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Techpreneurs Must Avoid Jumia, Konga Strategies to Survive



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By Prof. Evans Stevenson

E-commerce in Nigeria has often been touted as a difficult terrain and not for the faint-hearted.

This position is backed up by concrete facts and verifiable evidence, especially when one considers the well-documented struggles of several players in the sector. Despite the allure and glitter that the segment holds, one requires deep pockets and a strong dose of guts and bloody-mindedness to survive in e-commerce, especially in a very challenging market such as Nigeria.

Undoubtedly, the promise of e-commerce and its potential for investors to strike gold remains undeniable. The foregoing remains evident when you consider the predominantly youthful population that Nigeria possesses – arguably one of the most youthful in the world, the increasing exposure that education and the internet brings, growing data connectivity and teledensity rates as well as the burgeoning interest in the convenience and savvy that online commerce brings. Also worth mentioning is the rise in social commerce among youths in Nigeria, with many turning to entrepreneurs via trading on social media platforms such as Instagram and Facebook, among others.

But despite these promising markers, a few weighty obstacles remain for potential new entrants into the market, especially from a strategy standpoint.

I was a lead panelist at a recent Consumer Trends Research/Analysis session in Nairobi, the Kenyan capital where the conversation naturally dovetailed into the prospects of e-commerce in Africa. Crucially, the Nairobi event, which witnessed attendance from key experts, opened the eyes of many to some of the pressing challenges that have deterred investors from reaping the undoubtedly immense benefits from their portfolio investments in e-commerce platforms on the continent.

One of the few take-aways from the session was the fact that the Nigerian e-commerce market is unmistakably one of the biggest in Africa. This is hardly divorced from the fact that Nigeria, despite its struggles, still remains Africa’s biggest economy. Also, unlike in other African countries where you would nominally have one big e-commerce player, Nigeria has two giants in Jumia and Konga, both of which are understandably the dominant actors in a segment which also has a few other competitors.

But in focusing on the strengths of the Nigerian e-commerce market which remains very attractive to budding techpreneurs and other young people driven by the lure of wealth and privilege that entrepreneurship holds, it is critical to sound a cautionary note of warning: copying the strategies deployed by current market leaders, Jumia and Konga, may be an exercise in failure.

In breaking down this caution to future entrants into the market, it is essential to begin by, first of all, establishing that the Jumia strategy is a very expensive one, a suicide strategy, so to speak, that is very hard to sustain but one which, if it comes good, would turn its proponents into overnight superstars. Founded in 2012, Jumia initially raised $26 million from Summit Partners in March 2013. At the time Jumia did not specify how it will spend the fresh capital – a subtle indication of an absence of a clear-cut strategy – but back then, Jeremy Hodara — co-CEO of Africa Internet Group (AIG), which owns Jumia — said the funding was a validation of the company’s progress.

“We are very pleased to have been given this show of confidence, which acknowledges Jumia’s success. We consider this a recognition of the huge potential of e-commerce in Africa and the strong momentum of Jumia across the continent,” Hodara had stated back then in 2013.

Flush with cash and with no apparent strategy or clarity on what to spend it on, Jumia had embarked on a massive marketing splurge to outspend and out-hire its competitor, Konga, which had also entered the market in 2012. A year later and now backed by Rocket Internet, Jumia announced it had raised €120 million ($150 million) in new funding. The company confirmed that the round values it at €445 million ($555 million), adding that the new funding would boost its continent-wide expansion. Active in nine African markets — Cameroon, Egypt, Ghana, Ivory Coast, Kenya, Morocco, Nigeria, Uganda, and Tanzania — and also the UK at the time, Jumia’s strategy hardly altered until its rival, Konga pioneered the online marketplace structure that has become so popular today. After initially thumbing their noses at this innovative strategy as something bound to fail, Jumia later followed suit and launched its own marketplace after Konga.

Subsequent fund raises which came from convincing its growing band of investors of the promise of investing in the potential e-commerce goldmine saw Jumia go public in 2019, listing its shares on the floor of the New York Stock Exchange (NYSE). A high point in the company’s history, Jumia would, however, fall from grace after being touted as Africa’s first unicorn. This came after it was discovered to have cooked its books and eventually being called out by a US-based firm, Citroen Research which described its shares as worthless. Also, it is important to cite the huge losses that have trailed Jumia from inception and which many experts see as a black hole it can never fill with the way the business is currently structured.

Till date, the Jumia strategy is one that has seen it refrain from building any form of infrastructure in Nigeria, its biggest market. Investigations reveal the same applies across the other countries in which it operates. Hardly can the company count on owning office spaces, retail stores, warehouses or core logistical or physical presence in Nigeria. For years, Jumia has run on a cash-intensive strategy which has seen it burn through investors’ funds at a fast rate and racking up monumental losses to boot. But while it can claim to have regularly grown Gross Merchandise Volume (GMV) – described as total value of merchandise ordered over a given period of time – it can hardly gloss over the deficits in its books.

From a revenue standpoint, Jumia currently relies on three main areas: first party revenue from direct sales business of inventory owned by the business, revenue from its marketplace (which is currently its highest earner) and other revenue, which currently includes revenue from its logistics-as-a-service activity launched in 2020.

