E-Business
Jumia Food Exit Shows Folly of Not Following Konga Strategy
The recent announcement of Jumia Food’s exit from Nigeria, its biggest market, has set alarm bells ringing among industry watchers. Dr. Fred Bongani, a former employee and founding staff, examines the fallouts from this latest misadventure
E-Commerce, despite its potential as a goldmine, remains one of the most challenging business sectors in Nigeria and indeed, the African continent.
The obstacles that lie in the path of businesses intent on cracking e-commerce on the continent are well-documented, among which infrastructural deficiencies, logistical hiccups, skepticism for online shopping and predilection for offline retail, slow adoption of digital payment, among others, figure prominently.
Nevertheless, Africa is widely regarded by experts as the next frontier for bullish e-commerce growth.
Compelling insights from recent research by the International Trade Administration (ITA) shows that Africa represents a smart gamble for interested investors looking to reap the benefits of the wave of growth in e-commerce on the continent. Titled – The Rise of eCommerce in Africa – the study bets on the exponential boost in mobile technology that is expected to jumpstart e-commerce from its current middling status to a multi-trillion-dollar industry in the coming years.
“The logic of growth on this area is pretty much based on technology jumps that do occur within Africa because of historically missing economic infrastructure, such as banks, telecom landlines, etc. Africa is forecast to surpass half a billion ecommerce users by 2025, which will have shown a steady 17% compound annual growth rate (CAGR) of online consumers for the market,’’ the study boldly asserts.
Specifically, the research shows that Africa currently leads the world in mobile device web traffic generation, with 69% of its total web traffic consisting of mobile internet users as of 2021. Further, the continent is forecast to be almost exclusively mobile-based market by 2040.
Continuing, the study notes that: ‘‘Compared to other regions, as of 2021 the African continent leads mobile internet usage a full 13% above the global average, and almost 5% more mobile usage than Asian region markets. This should indicate a “mobile-first” approach to any business looking to sell online to the various African markets.’’
The foregoing is backed up by a 2017 Accenture Digital Consumer Survey which discovered that in countries such as South Africa, smartphone acquisition increased from 52% in 2016 and 63% in 2017. Some of the more technologically advanced nations like Kenya and Nigeria boast a smartphone uptake of more than 44% and 30% respectively. Across the continent, the number of smartphone users saw a nearly two-fold increase, reaching more than 226 million. This spike in smartphone penetration, the survey submits, is steering a digital revolution on the continent, exposing users to the endless opportunities the internet provides, top of which is e-commerce.
Considering these lofty assumptions, it therefore came as a huge shock when Jumia, a multinational African-focused e-commerce company disclosed that it will shut down Jumia Food, its food delivery business in Nigeria, Kenya, Morocco, Ivory Coast, Tunisia, Uganda, and Algeria by the end of 2023 in a new round of cost-cutting.
Jumia CEO, Francis Dufay told Reuters that the food delivery segment has challenging unit economics and big losses, while also attributing the closure of Jumia Food to increasing competition and unsustainable cost of operations.
“There is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers,’’ Dufay had stated.
The Jumia Food debacle represents another signpost in a seeming never-ending list of missteps and abrupt exits by the management of Jumia since it set up shop in Africa. This includes the offloading of Jumia Travel, its hotel and flight services vertical in 2019 to a rival brand, Travelstart – a move which came a few weeks after the shutdown of its eCommerce businesses in Tanzania and Cameroon and laying off staff in Kenya. Founded as Jovago in 2013, the hotels and flights marketplace became Jumia Travel after it rebranded in 2016. Earlier in 2017, the company had sold off Jumia House, its real estate subsidiary to ToLet.com.ng, a property startup, after it failed to scale.
To start with, Jumia is a German-headquartered e-commerce platform, with its technology and product team based in Porto, Portugal, and until recently, its senior leadership operated out of Dubai in the United Arab Emirates (UAE). Yet, it lays ambitious claims to becoming the African Amazon – a faulty dynamic worsened by a damaging identity crisis and the importation of business principles and strategies fit for the Western world and which the management expected to succeed in Africa, a developing continent with its myriad of teething challenges. Indeed, several critics regard Jumia as an exploitative Western company that conveniently co-opted an African identity to extract as much value as possible and profit off the continent.
