University faculty and global business experts on how to transform today’s challenges into tomorrow’s opportunities.

Full Transcript

Juliet Anammah: You have to be comfortable with complexity if you’re going to work in Africa.

Darius Teter: If you’re serious about changing things, you first have to understand why they are the way they are.

Juliet Anammah: We love complexity, and we enjoy taking complexity and making it simple.

Darius Teter: Think about how difficult it is to change your own habits. Now expand that to an entire continent. This is the challenge faced by African e-commerce company Jumia. How do you change hundreds of years of established precedent in how people buy and sell? In many ways, they’ve cracked the code, and they’ve done it differently than you might expect. But if you ask them, they’ve barely scratched the surface.

Welcome to Grit & Growth from Stanford Seed, the show where Africa and India’s intrepid entrepreneurs share their trials and triumphs, with insights from Stanford faculty and global experts on how to tackle challenges and grow your business. We’ve got a bit of a departure from our usual today. This is the edited version of a live event with accomplished businesswoman Juliet Anammah. Juliet is the chairwoman of Jumia Nigeria and chief sustainability officer of the Jumia Group. We spoke to her as part of the Stanford Entrepreneurial Thought Leader series, which, as you’ll hear, included real-time questions submitted by viewers. Together, we explored what Jumia has done to convince Africans to adopt e-commerce, how they’re revolutionizing informal markets, and how much more there still is to accomplish.

I wanted to start by getting to know Jumia and the problems it’s trying to solve.

Juliet Anammah: Jumia is an e-commerce platform, the largest e-commerce platform in Africa. We started in 2012, and we started with a mission, a very simple mission, that we could improve lives with the power of the internet on the continent. We are based in about 11 countries, and the 11 countries where we’re based actually cover 70% of Africa’s GDP and over 500 million internet users. So the question is, like you said, what’s the problem we’re trying to solve?

If you were a seller in Africa many years ago, you only had two options on how you’re going to retail your products to consumers. Either you had to pay very expensive High Street real estate prices for a modern retail shop, or you had no other alternative but to operate in the open market. Very informal open market is hot. It has no amenities or utilities, and it’s overcrowded. Those were the only options you had, especially if you were a small-medium enterprise just trying to get by.

So Jumia solves that problem for a host of millions of SMEs and sellers and merchants on the continent because you don’t have to register on the Jumia platform. You don’t have upfront capital expenditure in terms of putting up retail space. Literally minutes, once you’re registered and going through the training for selling online on Jumia, you can start your business. So that’s a huge part of the problem. The second part of the problem, of course, was a logistics problem. So the first one was a distribution problem. And even just staying on the distribution one, if you were a consumer, by the time you finally buy the product, chances are that the markups from the very long distribution chain from manufacturer to bulk broker to wholesaler, and finally to retailer and the neighborhood shop where you buy the item, you could be paying significantly more than you should as a consumer.

So one was a distribution problem from the consumer’s perspective and from a seller’s perspective. So we are bringing millions of consumers to interact and transact with sellers directly with no intermediaries or any other agents in between. The second part of it is the logistics part of it. We’re also solving a logistics problem by integrating multiple logistics partners into one single integrated logistics. It used to be called in my old Accenture days as a “four tier.” But what it is, is that you are using technology to integrate different asset owners and then using Jumia’s technology to also manage the data and how they operate.

Darius Teter: So Jumia doesn’t own the logistic supply chain, but it has a platform that allows you to get the right players in there when you need them, where you need them.

Juliet Anammah: Exactly. So it’s an asset-light model. We have people who have the assets, you have people who have tricycles and vans and so on, but what was lacking was always the technology to integrate that together and to use the data to make quality decisions of where do you deliver, what timeline is required, and so on and so forth.

Darius Teter: At what point does Jumia decide, “We should build this in-house versus we should partner”? Is that conversation ongoing? Or maybe that’s a trade secret, but I’m just curious to know.

Juliet Anammah: You have to be comfortable with complexity if you’re going to work in Africa. We love complexity, and we enjoy taking complexity and making it simple. Like I said earlier, the problem is not assets, the problem is not people who have warehouses and hubs. All of that exists. We have people who have warehouses. We have people who have hubs. We have people who have 10 trucks or some people who have five tricycles. We have all of those assets that exist. So replicating on the asset side is not creating value. The real asset that then drives e-commerce is the engine, which is really the technology.

So, how do you know which day of the week you can make certain deliveries? What is the speed of delivery? How should you do your routing so that you’re more fuel-efficient, you also reduce distance traveled? All of those are relevant information you cannot get through just owning the assets. You get that through owning the technology that puts it all together. And the value is the fact that all those players are utilizing your technology. So you have the delivery agents who have your delivery app on their mobile phone. You’ve got the third-party logistics players who are using your hub management system in their businesses.

