Jumia Technologies AG has unveiled preliminary figures showcasing robust growth during its Black Friday event, even as it braces for heightened competition in Nigeria’s e-commerce landscape following the entry of Chinese powerhouse Temu. The contrast between Jumia’s expansion strategies and Temu’s disruptive model shows the evolving dynamics of Africa’s digital marketplace.

In the two months ending November 30, 2024, Jumia reported a 17% year-over-year increase in physical goods orders, totaling 3.9 million. Its annual Black Friday event accounted for 62% of these orders. Gross Merchandise Volume (GMV) on a constant currency basis grew by 33%, though currency devaluations in Nigeria and Egypt moderated growth in reported terms to just 2%.

Key highlights from Jumia’s report include:

• A 9% increase in customers placing orders, reaching 1.8 million during the period.
• Enhanced logistics capabilities, handling 5.6 million packages, up from 4.5 million in 2023.
• Significant growth in Nigeria’s rural and smaller urban markets, where orders surged 44% year-over-year, boosted by tailored marketing campaigns and community outreach.
• Strategic focus on priority categories like Phones, Fashion, and Home and Living, complemented by a 31% contribution from international sellers, expanding product variety and pricing options.

Jumia CEO Francis Dufay lauded the performance as a reflection of ongoing operational improvements, stating:

“Our Black Friday results reinforce our belief that we have the right strategy and team to drive e-commerce adoption across Africa, serving a growing consumer base while progressing towards profitability.”

Despite these gains, Jumia faces mounting external pressures, particularly from Temu ’s arrival.

Temu, the global e-commerce arm of China’s PDD Holdings, officially entered the Nigerian market in November. Known for its low-cost, direct-from-manufacturer model, the platform has rapidly gained traction globally, leveraging aggressive advertising campaigns and rock-bottom pricing.

Having spent an estimated $2 billion on ads across Facebook and Instagram in 2023, Temu’s expansion strategy reflects its ambition to capture significant market share in emerging economies. Nigeria, Africa’s largest economy with a burgeoning internet-savvy population, is a prime target.

The entry of Temu marks a pivotal moment for Nigeria’s e-commerce sector, projected to grow from $12 billion in 2019 to $75 billion by 2025, according to the US International Trade Administration.

Rising Stakes for Jumia

While Jumia has traditionally dominated the African e-commerce space, its position has been tested. In Q3 2024, the company reported a 13% decline in revenue year-over-year, and its customer base has plateaued at 2 million since 2023. Temu’s competitive pricing and extensive product range could further strain Jumia’s market share.

Industry analysts suggest that Temu’s entry will drive innovation and benefit Nigerian consumers through lower prices and expanded product choices. However, it also places pressure on local players like Jumia, Konga, and Jiji to refine their offerings and improve cost efficiencies.

For Jumia, adapting to this new competitive environment requires a dual focus on operational efficiency and customer experience. The company’s upcountry strategy, bolstered by investments in logistics and localized marketing, has shown promise. Additionally, its ability to source products internationally positions it well against Temu’s direct-from-China model.

However, Temu’s logistical advantages, global supply chain expertise, and aggressive pricing pose a formidable challenge. As competition intensifies, the ultimate winners may be Nigerian consumers, who stand to benefit from increased choices and lower costs.

Jumia is set to report its full Q4 2024 financial results in February 2025, offering a clearer picture of how well it is weathering the storm brought by Temu ’s entry. For now, the battle lines are drawn in what could be a transformative period for Nigeria’s e-commerce market.