As one of the founding employees of Jumia, I had expressed reservations at the ease with which the early-stage founders of the company had been eased out of the business. Every business has its DNA which symbolizes the very essence, cornerstone or soul of the establishment. This ideal is often reposed with the visionaries of the business and consolidated over time as the business scales. In the case of Jumia, what we had was a wannabe e-commerce behemoth with a major identity crisis. This foundational ambiguity would prove to be one of the catalysts that hurt the business in the long run.
At the height of the Jumia-Konga battle for the dominance of the Nigerian e-commerce sector when both brands launched in 2012, one thing was discernible: Jumia was often quick to arrogantly ridicule or thumb its nose at any innovation or strategy pioneered by a rival brand, even if it was a masterstroke, although the lessons of history showed that it may eventually ape the strategy when it realizes there is a market advantage therein. Those early days of e-commerce, particularly in Nigeria where I was based at the time, was one full of hype and little substance as both giants embarked on a battle of attrition for the leadership position in Africa’s biggest market. It took the coming of Yudala which was founded by a fresh-faced varsity graduate and backed by Nigeria’s biggest technology group to make both rival brands sit up and become more intentional about the substance of their hyped-up efforts (more on this later).
In early 2014, Konga pioneered the marketplace structure that is now a major staple of e-commerce on the continent. In its usual fashion, the management of Jumia derided it as a DOA (dead on arrival) strategy. However, it soon ate its words after advice from some of us in the business who saw how Konga was already stealing a march on us. Five months later, specifically in July 2014, Jumia followed suit with its own marketplace.
Then came the entry of Yudala – a landmark development that shook up the e-commerce market in Nigeria. Led by Prince Nnamdi Ekeh who was 22 at the time and just fresh out of school, Yudala pioneered the composite e-commerce model with the fusion of online and offline – a futuristic piece of innovation that has now been adopted by other global players. Yudala’s emergence was a refreshing relief to the chokehold of Jumia and Konga. The brand, though big on hype as its older rivals, matched its words with true substance.
In addition to rolling out eye-catching fuchsia-pink retail stores across major cities in Nigeria, Yudala took on big projects which expanded the scope of the industry. One of these remarkable milestones was the first ever drone delivery in the e-commerce world – a feat which was achieved in 2015 and which predated any other similar efforts.
When in 2018, the management of Zinox, the technology conglomerate backing Yudala, acquired Konga from its previous owners, Naspers and AB Kinnevik, it was obvious to all interested parties that this was a development worth keeping an eye on. In my own capacity, I had also advised the management of Jumia, especially considering the renowned capacity and decades of experience and success at the disposal of the new owners of Konga, to keep tabs on their strategy and follow suit or even explore partnerships, if that would guarantee a path to profitability.
The dust had barely settled on the monumental news of the acquisition when the management of Zinox announced an operational merger between Yudala and Konga. Although I had departed Nigeria, I followed with keen interest how the new owners subsequently rebranded the new entity that emerged from this operational merger, slowly transforming it into a dominant e-commerce force.
It is important here to state that while Jumia decided to double down on its poorly conceived pan-African expansion and an ill-advised IPO founded on shady figures and cooked books, Konga chose to continue consolidating its growing dominance in Nigeria:
- KongaPay was repositioned and recalibrated, leading to its rating by Statista in 2021 as the leading provider of digital payment services for e-commerce transactions in Nigeria.
- In 2019, the brand added Konga Travel to its list of growing subsidiaries. A technology-driven, revolutionary online travel booking agency, the new entrant gained prominence and market relevance within a short period of time.
- From Kxpress, the management of Konga relaunched its delivery arm to Konga Logistics, expanding its fleet of vehicular assets and by extension, its capacity to not only handle Konga’s last mile deliveries but also cater to external customers.
- Konga Health, a digital health care distribution subsidiary joined the fray in June 2021. Today, the brand boasts exclusive distribution agreements with global brands such as L’Oreal and Livful, among others.
- Konga embarked on an expansion of its retail outlets and the set-up of massive warehousing facilities in regions across Nigeria, including what is arguably the biggest warehousing structure in Lagos located at Lekki
Amid all these major strides by its major rival, Jumia endured an embarrassing exposure of its IPO as a worthless sham by the popular US-based short-seller Citron, with its share price, which once traded as high as $60, now going for less than $4 today. The stubborn insistence of management in not borrowing a leaf from the Konga copybook has also seen Jumia continuously lose ground in Nigeria and in other less buoyant African markets.