Darius Teter: This philosophy to connect what already exists rather than start from scratch extends beyond logistics. Jumia works with third-party companies to facilitate payments. And since their apps are already familiar to the customer, adoption is relatively seamless.

And what about payments? I mean, I’m really curious because I love this transformation and I want to get back to the transformation for the informal sector that’s implied in everything you just said. But what about payments?

Juliet Anammah: Payments was another part of it because I still remember about 2015, just not too long ago, if a consumer made a purchase on Jumia and we relied on just payment through a debit card, a credit card, and had to clear on the back end with a bank, sometimes if there was a return, it could take two weeks because, of course, the banks at the time, e-commerce was not really something that they were really focused on. So we had to develop our own payment system, again, using the same principle of integrating different payment methods that a consumer could have into a seamless platform that will allow us to clear whether it was credit card or debit card or mobile money or bank transfer. Whatever payment method that a consumer had, we could also integrate it on that network. So that’s the third component, and that’s why those are the three parts of our ecosystem.

Darius Teter: I want to dig down a little bit more into the payments piece. I’m going straight into the weeds because that’s where I love to be, but are you using third-party payment providers? I mean, there’s so many startups now in this space, fintech space in Nigeria, there’s a lot of venture capital flowing in. I mean, I’ve lost track of how many of them there are. Are you doing your own thing, or are you working with all of these third-party providers?

Juliet Anammah: We are agnostic, so we’re working with all third parties. And especially given how large the market is, the real value you bring to consumers is not limiting them to your own solution, it’s actually giving them a platform through which they could use whatever payment methodology that they have.

Darius Teter: E-commerce is relatively new in Africa, and platforms like Jumia are transforming the informal market. One example? Access to information.

Juliet Anammah: It’s huge. I mean, because, look at the number of sellers in Africa who are small-medium enterprises in the informal market. And then when they get onto Jumia, look at the kinds of information that is available to them. Suddenly they know, for example, which ones of their items are fastest moving, at what price points, which particular color. If you are in fashion, if you’re a fashion seller on Jumia, you suddenly know whether it’s the blue shirt or the red shirt that actually sells better than the other SKUs [stock-keeping units] that you have. That’s very powerful information. They get information in terms of even the placement of the products, the product information which they put up on site, they get information on their seller score and all that. So really formalizing informal trade, it is a huge, huge benefit that an e-commerce platform like Jumia is bringing to the sellers in Africa. So that’s a huge part. That’s a really big transition from where they were before.

Darius Teter: I love that, that’s the data analytics piece, which is, for some of them, I think probably data they’ve never had or they had intuitively or they had it on paper and pen. Can you tell how many of your sellers are new sellers? I mean, in other words, that they would not be in a marketplace if it wasn’t online.

Juliet Anammah: Oh yes. We ran a survey recently, and we have between 30% to 40% of our sellers who say they started their businesses exclusively on Jumia. Some sellers start their businesses on Jumia. Some sellers came to Jumia to expand their businesses. But what I actually find extremely interesting is the number of women sellers that we have on Jumia. We have, at least in Nigeria and Kenya, which are key markets, about 51% of our sellers actually women. Why do women find it attractive? It’s a gender agnostic environment. You could be a fashion seller. You could be an electronic seller. It’s not a physical market where someone can make those kinds of gender-related decisions of whether I want to buy an electronic product from a woman or not.

So that has given them access to different categories that they could perform in. Two, it has also given women flexibility to be able to manage their homes and at the same time run a business of their own. Then, third component that women say they really appreciate selling on Jumia is the training, training on digital marketing, training on how to sell online, training on even how to read your account statements. Just those basic kinds of training, the importance for an SME just cannot be overemphasized.

Darius Teter: I love that point. We’re always trying to get more women CEOs into our program, and we did commission a study to look at what are some of the ba’at’s our area of attention for this first year. I mean, this is the first year that we’re actually putting together our practices, what we are doing, and we would have our first report next year. A very practical example is, how many sellers on Jumia are classified as SMEs? How many sellers on Jumia have been able to get access to working capital loans to grow their businesses? How many sellers on Jumia are women? How many of them have utilized the training facilities that we provide? How many of them have utilized the loans to be able to grow their businesses? Those are huge, huge areas of sustainability that we haven’t even scratched all of it. Let’s utilize what we have first and then there are other levers which we can also concentrate on. So those are some examples for you there.

