COVID-19 and e-commerce in Africa: The great shift to everyday products
Africa’s leading e-commerce platform, Jumia, has published its first Africa e-commerce report, Jumia Africa e-Commerce Index 2021, which leveraged data from the Jumia platform to illustrate the importance of shopping online in a pandemic context as consumers leverage Jumia for their needs using their smartphones. This shift is part of a broader economic transformation led by the continent’s young, urban and tech-savvy population. The report was a partnership with UNCTAD, IFC, and Mastercard, highlighting the impact of e-commerce on the African economy.
While the COVID-19 pandemic led to meaningful supply and logistics disruption, it supported demand for everyday product categories, fast-moving consumer goods and personal care categories in particular, which experienced strong growth on the Jumia platform at the onset of the pandemic. The effects of the pandemic, combined with dedicated commercial and marketing efforts on the Jumia side, led to a shift in our product category mix with everyday product categories including Fashion, Beauty and FMCG categories accounting for c. 57% of GMV in 2020, up from 44% in 2019.
“This index underscores how instrumental Jumia has become to the consumers in the countries we serve,” said Sacha Poignonnec, Jumia co-Founder and co-CEO. “It is an important move for the industry as e-commerce brings daily solutions, convenience, and competitive prices to consumers.”
E-commerce played an important role during the pandemic by providing solutions for both businesses and the communities they serve. Jumia’s partnerships with various brands and organizations have enabled SMEs to connect with millions of consumers online; The United Nations Development Programme (UNDP) in Uganda supports market sellers through Jumia Food. Local artisans in Morocco also sell online thanks to the partnership with the Moroccan Ministry of Tourism and Handicraft. SMEs in Egypt are able to sell online in partnership with Alex Bank and Sawiris Foundation, and farmers in Cote d’Ivoire are able to reach more consumers through Jumia.
‘’We see a strong adoption of e-commerce and specifically Jumia in Uganda and across Africa and the customers who have shopped online stay because of the quality of service, price and convenience we offer. In the last 2 years, the Jumia service was even more critical to enable sellers to keep their shops open and customers safe in their homes while getting the goods and services they need delivered at home.”, said Ron Kawamara, CEO Jumia Uganda.
According to the United Nations Conference on Trade and Development (UNCTAD), internet businesses in Africa, including e-commerce which sits at the heart of the digital economy, could add US $180 billion to the continent’s GDP by 2025. “COVID-19 led to a surge in the use of digital solutions, including e-commerce. This was particularly demonstrated with domestic sales rather than cross-border e-commerce. Food delivery, essentials, and pharmaceutical goods were among the top-performing online shopping categories,” said Torbjorn Fredriksson, Chief of the ICT Policy, UNCTAD.
COVID-19 has accelerated the pace of innovation towards improving financial inclusion, especially the need for cashless payments. “Consumers are increasingly shifting their spending habits to embrace contactless tap-and-go payments, online shopping, and are exploring the potential of new ways to pay.” said Ngozi Megwa, Senior Vice President Digital Partnerships, Middle-East and Africa, Mastercard. “The adoption of new payment technologies is rising, and consumer appetite for new, fast and flexible digital experiences continues to grow.”
Jumia has seen increased utilisation of digital payments on its platform. More consumers turned to JumiaPay for the first time during the pandemic, mainly for safety reasons and for the enhanced services on the app like bill payments.