The current exit of Jumia Food leaves a sour taste in the mouth, particularly for those of us who number among ex-employees of this once-grand e-commerce pioneer. In addition to remaining unprofitable over the years, Jumia is still shipping huge losses, as high as $19 million in Q3 2023.
With its share price tumbling down by the day and investors now potentially hedging their bets on the brand, how much longer can Jumia keep its head floating above murky waters in Nigeria before calling it a day for its remaining core physical goods delivery segment and struggling payment service, Jumia Pay?
The jury is out on that.
Kike Technologies, a Nigerian technology firm, has launched ‘Kike AI’, a revolutionary artificial intelligence-driven kitchen application designed to transform Nigeria’s food and cooking gas industries.
The app aims to enhance convenience for consumers while optimising gas supply through predictive technology.
Speaking at the launch event, Femi Oye, CEO of Kike Technologies, highlighted the app’s ability to address a common household issue, unexpected depletion of cooking gas.
“Using advanced algorithms and data analytics, this app can forecast when a user’s gas cylinder is running low, enabling them to order refills ahead of time,” Oye explained.
Beyond individual household benefits, Kike AI is expected to have a broader economic impact by creating jobs within the logistics, gas retail, and food industries.
“We anticipate significant job growth as the app gains traction, particularly in delivery and gas station services,” Oye noted.
The app is also designed to bridge the digital gap, specifically targeting women and marginalised groups by providing them with opportunities to showcase their culinary skills and earn a sustainable income.
According to Oye, this initiative will not only empower women economically but also help preserve Nigeria’s rich culinary heritage.
By leveraging AI technology, Kike AI aims to revolutionise everyday cooking experiences, support economic development, and create essential employment opportunities in Nigeria’s growing tech and food sectors.
The application is expected to drive a shift towards more efficient cooking gas management, ensuring affordability and ease of access for millions of users.
Data workers in Africa often have a hard time, according to a report published in theconversation.com, a nonprofit, independent news organization dedicated to unlocking the knowledge of experts for the public good.
The article by Mohammad Amir Anwar, senior lecturer in African Studies and International Development, University of Edinburgh, found that data workers in Africa face job insecurities – including temporary contracts, low pay, arbitrary dismissal and worker surveillance – and alarming physical and psychological health risks.
The consequences of their work can include exhaustion, burnout, mental health strain, chronic stress, vertigo and weakening of eyesight.
Data work includes text prediction, image and video annotation, speech to text validation and content moderation.
The world of data work is built on labour arbitrage – exploiting the fact that workers earn less and have less protection in some countries than in others.
Large technology firms often outsource this work to the global south, including African countries like Kenya, Uganda and Madagascar, and also India and Venezuela.
The result is complex production networks that are generally opaque and shrouded in secrecy.
Workers and researchers have issued many warnings about data workers’ health.
Despite numerous court cases in multiple jurisdictions, nothing much has been done to address these issues either by tech companies or by regulators.
Still, the news of the death of a Nigerian content moderator, Ladi Anzaki Olubunmi, who was found dead in her apartment in Nairobi, Kenya on 7 March 2025, came as a shock.
While the circumstances of her death are still unclear, it has renewed calls for wider systemic change.
Her death has sparked condemnation from the Kenyan Union of Gig Workers, which demanded an investigation.
Since 2015, we have been studying the central role of African data workers in building and maintaining artificial intelligence (AI) systems, acting as “data janitors”.
Our research found that companies rarely acknowledge the use of human workers in AI value chains, thus they remain “hidden” from the public eye. In other words, the world of AI is built on the toil of human workers most people are unaware of.
In this article, we outline key steps needed to protect these data workers in Africa.
They include business process outsourcing regulations, ensuring quality rather than quantity of jobs, and providing social protection. There is also a need to name and shame companies that maltreat data workers.
Data work needs tighter regulation.
Regulation
Business process outsourcing is the practice of procuring various processes or operations from external suppliers or vendors.
Firms that do this are sometimes trying to evade local regulations (like minimum wages) and responsibility towards workers’ welfare (via sub-contracting and the use of temporary employment agencies).
This is happening in Africa as some data training firms and digital labour platforms circumvent local labour laws.
But there is more to the story.
Data work is also seen by lawmakers and practitioners as a solution to the rampant unemployment and informality across Africa.
