Africa’s e-commerce giant adopts Chinese playbook to battle Shein, Temu

Jumia plans to adopt a bold new strategy to fend off fierce competition from Chinese e-commerce giants Shein and Temu.

The pan-African platform is strategically utilising the U.S.-China trade war to boost its African e-commerce business.

By onboarding Chinese merchants, the e-commerce giant aims to roll out cheaper products to attract more customers.

This move will help Jumia secure its position in price-sensitive markets, as international competitors like Shein and Temu are under major criticism from consumers due to price increase. 

The U.S. tariffs not only affected the e-commerce giants but also impacted vendors. Chinese vendors are now seeking new markets with Jumia opening up new opportunities for them in Africa.

Jumia has established a dedicated 70-person team in Shenzhen to recruit sellers and goods from Chinese merchants. These products now account for one-third of its total sales volume.

CEO of Jumia, Francis Dufay, emphasized that the company has rebuilt its core strategy by targeting the middle class of Africa with highly affordable products.

He stated: “Our typical customer earns $200-$500 per month, that means offering $5-$10 shoes and $80 TVs instead of $1,000-$2,000 items.”

To further strengthen the company, Jumia has strategically streamlined its operations. The company exited unprofitable markets such as food delivery, and sharpened its focus on its customer base in Nigeria, Kenya and Egypt.

Despite a chequered past of volatile investors and a market cap that has fallen sharply since its 2019 initial public offering (IPO), Jumia is showing signs of progress again.

A 25% year-on-year revenue increase has been reported by the company recently, with the company plans to sustain the surge in profits by 2027.