NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, March 14, 2019

By Yomi Kazeem

The early day novelty around e-commerce businesses in African markets has long since been replaced by the realities of the industry’s difficulties.

While Jumia’s proposed listing on the New York Stock Exchange is a boon for the sector, it also inadvertently serves as a reminder of how tough the space is. Indeed, parts of Jumia’s S1 filing with the US Securities and Exchange Commission (SEC) read like a long list of reasons making a case against e-commerce in Africa.

Being upfront and extensive about possible business risks are routine when filing for initial public offerings. And while some the 23 “risk factors” Jumia lists in its filing can be seen as generic business risks (political instability, regulatory uncertainty and active competitors), others offer an insight into the difficulties of achieving e-commerce in some of the continent’s markets.

Photo courtesy of Remko van Dokkum.