Africa’s e-shopping sector is busy being born – Cote d’Ivoire and Cameroon stake a claim

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With hindsight, the growth of e-shopping in South Africa and Nigeria was perhaps inevitable. But the more interesting story is how internationally backed start-ups like Jumia are beginning to make inroads into countries that have much smaller markets. Russell Southwood spoke to a couple of key players in Cote d’Ivoire and Cameroon.

In October last year I wrote about the scale of e-commerce in Nigeria, looking at two internationally backed start-ups, Jumia and Konga. The story that follows looks at Jumia in Cote d’Ivoire and touches on Kaymu in Cameroon, both backed by Rocket.

So why keep the focus on Rocket start-ups? They have been criticized (notably by Jason Njoku, wearing his Spark incubator hat) for not being locally born and having expat leadership.

But for me, the interesting thing about Rocket is precisely that it is internationally-backed and has taken the risky but interesting step of rolling out into 12 countries (Nigeria, Cote d’Ivoire, Egypt, Algeria, Cameroon, Morocco, Kenya, Ghana, Uganda, Tanzania and Angola), the latest being Senegal.

The striking ones on this list are Cote d’Ivoire, Cameroon and Senegal precisely because they are not large markets and would not feature on any A-list of countries to invest in. In other words, Rocket has reached the end of the “must-do” list and is now venturing out into tougher territory.

So it was interesting to talk to Francis Dufay, the new Managing Director of Jumia Cote d’Ivoire. Started in June 2013, Jumia Cote d’Ivoire is now the grand old age of three years old. Although cagey with stats, Dufay says that they are now way past the 1,000 orders a day mark. It has three small delivery hubs outside the capital Abidjan and can deliver anywhere in the country. To get something to a town close to its northern border will take 5 days.

As most of the orders originate in Abidjan, it’s interesting that it has achieved this against a backdrop of what Dufay describes as “almost too much (bricks and mortar) retail. There are malls everywhere in the fashionable areas. But other areas lack this offer. The malls themselves have international retail chains and these are very expensive for the average citizen. The traffic is terrible. So it’s convenient to buy from Jumia and to have it delivered at home, especially if it’s the same price or lower.” He also makes the point that whilst outside Abidjan there are good grocery chains, there are not other comparable retail offers.

The system works the same as in Nigeria: a customer orders online and pays cash at the door:”Cote d’Ivoire was a centre for cyber-crime so there’s a trust issue but we would like to do credit cards soon.”

Most of the orders come from PCs during office hours with a relatively small amount of ordering from mobiles. But Dufay sees mobiles as: “the next big thing. Fixed line internet is pretty bad so we have to push for mobile. The increase in smartphones will help. Anyone who can afford one, has one now and is on What’s App.” It now has three apps - Android, iOS and Windows – and will do pre-loaded apps with the mobile companies.

The top three items sold are: fashion, phones and electronics in general:”The Ivorian population is very curious and eager to discover new things. We want to sell whatever sells online. There are still gaps that we are not reaching. We’re selling more furniture and we want to grow existing categories.”

The main competitor is also international. Cdiscount is owned by the French retail and supermarket chain Casino and is one of the biggest e-commerce players in France and it has rolled out in several francophone West African countries:”It has a quite different business model. All stock is in France and it takes 30-45 days to be delivered. There have also been other competitors but they went bankrupt so they have not provided strong enough competition.”

He identifies three key barriers to the further growth of e-shopping: the trust factor, logistics and the means of payment. He reckons that because of its advertising campaigns there are few people who don’t know of the site’s existence. Also the 400,000 visitors to the website are probably close to most of the potential customers in the country.

So the next step is people trusting that they will get what they order and get it in the time promised and be able to pay in a way that they feel is secure:”The market is small and we cannot waste a single customer. Happy customers create more customers so we have to focus on customer satisfaction.”

The company is also working hard to create a logistics ecosystem. There are currently few companies that will deliver anywhere in the country. This is the probably one of most significant but boring sounding things that e-shopping is driving: the ability to deliver retail stuff and by extension anything else that needs to be moved in this way.

The last barrier factor is payment. There are few credit cards in the country and the distrust generated by the country once harboring cyber-criminals remains high:”We work well with MTN because they are a shareholder. Customers can pay with MTN Money and we have a special deal with them. They need to make it work.”

So what will Jumia look like in 5 years time?:”Everything will be very different. The scale will be 20-30 times bigger. There will be more people but it will be a leaner company. We’re rely much more on a vendors network and we’ll be smarter in the way we do e-commerce.”

Dufay also emphasizes the positives of being in Cote d’Ivoire:”There’s a relatively favourable business environment and relatively good regulation. We have good people at reasonable prices and have had a good experience with young local graduates. The infrastructure is OK. There’s electricity 99% of the day and the roads are getting much better.”

Candace Nkoth Bisseck is Country Manager Cameroon, Kaymu, another Rocket start-up, this time an online buyers and sellers market. Its website has 100,000 visits a month and there are 4,000 sellers. These are in three main categories: individuals doing “side business” to boost their income; sellers at popular local markets; and a selection of large companies.

The two biggest barriers to business?:”People not being able to use the Internet. Lack of tools. Lack of knowledge and not having an Internet connection.” She also touches on the trust – skepticism and the fear of being scammed.

These two countries have broadly similar population sizes but very different business environments. It will be interesting to see what impact this has on the success of online businesses. Things like the price of the Internet, the supply of electricity and a reasonable business and regulatory environment are not simply the endlessly repeated homilies of African conference speakers at this point. They may well be the difference between life and death for the growth of e-commerce in Africa’s smaller markets.

Background Briefing on the Birth of eCommerce in Africa

Francis Dufay on breaking down the mistrust barrier to make a success of Jumia in Cote d'Ivoire

Candace Nkoth Bisseck on how Kaymu is connecting buyers and sellers online in Cameroon

Rukky Ladoja, Grey on running a fashion start-up in Nigeria and selling through Jumia

Jeremy Doutte on Jumia Nigeria as the largest retailer in Nigeria and its top selling items

Andy Higgins, uAfrica on creating an e-commerce platform for SMEs in South Africa and Nigeria

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The Birth of Africa’s Francophone Start-Up Ecosystem – The realities of different cultural heritages
3D Printing in Africa – A Slow Burn Movement with huge potential that has yet to find its growth path
Separating Hype from Reality in the Fizzy World of Africa Start-Ups – VC4Africa survey findings
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Francis Dufay on breaking down the mistrust barrier to make a success of Jumia in Cote d'Ivoire
Mohamed Diaby on hackathons, start up seed funds and online potential in Cote d'Ivoire
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