JUMIA: Africa\'s ALIBABA On safari for the rare African tech unicorn e, Goldman
ID: 1152825 • Letter: J
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JUMIA: Africa's ALIBABA On safari for the rare African tech unicorn e, Goldman Sachs and other big-name investors think they have spotted a winner in Jumia, Africa's aspiring Alibaba. Launched in 2012 in Nigeria, with the backing of German startup fund Rocket Internet e, Jumia is Africa's biggest e-commerce platform, selling goods and services to a network of 70,000 vendors in 14 African countries and million from investors, including global telecom operators and was valued at $1.2 billion-qualifying as a so-call unicorn startup-during its last fundraising round in 2016. millions of consumers. It has raised more than $700 me the continent's equivalent of China's Alibaba. Jumia and its merchants face many challenges unique to retailing in Africa. They include customer hesitations about buying products online, poor internet online nnectivit y, and tight bank lending to vendors and consumers. co To overcome these challenges, Jumia offers credit ines, it provides training workshops on basic accounting and stock-keeping, it conducts marketing campaigns eaturing the continent's top pop stars, and it runs Black Friday events promotion where buyers could win a live goat. DISCUSSION QUESTIONS: 1. Discuss e-commerce market opportunities in Africa. 2.) What are the biggest challenges and obstacles that hinder the growth of e-commerce in Africa? How and to what extent is Jumia trying to overcome challenges for growth? 3. Far from being profitable, Jumia needs further investment to grow. What would be your advice to Jumia's current / future investors? Would you invest in Jumia if you were in a position to do so? SOURCE Meet the Startup Building a Market From Scratch to Become Africa's Alibaba e By Matina Stevis-Gridneff May 23, 2018Explanation / Answer
1. E-commerce has got very good market opportunities in Africa. Most of the African countries are highly developed in terms of internet connectivity and people are very much tech savvy to adopt e-commerce business opportunity. All of the 54 African countries are connected to the Internet. There are approximately 1000000 Internet dial up subscribers in Africa making it a tech savvy country.Internet is more popular in urban areas than in rural areas.
The benefits in African market for e-commerce opportunities are :
2. Few barriers are there for e-commerce opportunity in Africa :
Researchers have observed that the major reason behind the low internet usage in Africa is not the poverty but high internet pricing.Jamia has got tie-ups with various Internet companies like Vodacom's HSDPA based internet cafe initiatives and WiMax have come up with availablity of Internet at reasonable prices, thus making Internet popular in Africa.
3. Investment in growth of Internet in Africa is very profitable as people are much inclined towards internet usage. If I were in a position to do so, I would definitely invest in Jumia as Internet is future market in Africa and there is very high prospects of Internet growth in Africa if the internet connectivity is available at a reasonable prices.
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