Its recently released 2022 Q1 results show that Jumia is currently valued at about $778m, a figure which falls way short of its all-time valuation of about $5.8 billion achieved in February 2021. Also, its shares are down 32%, despite being recently up by 44%.  And while it claims GMV has risen by 27% per year boosting revenue by 44% year on year – a nine-quarter high – Jumia still reported a total comprehensive loss of $41 million and has a net asset of just $413 million after a massive accumulated loss of $1.7 billion.

Clearly, the biggest gainers were Jumia’s early-stage founders and investors who cashed out in time when other investors came calling. It is clear to global analysts that Africa is a tough continent and Jumia’s strategy may now be to find a buyer, but where it fails, it will be a disaster for investors.

It, therefore, came as a surprise when news recently made the rounds of a potential acquisition of Jumia by the Zinox Group, a technology conglomerate which I understand have acquired years of outstanding experience as a leading light on the continent. Such an acquisition would only make sense if the share price crashes to record lows, justifying such an investment as Jumia, today, is unarguably a loss-making venture that would require intense work to turn it around on the path of profitability. It could also be that Konga and its backers at the Zinox Group wants to use Jumia’s current network to expand to other African countries where Jumia is still recording losses.

But has its rival, Konga, fared any better?

Marginally, yes.

When it entered the Nigerian market in 2012, same year as Jumia did, Konga was also keen on raising money from investors as validation of their standing. The management of the company also burnt through a lot of cash to remain competitive in the face of Jumia’s bullish spending. So, the first few years witnessed both brands going head-to-head and racking up huge losses in the process. To its credit, Konga was a bit more conservative in its spending but that is not to say it recorded much more significant head-way than Jumia at the time.

The company, did, however, do much better in building essential infrastructure. It launched its own internally owned logistics vehicle – Konga Express – to overcome the thorny challenge of last mile deliveries, while also securing a license from the Central Bank of Nigeria (CBN) to float its own mobile money wallet known today as KongaPay. This is in addition to pioneering the marketplace structure known back then as the Konga Mall – a first in the African e-commerce market and beyond and which was later replicated by other local and international players. Konga also stood out for its investment in warehousing structures which helped it retain huge inventory.

Successive fund raises from perennial investors Swedish-based AB-Kinnevik and South African-headquartered Naspers, however, failed to save the company from almost running aground before its current owners, the Zinox Group, stepped in.

In assessing where both latter-day e-commerce pioneers went wrong in their strategies, it is easy to cite the absence of a core understanding of the local dynamics, an almost foolhardy ignorance of the complex interplay that defines the Nigerian market. Although I am not a Nigerian, I have spent enough years in the country to be able to identify the Nigerian market as a tricky customer. You need foresight, guts, experience borne out of years of navigating policy somersaults, keen awareness of the infrastructural deficiencies and influence of state actors, as well as other peculiarities that shape this market in order to make a success of e-commerce in Nigeria.

I think the Zinox Group’s experience of the Nigerian market and Konga’s strategies in investing in sustainable assets in Africa like warehouses, delivery trucks and more, instead of pouring all her money into marketing shows a commendable understanding of this tough market. It also shows that the new owners of Konga want to be in business for a long time and this could be why they have not yet hit the market to raise money.

Perhaps, that is why it hardly came as a surprise when Konga, which was almost comatose and on the verge of exiting the market at its point of acquisition, is today and under new ownership, the first e-commerce firm to achieve profitability in Africa.

The lesson for aspiring entrepreneurs in Africa here is simple.

Copying the strategies that made Jumia and Konga popular may seem like an easy deal but it may not be sustainable in the long run. Hype is good and necessary. However, it is very important to thoroughly understand your market, while situating your strategies within the context or existential realities of the society and not just relying on importing foreign concepts or business school models. In the same vein, you must put in the hard work to fill the content or deficiency gaps, while also making efforts to own your own infrastructure, especially considering the country’s challenges in this area.


Prof. Evans Stevenson, a Kenyan-born e-commerce researcher, writes from Abuja.




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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd


TAFTA’s TALP-X Paves Way for Young Creatives



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Terra Academy for the Arts (TAFTA), Nigeria’s leading creative education academy, last Sunday showcased its transformative impact on young talents across the country.

Founded with a mission to educate and upskill young Nigerians in various creative industries, including animation, art business & entrepreneurship, scriptwriting, sound design, and stage lighting, TAFTA has become a beacon of empowerment.

Since its inception in 2022, TAFTA has empowered over 24,440 young Nigerians across Lagos, Kano, and Ogun states with invaluable theatre arts and entrepreneurship skills. Notably, TAFTA has successfully integrated 9,165 youths into the workforce, with 5,156 young women securing employment or gigs in their respective fields.

Under its flagship initiative, the TAFTA Action Learning Project (TALP-X), TAFTA, in partnership with the Mastercard Foundation and Utica Capital, hosted an unforgettable evening at Terra Arena in Victoria Island, Lagos.

Featuring five spectacular stage plays, the event not only entertained but also highlighted the depth of talent nurtured through TAFTA’s programs, creating an experience that truly made the attendees say, ‘We Outside.'”