African governments have actively created regulatory environments that enable these practices to thrive, despite adverse outcomes for workers.
Nonetheless, new regulations have been proposed lately, like the Kenyan government’s Business Law (Amendment) Bill, 2024 targeting the wider business process outsourcing and IT-enabled services sector.
Particularly, it makes business process outsourcing firms responsible for any claim raised by employees. It ensures some accountability for firms bringing data work to Africa.
Other governments should follow with similar measures ensuring worker rights are enforceable. Some data workers are hired on contracts as short as five days and get paid less than the local minimum wage.
Firms found violating labour standards should be penalised.
In fact, there is an urgent need to create regional or continent-wide regulatory frameworks covering the business process outsourcing sector, limiting the space for firms to exploit workers.
It’s possible, however, that jobs might be lost as firms relocate to places with favourable laws, an everyday reality in the outsourcing networks.
Quality, not quantity
African governments should prioritise the quality of jobs and not quantity. Policymakers should think about wider national economic development plans, particularly structural diversification and upgrading of their economies.
Historically, these strategies have resulted in success in some states, addressing social and economic issues such as unemployment, poverty and inequality.
Another option for African governments is to enhance social protection among data workers.
Financing this is a serious issue, so proper taxation and compliance among workers and employers is urgently needed.
Finally, there is a role for naming and shaming firms that treat their data workers poorly. There is evidence that such efforts improve compliance and firms’ behaviour.
Worker movements
African data workers have taken risks in openly speaking about their experiences.
But these kinds of approaches work well when combined with collective bargaining.
Workers have historically won their labour and civil rights after long and hard-fought struggles.
There is a long history of African worker movements and trade unions resisting the apartheid and colonial regimes across the continent.
While the freedom of association is enshrined in the African Charter on Human and Peoples’ Rights and most governments have legislation committed to collective bargaining, it is rarely implemented in the new outsourcing sectors, particularly data work.
It is also difficult to organise workers in the industry, because of the high churn rate. For instance, data training firms like Sama offer short-term contracts to employees, often as short as five days.
Some firms are hostile to workers’ organising activities.
But numerous data worker-led associations have emerged in Africa recently, some led by the co-authors of this article.
Techworker Community Africa, African Tech Workers Rising, African Content Moderators Unions and Data Labelers Association are among them.
These initiatives are crucial to ensure workers have decent remuneration, work-life balance, adequate working hours, protection against arbitrary dismissal, safe working environments, and contributions towards their health and welfare.
Several high-profile court cases are currently being pursued by African data workers against Meta and Sama.
There is precedent. In 2021. Meta was ordered by a Californian court to pay US$85 million to 10,000 content moderators.
AI-dependent tools such as ChatGPT or driverless cars would not exist without African data workers. They are tired of being “hidden”. They deserve to be treated with respect and dignity.
Mophat Okinyi, Kauna Malgwi, Sonia Kgomo and Richard Mathenge co-authored this article.
National Identity Management Commission (NIMC) said the National Identification Number (NIN) is a mandatory requirement for securing government loans.
NIMC said on its social media platform that the identity number has become compulsory for Bank of Industry (BOI) loans.
NIMC said, “Enroll for your NIN today to access business aid and other opportunities from the Bank of Industry.
“To access the services of the Bank of Industry (BOI), enroll for the NIN.”
Recall that the federal government, through the Federal Ministry of Industry, Trade, and Investment (FMITI), established three funds totaling N200bn to support businesses across Nigeria.
The fund will be accessed at nine per cent interest, to be disbursed by the Bank of Industry (BOI).
The funds established by the government were the Presidential Conditional Grant Scheme (PCGS), the FGN MSME Intervention Fund, and the FGN Manufacturing Sector Fund.
The government appointed BOI as the executing agency for the funds and is empowered with the responsibility for their day-to-day administration.
“The Presidential Conditional Grant Scheme (PCGS) is a N50bn grant scheme to support eligible Nano Business owners. The grant will be disbursed to a minimum of 1,000 beneficiaries, especially women and youths, per Local Government Area (LGA) in the 774 LGAs across the nation and the six Council Areas in the FCT.
“The target Nano businesses include traders, food vendors, ICT businesses, transporters, artisans, and creatives, among others,” said Dr. Olasupo Olusi, managing director/chief executive officer, BOI.
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