{"id":562073,"date":"2021-05-05T03:44:47","date_gmt":"2021-05-05T03:44:47","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/whats-jumia-up-to-in-egypt\/"},"modified":"2021-05-05T03:44:47","modified_gmt":"2021-05-05T03:44:47","slug":"whats-jumia-up-to-in-egypt","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/whats-jumia-up-to-in-egypt\/","title":{"rendered":"What\u2019s Jumia up to in Egypt?"},"content":{"rendered":"

<\/a> What\u2019s Jumia up to in Egypt?<\/strong> Pan-African e-commerce giant Jumia<\/a> had a good 2020. The company saw<\/a> 3Q2020 operating losses reduced by 49% y-o-y, and its stock price up more than 500%. In Egypt, it\u2019s launching<\/a> its food delivery business Jumia Food<\/a>, and recently announced<\/a> it\u2019s making its integrated logistics services available to third-party businesses.<\/p>\n

We sat down (virtually) with <\/strong>Thomas Maudet<\/strong>, managing director of Jumia Services Egypt <\/strong>(LinkedIn<\/a>), to discuss how Jumia\u2019s physical and tech infrastructure are helping it expand its operations and launch new services, including its new third-party service. We also look at what\u2019s spurring e-commerce growth.<\/p>\n

Maudet also discussed the company\u2019s immediate priorities in Egypt<\/strong>, including achieving double digit growth at Jumia Food within the year, increasing last-mile delivery stations by 40% and increasing its warehouses in the Delta and Upper Egypt. Jumia is also considering an entry into pharma delivery<\/strong>, as a third step after expanding Jumia Food and adding supermarket delivery to its range of services. Edited excerpts from our conversation:<\/p>\n

Jumia\u2019s infrastructure in Egypt:<\/strong> Jumia has roughly 70 last-mile hubs, 140 pickup stations, and 15 drop-off stations in Egypt. It has 12 warehouses: Three larger ones that will eventually be merged to centralize operations, and nine smaller ones for fast-moving items that can be rapidly dispatched for same-day delivery. Around 70% of its business is concentrated in Cairo and Giza, 10-15% in Alexandria, 10% in the Delta, and the rest in Upper Egypt, on the Red Sea and the North Coast.<\/p>\n

Jumia is targeting 90% next-day delivery service of items in the next year,<\/strong> up from its current rate of roughly 85%<\/strong>, by building its number of warehouses and delivery capacity in the Delta. It has a freight of 1-1.5k drivers leaving the last-mile hubs. It processed several mn packages in Egypt in 2020, seeing roughly 20-25% y-o-y growth in the number of packages it processes and delivers, says Maudet.<\/p>\n

Jumia\u2019s current activities range from logistical to financial services. <\/strong>Jumia\u2019s New Cairo sorting center can usually sort 50k+ packages per day. It has two delivery models: Direct delivery to customers; package delivery to one of 140 pickup stations \u2015 a Total gas station or Orange store, for example \u2015 for customer collection. Jumia\u2019s financial services include prepayments, wallets, and installments.<\/p>\n

Robots still only account for a fraction of the workforce<\/strong>, with 80-90% of Jumia\u2019s operations being carried out by humans. Future investment in equipment like automatized conveyors is possible, says Maudet. Still, the bulk of Jumia\u2019s automation investment is in things like automated warehouse picking<\/a>, where AI is used to calculate the fastest routes for human warehouse workers to follow when they collect items, then displayed on the mobile devices<\/a> they carry. \u201cSomeone working in a warehouse could walk 2-3 km per day retrieving items. We want to calculate the fastest path for them, to make their time in the warehouse aisles most efficient,\u201d he says.<\/p>\n

E-commerce boomed in 2020 due to the pandemic: <\/strong>E-business was growing pre-covid, but the pandemic accelerated it, says Maudet. Jumia itself is seeing 30% y-o-y growth overall, he notes. Not even traffic congestion or IT instability impeded operations during the covid e-commerce boom, says Maudet. \u201cCongestion usually operates in our favor. Clients prefer ordering from an e-commerce company to braving the traffic.\u201d Occasional network coverage disruptions don\u2019t really impact operations, he adds.<\/p>\n

Growth is driving Jumia\u2019s new service for third-party businesses:<\/strong> As sales in stores greatly decreased during the covid curfew period, many sellers launched their own websites, or started selling through generic platforms like Shopify<\/a>. By providing services to third-party businesses, Jumia can profit from their shift online, rather than competing. \u201cWe see no need to compete with other platforms except direct competitors, like other e-commerce platforms. We don\u2019t consider the brands we sell on Jumia to be competitors, even if they open their own websites.\u201d<\/p>\n

These businesses have access to Jumia\u2019s fast infrastructure:<\/strong> Clients have Jumia warehouse space and a logistics team taking care of their inventory, comprising:<\/p>\n