The evening kicked off with a soul-stirring performance by Wisdom Joe, whose renditions of classics such as “Coat of Many Colors” and “Mr. Jailer” set the stage alight.

This was followed by powerful spoken word pieces by Adeoye Adelakun, who gave a poignant eulogy of Yorubaland, creating an electric atmosphere from the start.

The stage then came alive with the captivating storytelling of the first play, titled “Nocturnal.”

The audience was transported into a riveting tale of a dysfunctional couple who, despite their differences, successfully resist outside intervention and pressures.

Following the thunderous applause, the students of the academy presented a thought-provoking contemporary drama, “Hues,” exploring women’s empowerment through collaboration. As the night progressed, the energy in the room only intensified.

The audience roared with laughter during “Kolo,” a thought-provoking social commentary on sanity. This hilarious play offered a satirical look at two madmen who, realizing that madness is more affordable, ultimately choosing to embrace insanity.

The heartfelt performance “Maami,” a touching comedic portrayal of familial bonds during a wedding fundraiser, added layers of depth and emotion. The night culminated in “Hello,” a gripping dialogue between God and Lucifer inspired by Adele’s classic song, leaving the audience mesmerized and inspired.

The highlight of the night was the overwhelming support and enthusiasm of the attendees, who filled the venue with cheers and applause throughout the performances. Their energy elevated the atmosphere to new heights.

If you missed this unforgettable event, do not worry. There is more to come!!! TALP (TAFTA Action Learning Project) X is a stage play event held every quarter.

Follow @Tafta_academy on social media to stay in the loop about upcoming performances. This is your chance to be part of a transformative cultural experience that celebrates creativity and empowers the next generation of Nigerian artists and entrepreneurs.

Also, if you are a Nigerian youth with a passion for the arts, a new cohort is starting August 8th, 2024. Visit the TAFTA website to stay updated on the call for entry and other news. This is a once-in-a-lifetime opportunity to learn from the best and brightest in the industry and to develop your talents to their fullest potential.

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NIGCOMSAT, BON Partner to Enhance Broadcasting Services



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NIGCOMSAT Limited, Nigeria’s satellite communication infrastructure provider, says it has begun a collaborative partnership with the Broadcasting Organisation of Nigeria (BON) to provide uplink services.

NIGCOMSAT, BON Partner to Enhance Broadcasting Services

This was disclosed in a statement issued by Aisha Bantam, spokesperson, NIGCOMSAT Limited,  on Wednesday. The company said this strategic alliance aims to improve the quality and reach of broadcasting services for BON members across the country for a period of three months.

According to Bantam, the development which aligns with the mandate of the Federal Ministry of Communications, Innovation and Digital Economy under the supervision of the Minister, Dr. Bosun Tijani, will see NIGCOMSAT leverage its state-of-the-art satellite technology to empower BON and its member organisations.

“This partnership will enable BON to seamlessly access NIGCOMSAT’s reliable and high-performance uplink services, ensuring their broadcast signals are delivered with unparalleled quality and consistency to viewers nationwide,” Bantam said.

Mrs. Jane Egerton-Idehen, managing director/chief executive officer, NIGCOMSAT Ltd, said the company is committed to driving digital transformation and enhancing connectivity across Nigeria.

She said: “By collaborating with the Broadcasting Organisation of Nigeria, considering the strong influence it has in the media space and its contributions to the development of the society, we have the opportunity to elevate the country’s broadcasting landscape and bring the benefits of satellite technology to millions of Nigerians who rely on these vital services”, she added.

“The collaboration will commence immediately with NIGCOMSAT’s technical team working closely with BON to integrate their systems and ensure a seamless transition. This partnership underscores NIGCOMSAT’s dedication to supporting the growth and development of Nigeria’s media and communications sectors, ultimately empowering citizens with access to reliable and informative content,” the stated noted.


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Big Brother Naija Returns for 9th Season with a New Twist



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Nigeria’s popular reality TV show, Big Brother Naija (BBNaija) is set to return for its ninth season on Sunday, July 28, 2024. The show still maintains its cash prize of N100 million and a brand-new SUV, among other prizes.

This season however will mark the first-time contestants will be entering the game as pairs, setting the stage for unprecedented alliances and thrilling competition.

The show’s organiser, MultiChoice Nigeria, revealed that this season will uphold the high standards of entertainment and drama that have come to be expected from the reality show series. Contestants from all over Nigeria with diverse backgrounds will compete for the grand prize over a total of 71 days.

“We are delighted to introduce a brand-new season of Big Brother Naija. The excitement on social media and the curiosity about this ninth season have been incredible,” said the Executive Head, Content and Channels, West Africa at MultiChoice, Dr Busola Tejumola.

“The theme for this season will be announced at the premiere as housemates enter the house in pairs. This innovative format promises to deliver fresh dynamics and unforgettable entertainment.”

Tejumola announced that the Showmax exclusive recap show, ‘The Buzz,’ featuring on-air personality Toke Makinwa, will return for this season. The show plays a complementary role in highlighting BBN’s high points and bringing more perspectives to viewers.

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