Darius Teter: There’s a great question here, I’m going to jump in on this one because this is actually a direction I wanted to go. “How does Jumia evaluate markets for potential entry? Do you ever decide markets are no longer viable?” The person who’s asking this question mentions that Jumia pulled out of Cameroon. I want to tack on my own question to that. You mentioned you’re in 11 countries, 500 million people, and accounting for some enormous percentage of the total GDP on the continent. Can you go to this question and talk a little bit about the barriers to regional expansion and what you look for when you pick a new country to enter?

Juliet Anammah: The questioner was actually right. Yeah, we had to pull out of Cameroon. Remember, there was a time when Cameroon, the internet was shut down for almost a whole year. These are very important factors that we look at. We look at the state of the economy. Beyond GDP, beyond economic factors, we’re also looking at readiness for an internet-based business like ours. So those are very important nuances that we consider in terms of looking at expansion. For now, we’re deepening our footprints within the countries that we are in. Maybe in the future, but certainly for this year, we’re really concentrating on those 11 countries where we are currently in.

All said and done, we are the largest e-commerce platform on the continent, but also in a continent where e-commerce and, I would say, all of modern trade is probably still within the ranks of 2-5% of total retail. So you still have a huge upside, huge, huge upside. Before you start tinkering with all the kinds of categories and new verticals and so on, just even that alone is a significant area to focus on. And that’s what our focus is. I think the other thing we are focusing on as well is really the shift that consumers have made from using e-commerce, coming to Jumia to buy their electronics. They wanted to buy products of high value because they could get a good price on Jumia and they could get quality assurance and all of that, to their everyday products. So people want to buy food. People want to buy essential items, home cleaning agents, beauty and perfumes, consumables, basically. That’s a huge shift, and that’s where we are also deepening our presence.

Darius Teter: I want to go to the competitive landscape in a second, but I want to pause and talk about consumables. Because, I mean, one of the things that make consumables possible here in the United States is that you can get it tomorrow, right? You can get your vegetables, they’re still fresh. They are maybe even cold packed, right? You need a toilet roll, you need cleaning products, whatever it is. Is that a big deal? Is that important to your consumers that they get something really fast, or not yet?

Juliet Anammah: Yeah, there’s always a trade-off. Sometimes it’s the consumers’ living environment that flows into their expectations. So because in the States, right next to the corner there’s either a Kroger or there’s a Target or there’s a Wegmans or any other brand that you can pop into and buy, so that flows into consumer expectations of, “When do I want it? I want it in 10 minutes.” Of course, you can use Instacart as well and you get the product very quickly. In our environment, it’s slightly different. Consumers are making trade-offs, and for them, probably the pricing is more important.

Darius Teter: I got the perfect question here for you that just follows on this. “As part of your impact goals, does Jumia have any special role in supporting or facilitating local manufacturing in the countries where you operate?”

Juliet Anammah: We work very closely with brands. We have several brands that are listed on Jumia. We see an increasing interest from brands to be on Jumia for many reasons. One being, of course, that it gives an opportunity for them to go direct to the consumer through Jumia as a platform. Two, it gives them very useful consumer insight. A lot of that consumer insight is in terms of packaging, in terms of product specifications. All of that is useful for a manufacturer in product development and production. So the answer is yes, local manufacturers find being on Jumia extremely useful for their demand planning and production.

Darius Teter: Let’s pivot a little bit to the competitive landscape. Who are your competitors? Is it Konga or Takealot, other e-commerce companies that are in the continent, or is Amazon a threat from afar?

Juliet Anammah: I think when you look at it, at the end of the day, competition is more the informal market, right? Because all of that put together, you’ve just talked about whether it is Konga or Takealot or any other platform or modern brick-and-mortar retail and so on and so forth, all of that, like I said earlier, is just 2-5% max. The real competition is the informal market. We are every day working to bring more and more sellers to the platform and bring more brands to the platform, excite more consumers. We’re currently having our Black Friday campaign on. It usually is a very exciting period for consumers.

Darius Teter: I had no idea that existed on your platform.

Juliet Anammah: Oh, we were the first to launch it in Africa in 2014.

Darius Teter: Around here, that’s when I try to go for a hike in the woods because it’s too mad everywhere else. Let me ask a bit more about where does Jumia look for its vision. Do you look more to the east, Chinese e-commerce like Taobao or JD or Doyen, or do you look more to Western models as you think through your growth strategy?

Juliet Anammah: I would say we are much closer to the Asian Alibaba model because we are more of a marketplace. But then, there are structural differences between Africa and China. Some of the infrastructure developments, even things like having a national postal system and driving down the cost of postal services, some of those things which Taobao, for example, leapfrogged in developing in China, we don’t have those in Africa. So we look more at our consumers, I would say, in terms of what are the expectations, what are their needs, what’s evolving for them in the market, what’s critical?

Darius Teter: Brands have begun selling directly through social media, cutting out the middleman. I asked Juliet how social commerce factors into Jumia’s future plans.

