Jumia at the forefront of Uganda’s shift to e-commerce

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By Our writer

Electronic commerce is increasingly gaining momentum in Uganda and across Africa, having been ‘oiled’ by the 2020 outbreak of the COVID-19 pandemic that forced most businesses, irrespective of size to shift online.

One company that has been at the forefront of Africa’s growing e-commerce business is Jumia, one of the continent’s biggest platforms that have integrated logistics and digital payment services.

According to Timothy Mugume, the Jumia Food Uganda Country Lead, the firm, which connects customers across Africa to the different vendors, has enabled its customers have access to whatever goods they want, especially during the lockdown.

Jumia offers a range of services right from food deliveries to groceries, electronics and appliances and pharmaceutical products, among others to customers at affordable rates.

 “From the onset of the first lockdown last year, we put our partners – vendors and customers – at the forefront because their business continuity was paramount to us,” Mugume says.

Jumia, according to Mugume, is especially passionate about supporting women-led businesses. In partnership with organizations like the Kampala Capital City Authority and UNDP, the firm has trained women entrepreneurs in various skills including digital and business management, as well as undertaking initiatives that level the playing ground for them to compete effectively.

40-Days 40 FinTechs

Jumia Food is among the firms participating in the ongoing second edition of the 40-Days 40-FinTechs initiative, organized by HiPipo in partnership with Crosslake Technologies, ModusBox and Mojaloop Foundation, and sponsored by the Gates Foundation.

Mugume commended HiPipo for the initiative, saying that it has helped highlight tech innovations in the country and also created a platform to showcase leading innovations in Uganda and across the continent.

“FinTech and innovation is what we need to pull Uganda out of the challenges of slow economic growth. A platform like this provided by HiPipo highlighting the different ideas does not only stand as a beacon to bring hope to the economy but also highlights this information and shares it with interested parties, which is good for the ecosystem,” Mugume says.

The HiPipo Chief Executive Officer Innocent Kawooya notes that FinTech in Africa offers attractive opportunities, adding that investors are rightfully picking interest in various startups offering a plethora of services, ranging from payments and lending, remittances and cross-border transfers, among others.

“Each of these services solves unique sets of challenges. For example; with cross-border payments comes the opportunity to erase the outrageous rates and bureaucratic bottlenecks that stymie transactions and thus trade among African countries,” Kawooya says.

He adds that the 40-Days 40-FinTechs initiative seeks to boost the African FinTech ecosystem to enable innovators enjoy sustainable profitability to help them design and deploy affordable and inclusive financial services for the poor.

Having participated in the 2020 initiative, Mugume says Jumia picked key financial inclusion lessons which it has since implemented, including continuous adherence to its transparency policy, especially on the privacy and business practices.

Additionally, it ensures that vendors are settled in time as per the agreed timelines, in addition to ensuring that the right documentation in form of Know-Your-Customer (KYC) are obtained from the vendor to ensure smooth business transactions between them.

“It is important that we follow best practices like Level One Project Principles because most of these businesses do not have a lot of capital and we are cognizant of this; that is why we have flexible payment terms depending on the agreements signed,” Mugume explains.

He urges all market players to respect the same-day settlement principle, given that the ecosystem is heavily reliant on cash flows.

“This is a cash flow business and we must play our role as well; we make it easy for the customers to pay through our various payment channels; we should also settle with our vendors in a timely manner.”