Ghana Ecommerce industry get a boost as Jumia invades
Aba is marketing manager for a startup in Accra, and she loves shoes. She has more pairs than she can count but she badly needs a new one with a matching bag for her friend’s wedding. She is extremely busy, and can’t take the time out to go shopping. A friend mentioned an online site where she could buy them, she hesitates “how sure am I these shoes and bag will actually get to me?”
Felix is getting married in 2 months and he needs a suit, so as he usually does he goes online and finds a number of suits in his size on a well known online retailer in the United States. He then emails the link to his cousin Kwadjo asking him to buy the suit and he will transfer the money to his account or alternatively give the equivalent on Ghana cedis to Kwadjo’s mother.
Ecommerce has long being needed in Ghana but due to the barriers to entry for both consumers and merchants, it has not taken off until the last 3 years.
What are the barriers and how have they been surmounted
Payment Systems: One of the Major problems that ecommerce platforms needed to overcome was effective payments solutions to allow a safe and effective ways for consumers to pay for their goods and services. A few years back a number of organizations have built effective platforms that work within Ghana to bring not only card payments but payment through Mobile Money payment to online payments.
Logistics/Delivery: Bad addressing systems in Ghana makes it theoretically impossible for delivery of items and of services however DHL for instances took to calling their clients and meeting them where they are. Services like gOman in Accra found ingenious ways to get goods and services delivered to customers. Hellofoods in Ghana uses Motor bike riders and mobile phones to find and get to customer’s locations for delivery. It’s not the most elegant but it works.
Trust: The question that makes Aba hesitate on a purchase is; ‘Why would I spend my money and trust that this provider will actually deliver my goods?’ has greatly affected the uptake of ecommerce in Ghana. This is still an issue e-commerce platforms grapple with in Ghana however a number of sites including Jumia in Nigeria has developed an ingenious was of earning customers trust by receiving cash on delivery. This puts the customer at ease, enables repeat custom and also helps reach the unbanked.
The Enablers of Ecommerce in Ghana
The Rise of the Middle Income
Ghana has finally joined the group of countries defined as middle class with a per capita income of 47.93m with projected average per capita growth rates of 4 to 6 percent for 2014-24. (World Bank statistic)
According to the African Development Bank (AfDB), 46% of Ghanaians are now classified as middle class compared to a continent-wide average of 34.3%. The greater the number of middle class Ghanaians there are the larger the pool of natives with disposable income, a very good think for ecommerce platforms
Mobile Penetration helping along Data Penetration
National Communication Authority of Ghana reports that mobile data penetration has been rising steadily from 48.84% in February 2014 to the current level of 55%
Proliferation of “Tonaton type” sites.
The proliferation of classifieds site in Ghana has helped introduce consumers to using the internet to buy and sell. Even though most of these sites only facilitate the buyer showing and displaying his/her items, they do not do actual payments on the platform.
So it’s not very surprising that Jumia, one the biggest ecommerce platforms in Africa in 8 nations has chosen to commence operations in Ghana. This is a welcome development because, quite frankly with ecommerce in Ghana and Africa as a whole, experience and capacity counts.
Jumia is Africa’s leading online shopping destination. Customers across the continent can shop amongst the widest assortment of high quality products at affordable prices – offering everything from fashion, consumer electronics, home appliances to beauty products.
Africa Internet Holding Africa Internet Group (“AIG”) is a clear ongoing success story and the leading Internet Group in Africa. Founded in 2012, it is currently operating in 23 countries.
So far, AIG has created 71 companies in different verticals: online retail including JUMIA, online marketplace, food ordering, car classifieds, real estate classifieds, taxi hailing, online travel booking and P2P lending.
Jumia was the first African company to win an award at the World Online Retail Awards 2013 in Paris as the “Best New Retail Launch” of the year.
Jumia has always had a winning approach to ecommerce to Africa and now Ghana:
In a Forbes Article Jeremy Hodara Co-CEO of Africa Internet Holding said In Nigeria; we now have more than 500 motorbikes and trucks that deliver to our customers in the eight biggest cities of the country. Our delivery fleet is larger than UPS, FedEx and DHL in Nigeria. We own our call center, and we have our own IT team. We have our own online marketing team. Simply put, we believe we need to control the value chain from A-Z. That is the only way to grow ecommerce in Africa and large in Ghana particularly
-It thinks Growth First, Returns later which is the only attitude to take with e-commerce and African market.
– They are solving the last mile distribution/delivery problem for e-commerce in Africa by using motorbikes and vans to makes customers lives easier
-Jumia is dealing with mistrust issues by taking payment on delivery and putting customer needs and convenience first
-Riding the Mobile Train by launching Mobile Applications for their product on Nigeria, Morocco, Ivory Coast and Kenya
Taking e-commerce and adapting, localizing to the African environment
Our Amazon of Africa has arrived with the experience of learning from successfully running in Nigeria, Morocco, Ivory Coast and Kenya and enabling customers to make purchases on the online store from anywhere. They offer a selection of over 50,000 products.
So the next time Aba needs that pair of killer heels for that Christmas party and can’t bear driving all the way to Accra or Felix a new suit, they can just whip out their phones and get what they need.