Juliet Anammah: e view social commerce as complementary in some respects in the sense that there’s a lot of social commerce on WhatsApp and Instagram, but it’s also exposed some of the challenges of social commerce in terms of protection of consumers. Sometimes you order something and it doesn’t get delivered, and you don’t have a system whereby you can trust in the returns process, you can trust in quality assurance, and so on. Every time we poll our consumers, they tell us that one of the things they really, really love on Jumia is they don’t want to deal with a seller. They don’t care who the seller is, okay? I’m speaking figuratively. The person they have a relationship with is Jumia. So if something goes wrong, they want to know that it’s Jumia they’re dealing with. We always talk about the fact that when you are ordering online, that many things we provide, the item has probably been QC’d [quality controlled]. You can see the seller’s score so you can make decisions between multiple options, which seller to go with, payments, and all of that. So there’s a whole lot that’s riding on just completing a purchase online that consumers like the option of having someone, the intermediary, the platform that is taking some of those responsibilities for them.

Darius Teter: One of the biggest hurdles for any e-commerce company is building trust, that if I give you my money, you’ll send the product. This is especially true in markets where those online buying habits haven’t been well established. I asked Juliet, “What has Jumia done to create trust with buyers and sellers?”

Juliet Anammah: For any marketplace, of course, you would have issues sometimes with sellers and so on and so forth. But like you mentioned, we do have recourse mechanisms. We have penalties. We score sellers by many things. By speed of delivery, by the quality of the item, by the return rates of the items that they sell on the platform. So many things are built into it. And of course, we have seven items which must be QC’d. We have manufacturer warranties. We offer everything they can think of from a recourse perspective. And for some of our consumers also, depending on the type of item and the specific consumer’s behavior on our platform, sometimes the consumer wants to return something, and we refund immediately even before the item is retrieved. There are many things we’ve built into creating an environment that consumers can trust and feel comfortable to shop online.

Darius Teter: We’ve heard a lot about what Jumia has done to change the commerce paradigm in Africa. And as we wrapped up our conversation, I asked Juliet how much she thought e-commerce would actually drive development across the continent.

Juliet Anammah: I mean, it’s already contributing to development on the continent. There was a BCG [Boston Consulting Group] report that talked about the fact that, look, marketplaces like Jumia by 2025 could contribute almost three million jobs on the continent. So in terms of you’re talking about jobs, that’s one. Number two, you’re talking about formalizing informal retail, like you mentioned. You also recognized another … which is the cross-border trade within Africa itself. So those are many pathways and many areas in which e-commerce and companies like Jumia can make significant contributions to the continent.

Darius Teter: We tend to think of these shifts as inevitable, a byproduct of technological advances, but I think Jumia shows how much careful thought and effort have to go into solving a host of problems in traditional, largely informal markets. Their commitment to using existing assets and working with partners who are already on the ground has eased adoption. Trust was built with tools for buyer recourse and access to information for sellers, and collaborative work with regulators will help solidify their standing as they create their own paradigm for commerce on the continent.

But Jumia is not alone. Although the potential pan-African market is huge, there are many new and some established players competing aggressively for it. I do wish Jumia all the best as they seek to scale. Thanks to Juliet Anammah of the Jumia Group and to Luke Sykora in the Entrepreneurial Thought Leader series for organizing this conversation. If you’d like to check out the full talk, you can go to the Stanford eCorner YouTube page, or follow the link in our show notes.

Women in the workplace face unique challenges and opportunities. That’s why I’m excited to introduce two programs designed for women leaders like you, offered by Stanford GSB Executive Education and led by Maggie Neale and Deborah Gruenfeld. High-Potential Women Leaders is a live online program, and the Executive Program in Women’s Leadership is a one-week on-campus program. Both equip you with the tools and mindset to fundamentally change the way you lead. Visit stanfordgsbwomen.com to learn more. I’m also excited to share with you that season two of the Grit & Growth podcast will feature interviews with both Maggie Neale and Deborah Gruenfeld.

This has been Grit & Growth with Stanford Graduate School of Business, and I’m your host, Darius Teter. If you liked this episode, leave us a review on your podcast app. It really helps us to share the stories of these incredible entrepreneurs with as many people as possible. To learn how Stanford Graduate School of Business is partnering with entrepreneurs throughout Africa and South Asia, head over to the Stanford Seed website at seed.stanford.edu/podcast. Laurie Fuller researched and developed content for this episode, with additional research by Jeff Prickett. Kendra Gladych is our production coordinator, and our executive producer is Tiffany Steeves, with writing and production from Andrew Ganem, and sound design and mixing by Alex Bennett at Lower Street Media. Thanks for joining us. We’ll see you next time.

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