E-commerce in Africa: Jack Ma says it’s “virgin land”, Releaf and Jumia (seem to be) struggling [BUSY DIGEST]

Jack Ma, Alibaba, billionaire, e-commerce

E-commerce has been a hot topic in the business world, especially in Africa as more players enter this field every year and more people embrace selling and shopping online. In this Busy Digest, we explore three recent news stories about e-commerce on the continent.

Jack Ma Sees E-Commerce as Africa’s Big Business Opportunity (by Yinka Ibukun)

What’s the gist of this story?

Jack Ma, the co-founder of global e-commerce giant Alibaba, said African entrepreneurs will find countless opportunities in e-commerce, logistics and e-payments as the continent prepares for the start of the African Continental Free Trade Agreement which is set to go into effect in July 2020.

What quote(s) stand(s) out in the article?

 “People like e-commerce, today people trust e-commerce,” said Ma, “It’s just like virgin land. People need it.”

What’s the background?

Ma was recently on a tour of West Africa that included Togo, Ghana and Nigeria. In 2017, Ma visited Kenya and Rwanda and then South Africa in 2018, where he launched the Netpreneur Prize, a $10 million competition for African tech innovators.

Here’s a couple of BusyQuestions to consider:

1. Do Africans in particular really like and trust e-commerce?

2. If Africa is “virgin land” for e-commerce, who is going to farm it?

…and one more

3. Will the African Continental Free Trade Agreement work as expected?

Is Releaf.ng, the Y Combinator-backed agritech startup struggling or just under the radar? (by Tage Kene-Okafor)

Releaf founders (photo credit: Just Shoot Photography)

What is the gist of this story?

Nigerian agritech startup Releaf looked set for a meteoric rise after securing significant financial and advisory backing but according to this tech journalist, things are looking rather shaky if their website is anything to go by.

What quote(s) stand(s) out in the article?

“Completely different from the content on its previous website, Releaf says it now processes and delivers raw materials to agricultural factories in Nigeria with emphasis on the vegetable oil industry.

This might imply that the startup has pivoted from its initial proposition of connecting sellers of agricultural products with already available sellers to selling raw materials to food factories in Africa.”

What is the background?

Releaf started as an online marketplace that connects buyers and sellers of agribusinesses to trustworthy customers in 2017. It went on to be accepted into Y Combinator’s (YC) Summer 2017 batch, securing $120,000 worth of funding along with that. In 2017, the startup took on Nigeria’s former Minister of Agriculture and Rural Development, Akinwumi Adesina and Ifueko Okauru, board member of Nigeria Breweries Plc and Diamond Bank Plc as advisers.

Here’s a couple of BusyQuestions to consider:

1. Why has Releaf abandoned its old approach?

2. What challenges lie ahead in its new approach?

Jumia’s Cameroon exit could be the first step to shrinking its beleaguered e-commerce business (by Amindeh Blaise Atabong)

(image sourced from: guardian.ng)

What is the gist of this story?

Pan-African e-commerce giant Jumia has suspended its Marketplace business in Cameroon without any prior notice, taking many customers and local staff by surprise. Some speculate that Jumia may leave more markets soon but Abdesslam Benzitouni, group head of communication told Quartz Africa by e-mail that Jumia has no closure plans in the short-term in the other 13 countries where they continue operating i.e. Nigeria, Egypt, Morocco, Kenya, Côte D’Ivoire, South Africa, Tunisia, Algeria, Ghana, Senegal, Tanzania, Uganda and Rwanda.

What quote(s) stand(s) out in the article?

“But Jumia’s struggles in Cameroon may be an indicator of similar moves to come in its other African markets as the e-commerce company tries to figure out how to find its way to stem mounting losses driven by the costly investment required to build e-commerce operations in 14 different African markets which have less developed logistics and transport infrastructure. It means outside of the very largest African markets like Nigeria, Egypt, Kenya and South Africa it could be difficult to build a general e-commerce site at scale today.”

What’s the background?

Since opening for business in 2012 Jumia has racked up over $1 billion in losess. It recently lost its “unicorn” status and is wrestling court cases and fraud claims. Jumia is the third e-commerce platform to quit Cameroon, after French-owned Afrimarket earlier this year and Cdiscount in 2016. The country has been plagued by insecurity and internet cuts, making it hard for online businesses like Jumia.

More great commentary about this story:

Cameroonian-born tech entrepreneur, Rebecca Enonchong, made a Twitter thread highlighting Jumia’s failure to adapt to the local market. “Beyond #JumiaIsNotAfrican, $JMIA is simply a badly run business that is incapable of understanding its market, refuses to act as a good corporate citizen, and thinks Africans are simply a commodity, a means to an end. No business with that attitude can succeed in the long term,” one of her tweets read.

Here’s a couple of BusyQuestions to consider:

1. Will Jumia manage to stay operational in the 13 remaining countries?

2. Can an e-commerce giant really survive in Africa today?