The Chief Executive Officer, Jumia Nigeria, Mrs. Juliet Anammah, spoke with journalists on the benefits of the company’s recent listing on the New York Stock Exchange, and how the e-Commerce firm intends to showcase Africa’s digital technology innovation. Emma Okonji presents the excerpts:
Jumia was recently listed on the New York Stock Exchange (NYSE). What were the motives for the listing?
Yes, we listed on the NYSE and we are glad we did because it is the largest stock exchange in the world. Many technology companies are listed on the NYSE such as Alibaba, Twitter, and Snap. By joining the NYSE and by being the first African technology company to do so, we want to show the digital innovation happening in Africa and the opportunities from Africa in terms of technology and e-commerce. We contemplated several venues, ultimately, we met a lot of investors and New York seemed the more natural place given the number of investors familiar with the business model. More investors have a marketplace and tech focus in New York than in any other place. We made a logical choice.
So why the Initial Public Offering (IPO)?
We have been private for seven years, and we see a lot of positive aspects to being public, hence our decision to float an IPO. For us, this is really about creating more trust and raising the public profile to help with the business. So raising the public profile is going to help us bring more sellers to Jumia. Many sellers or partners are yet to know about us, and once they do, we hope they will be keen to work with us. We also hope this will help us build even more trust with consumers, in particular, those who are still not comfortable with e-commerce, may now see us as an established company and we hope this will help our growth and consumer adoption. We also hope that the listing will help us with talent recruitment, retention, as we aim to attract more attention from top talent.
What was the size of the IPO and what is the valuation of your company?
I will like to refer you to the registration statement on Electronic Data Gathering, Analysis and Retrieval (EDGAR), which is an online public database from the United States Securities and Exchange Commission (SEC). EDGAR performs automation collection, validation, indexing, acceptance, and forwarding of submissions by companies and others who are required by law to file forms and company’s information with the SEC.
What is the scope of Jumia and is it right to call it an African company?
Yes, it is absolutely correct to call Jumia an African company because Jumia only operates in 14 Africa countries and will never go anywhere else. Jumia has invested heavily in tackling major infrastructure challenges including investing in logistics and delivery. It has also developed a proprietary online payments technology. It’s also worth noting that though the two Chief Executive Officers (CEOs) of the company are French, just like many companies where CEOs/Founders are of a different nationality, and a small team of key account managers in Dubai, to oversee partner brands whose headquarters are in Dubai, Jumia’s management and staff in most countries are largely local, including country heads. We directly employ more than 5,000 people in Africa and believe that our business has a significant indirect impact on job creation across the continent.
What kind of investors do you have at Jumia presently?
Jumia has international shareholders, like many other companies and we are bringing investors to the African tech scene and building the economy and talent there. Though initially funded by German investors in 2012, we got one of our main shareholders, which still operates till date, MTN in South Africa. It is amazing that international investors are bringing positive news to the whole tech scene in Africa and for many more startup companies after us. Now that we are public, any African investor is welcome to invest in Jumia. Nigeria is our headquarter in Africa, and our incorporation in Germany, is a way to get foreign investors excited to send funds to Africa to boost our operations.
What exactly is the mission of Jumia?
Our mission remains to help our consumers’ everyday lives better and save time and money. We are also helping our sellers grow their businesses through our platform; as evidenced by the fact that we have fostered economic growth for 80 thousand sellers on the continent.
Can you explain the reason for the financial holding in Berlin?
Most international investors have challenges when they try to push money to sub-Saharan African countries as investment. So they’re more comfortable with investing in companies incorporated in the U.S. or markets they’re more familiar with.
Despite your spread in 14 African countries, Jumia has not been profitable. What is the plan to become profitable and satisfy investors?
Jumia is growing rapidly. Please understand that we are not able to comment on the specific projections. You can see in the registration statement that in 2018, Jumia delivered GMV growth of 63.3 per cent, and revenue from third party sales grew by 121.5 per cent. For the last two years, Jumia has also delivered positive platform contribution at group level, and for the biggest market, Nigeria, positive contribution after all fulfilment expenses during the second half of 2018. We are working on the long term, we have invested heavily in infrastructure such as warehouse, logistics, marketing and management. Among our existing shareholders are investors who are operating in Africa.
What’s the competition like in Africa?
For us at Jumia, there is no other pan- African player. No local competition in most of our markets except South Africa and Egypt. In South Africa, there is Takealot, who belongs to Naspers. We are focused on the fashion vertical in this market. In Egypt, there is Souq, which is Amazon. Amazon bought Souq in 2017, Souq is a Middle East player with presence in Egypt. We’ve been growing very well since then, and the reason we’re doing very well in Egypt is because we are very agile, and very local. We feel very positive about our position in this market.
What are the intentions of your shareholders, it seems they all want to sell and your share price is going to be hurt from that?
This IPO is all primary, and is about providing the resources to the company and not to selling shareholders.
Why do you have your development centre in Portugal?
People in Africa are super talented and entrepreneurial. There are great developers in Africa – what has historically lacked is infrastructure. We made the decision in 2012 to host our development team in Portugal because it made sense to do so due to technical reasons. It was the best option for us due to the internet connection, data centre, and the cloud computing system.
Do you have any developers working in Africa?
We do, though in limited numbers in Nigeria, Morocco, Egypt and South Africa and they are 100 per cent Africans. We are focused on providing skills training and development to our local teams across African countries where we operate, to enhance local talent and support. We continue to watch the exciting evolution of development talent closely. Outside of this, we are committed to localising talent and building skill sets, which is what we have done in the last two years in paid marketing, shops, among others. We are not only a tech company but an e-Commerce one at that. No one else on this continent is developing people with pure e-Commerce skills as much as we are commercial, content development, last mile logistics, operations, customer service, among others.
When do you think you will have all your developers in Africa?
Andela is the living proof of this and there are several other initiatives everywhere. Yet, there is a huge need for developers across all economic sectors and it’s hard for companies to find enough developers. This is true in Africa, and all the world also, which is why a lot of companies have multiple tech centres and not only one. We already have developers in several countries of Africa and are super committed to recruit and train even more. Everything should be in Africa.
What are your plans to help the local start-ups?
Jumia also acts as an incubator, where a lot of talent passes through and is developed; as we reinforce the value of learning and growth. As a result, we have ignited a vibrant scene of Jumia alumni who now run their own startup companies across Africa and are doing very well. Our aim, as we grow, is to also empower those who encounter Jumia in all levels.