Jumia reports $50.5m revenue in Q3 2022
Jumia logo on NYSE


Nigeria’s e-commerce giant, Konga, is steadily edging old rival, Jumia, in the race to control the nation’s retail and e-commerce market, Business Hallmark findings can reveal.
It would be recalled that both Jumia, founded by two ex-McKinsey consultants, Jeremy Hodara and Sacha Poignonnec, alongside Tunde Kehinde and Raphael Kofi Afaedor and Konga, owned by Zinox Group, a Nigerian firm that manufactures and distributes computers, were both established in 2012.

However, while Jumia immediately kicked off to a blistering start, Konga struggled to compete and for several years continued to play catch.
According to available data, Jumia alone was controlling over 50% of the Nigerian e-commerce market as at 2017, housing over 50,000 international and national brands. The firm’s currently has over 15 million monthly visitors and over 4 million subscribers.

Konga followed in second place with around 25% market share and a little below half of Jumia’s current revenue. According to Statista.com, Konga recorded 30 million visitors on its site in 2019, average of 2.5million per month. While the rest of the market is shared among other e-commerce firms like as PayPorte, VConnect, Kara, Printivo, Store, Jiji, OLX, Shopify, among several others.

However, the table, BH findings suggest, has turned, with Konga now the fastest growing firm in the sector.

While Jumia is unarguably still the market leader, current growth patterns indicate that Konga is destined to overthrow the firm in the not too distant future if the current trend continues.

Konga’s change of fortune and dramatic rise, checks revealed, started in 2018 when the company was acquired by new owners, Zinox Group, from former owner, Sim Shagaya, who started with just 20 staff.

With the injection of more funds and huge expansion drive, as well as managerial acumen of the firm’s new management, Konga has witnessed a huge transformation which has repositioned it as one of the most viable ventures not just in Nigeria, but globally.
For instance, Konga has become Africa’s fastest growing e-commerce brand within the space of three years. The firm has achieved growth of almost 1,000%.

It was able to achieve this feat because of its Pay on Delivery (POD) option, which gives skeptical buyers the option of paying for ordered goods on delivery. Unlike Jumia and other e-commerce firms that have restricted the option to few neighbourhoods due to constant robbery incidents and attacks on their agents.
Aside the option of paying on delivery, shoppers who visit any of Konga’s stores have the opportunity to order for items not available on shelves and have them delivered to them at home.

These two business models is helping the firm to attract more traffic.

Another factor that is pushing the massive defection of shoppers from other firms, particularly Jumia, to Konga, is the issue of trust the company has built among many Nigerians.

The company has a policy of slamming huge sanctions on merchants/vendors who supply substandard products through its platform.
While first offenders are fined and made to replace defective products at zero cost to customers, repeat offenders are blacklisted and permanently removed from the platform.
The siting of stores in streets and neighbourhoods which brings shops directly to customers has helped Konga to attract doubtful buyers who are skeptical of online trading and would prefer to visit physical shops to purchase what they need.

Unlike when they buy online and would need to interact with faceless consumer service agents, shoppers have the opportunity to go back to the physical stores to either return defective goods or lodge complaints.

On the other hand, apart from recording high cases of products return, Jumia is also weighed down by integrity issue, especially the allegation of falsifying figures in order to hoodwink investors when the firm’s shares were offered to the public through an Initial Public Offer (IPO).

Many shoppers who responded to BH survey lampooned Jumia for not doing enough to stop the rising cases of vendors selling poor products on its platform.

“I have bought several products through Jumia and most of them are either not what I ordered, or ended up malfunctioning within a short period after delivery.

“Despite series of complaints, the company, apart from replacing the defective products, rarely call the offending supplier/vendor to order as the same complaint keep repeating itself.

“I once bought a defective clipper through Jumia. After I complained it was replaced. The replacement barely lasted for four months.
“I was angry but this didn’t stop me from still patronising the firm until I experienced another bitter experience.

“What happened was that I purchased an electric kettle from Jumia. Though the kettle was delivered, it soon developed a fault. In the process of lodging a complaint, I discovered that it was the same company that supplied the hair clipper that also supplied the kettle.
“I was furious as to why Jumia will allow the same blunder repeat itself. It is not that the product just has a factory daily, but it fell below standard.

“Despite them (Jumia) changing it for me, I totally stopped buying from them by moving to Konga. Though Konga is also not immuned to bad products, the rate is very low. And I do learned that they always reprimand defaulting vendors by blacklisting them from trading on their site”, said Tobi Olorunleke, a trader based in Lagos.

In the area of profitability, Jumia, unlike Konga, has continued to record slower growth and its management unable to shift the business from its current status as a loss-making venture.
In Q1 2021, the firm posted revenues of €27.4 million, a 6% drop from the €29.3 million it reported in Q1 2020. Also, its operating loss for Q1 2021 came to €33.7 million.

On the other hand, Konga, under its new owners, has cut losses drastically, from an initial $49m in its first year after acquisition in 2019 to almost zero.

Speaking with BH in 2020, the Konga’s Co-Chief Executive Officer (CEO), Nick Imudia, had disclosed that the financial result of the e-commerce company indicated that it was edging closer to becoming the most profitable e-commerce business in Africa.

“We understand this market more than any competitor and have been investing creatively nationwide to resolve issues like warehousing, delivery logistics and payment headaches including working with Microsoft in the past five months to deploy the most robust technology platform that will manage our aggressive expansion.

“There is no reason why Konga cannot emerge as the first profitable e-Commerce company in Africa. We are determined to set this record in the e-Commerce world.

“Over the past 18 months since the business was acquired by the Zinox Group, there has been a huge transformation which has repositioned Konga as one of the most viable ventures not just in Africa but globally, as justified by our elevated rating by Early Metrics”, Imudia had stated.

Reliably sources in the firm confirmed to our correspondent that the firm will declare profit at the end of 2021, a feat never before recorded before by any player in the industry, including mogul Jumia.

Konga’s rise to dominance, BH gathered, is also being driven by its payment wallet, KongaPay. While both firms have their own standard wallets, Konga’s KongaPay, a Central Bank of Nigeria-licensed mobile wallet, is undoubtedly the leader.

The mobile wallet was recently identified by a global market and consumer research data firm, Statista, as the leading provider of digital payment services for e-commerce transactions in Nigeria.

The consumer research data firm in its report said that e-wallet accounts for about 10 percent of digital payments in Nigeria, with KongaPay being the most commonly used, four percent of the payments, followed by PayPal with three percent.

The payment platform has recorded significant growth in recent months, recording an impressive 800% growth in number of existing wallets.

It is projected to grow to over 1.1 million wallet holders by the end of 2021 and gross over four million by 2023.

Like Jumia, which has several subsidiaries like Jumia Express, Jumia Food, JumiaPay, and Jumia Travel in its flagship, Konga also has KongaPay, Konga Travel, KongaExpress (Kxpress) and Konga Health within its fold.

However, the subsidiaries have been transformed into more efficient and revenue-earning enterprises, with all contributing to Konga’s steady path to profitability.

As both companies squabble, Jumia’s grip on the nation’s e-commerce has continued to wane, as Konga’s huge expansion drive across major Nigerian towns and cities is helping it to attract more customers and boost sales.

News continues after this Advertisement


Please enter your comment!
Please enter your name here