By Deji Aroloye
ALTHOUGH the level of e-commerce penetration in the country may be low, Nigeria no doubt is on the path of growth.
According to Kushal Dutta, the Country Manager of Jumia Travel, it is just a matter of time before the internet penetration in Nigeria translates to e-commerce penetration.
He added: “ Nigeria is on the right path and it is only growth and growth. It is one of the leading countries on internet penetration. This is a phase for Nigerians where they are getting exposed to the internet. It is just a matter of time before the internet penetration will translate to e-commerce penetration.”
In this interview, he sheds more light on the operations of the company in Nigeria and other issues.
Vision
In Jumia, we have only one dream and that is to make life easier for all Africans by bringing simplicity and trust in what we do. To transfer them from offline mode to online mode of life because we believe that internet can change life. And this is what we need to bring so that we can offer affordable solutions and make life better through the internet for all Africans.
Jumia in Nigeria
We have successfully built a huge brand. If you talk about Jumia, everyone knows what it is. In Nigeria, we are also among the top two websites. We cover 75 per cent of the population that has internet connection in Africa in a very big way. But there is a long way to go. Our goal is to have 100 per cent and we want them to think about Jumia in everything they do. Be it travels, purchasing things online, when you are hungry, when you are happy or when you are searching for jobs. Jumia is going to be an integral part of Africa and that is our dream.
Restructuring
To be honest, I will not call it restructuring. I will just say it is rebranding, which means there is nothing that has changed internally. We have only been part of one big Jumia family. It is time that all of us also have the same family name as Jumia. Nothing has changed, only the name because it makes sense for us.
Operationally and internally, each company remains the way it is. But, of course, it is a big thing for us because we say Jumia is now one umbrella under which we have our different services. The only thing that has changed is the name of the company to create a feeling of being one family. You can imagine that we have nine different brands that we have built for the last three to four years. Our vision is to conquer and enter Africa and make Africans the winners through internet to improve their lives. It is one strategy to build, at a time, nine different companies. And on the other hand, you have that advantage of building one company and all of them comes below. You will agree with me that building one brand is much easier than building nine different brands equally.
E-Commerce
In Africa, we cannot replicate the same model which developed countries like the United States or Europe does today. We are going to do fewer on the line because that is not where the growth is. For example, if you look at only the hotel booking space, if you go the West, 90 per cent of the bookings are done online. But for Africa, the percentage is very low and it is even less than 10 per cent. You can imagine if I have to keep the same trajectory, we have a huge growth path to follow. It is obvious and it has to come through internet That is exactly what we are doing here. In Nigeria, it is even more relevant; just imagine if you have to go and buy something, maybe some food, you come back from work at 9’o clock. Then the traffic you need to go through, the money you have to burn in terms of fuel, Is it not easier for you to order something through your phone and somebody comes to deliver it in 20 minutes? I think it is more relevant in Nigeria and any other African countries.
Infrastructure
When you complain about the infrastructure, I will not say it is a problem. There are challenges in every country you do business. Here, infrastructure has a lot of scope to improve. But at the same time, there is also a challenge in terms of internet cost because e-commerce is based on the internet. But again, I see good prospects here with multiple players coming in. A year back, you probably had only MTN and one more. You must also have seen in the market that cost of smartphone are reducing. More people are now buying those devices more which are ordered to be shipped on e-commerce domain. We will also have cheaper data plan. But we expect it to be a little cheaper so that every African has one device that they can access internet with and at a cheaper cost.
Government can immensely contribute in terms of improving infrastructure as a whole and creating favourable rules for the taxes and make businesses in this country much easier for investors to come in and invest on infrastructure in the power and telecoms sectors as well. Government has a very strong role to play.
Next big idea
Ideas could be in many ways. When we say travel, we will love to provide our customers an experience which covers different aspects of traveling. We want to make available the hotel at the best cost. And we will love to have some more scope to explore this opportunity, how we can add more value like we already have the biggest inventory in Africa.
Nigerian hotels
In Nigeria, we work with average of 9,000 hotels and we have 8,000 plus already with us. In terms of inventory, we have the biggest inventory that is possible. You cannot find any other organization which has bigger inventory.
This is not related to Jumia travels, it is related more to the hospitality industry. How do foreign travellers benchmark Lagos hotels for the same price they pay somewhere else? There is a huge difference. The cost of living in Nigeria, especially in Lagos, is one of the highest (in the world). The value for money here is not so great, there are costlier hotels here. The quality of the four star hotel in Lagos will be different from that of US and the price you pay. That is the way the market it is. That is even more the reason it is more beneficial and profitable for companies like us.
Economic challenges
I used to say this that Nigeria market is immune some way to the problems. if you can call it a problem at all. Why? Nigeria is more known for the business travel and less known for the leisure travel. When the economy goes bad, the first thing people cut is their domestic travel. Because it is more known for business travel, that is why you see people coming in, no matter bad it is, unless the country is completely stuck which is not the case. The travel industry, I will say is a lot more immune to the market thing. But at the same time, yes in the shorter time. We do not expect to see any big growth coming in. But we are very positive that in the medium and long term, Nigerian market has only the scope of growth and nothing else. I think it is about getting used to the new norm of the price of the oil of 50 dollars per barrel.
Strategy to surmount challenges
When you are talking about the currency as a problem with the recent devaluation of the Naira. Just imagine, it encourages business travellers or anyone coming from outside Nigeria to come here more because you get more value of the one dollar you are spending here. For them, the space is not expensive. It is not cheaper than what it used to be before. So that doesn’t go against us ,that goes in favour of people who travel to Nigeria to get better value for money. Number two, you are not looking at one whole segment here. Nigerians love to travel and when you love to travel,you can put the money into dollar and that is a loss-making proposition for you. All those people during the summer season who are thinking to travel abroad now looking for spending the money within the country. They look for beautiful locations where they can spend the money. So that has opened a new section of the customers for us. If you focus on ways not to do business here, there are reasons not to do business. But for us, we are are growing with it. But of course, with better economy, we can even grow more than we are growing right now. It is not a stumbling block for us.
Nigeria’s future with e-commerce
Amazing. All the data are saying the same thing. Nigeria is one of the countries with the highest number of people using the internet. It is one of the highest countries among the internet penetration. This is a phase for Nigeria where they are getting exposed to the internet. It is just a matter of time before the internet penetration will translate to e-commerce penetration. You know using a technology does not necessarily mean the acceptance of the technology. Nigeria is on the right path and it is only growth and growth.
Connecting with youths
I think you will get the answer if you take a walk on the floor here. The average age of the people working here is less than 30 years, maybe between 25-35. We are actually capturing the cream of the youth segment. Why is it so? we are in the e- commerce sector and this sector is not as old as the manufacturing and the oil and gas. We are open to the talents and the skills we feel we need to do well. You will agree with me that Nigeria is full of such talents.