Recently, e-commerce giant Jumia marked its 11th year anniversary. But the event was far from the celebration that many would have expected. It was a low key event that underlines how the company has struggled for results.

Jumia’s journey has been far from smooth sailing lately, with growth ambitions falling short of expectations, leading to accumulating losses of approximately $2 billion by the third quarter of 2022. Among the triggers for these losses was a damning report by a notorious short seller in 2019, causing the company’s stock price to plummet.

The company’s resolve to reverse its fortunes has led it to explore new avenues, particularly by expanding its footprint into previously untapped rural markets. “This is in line with the master plan to be profitable,” asserts Massimiliano Spalazzi, CEO of Jumia Nigeria, highlighting the company’s determination. Since 2022, Jumia’s Nigerian division has been making inroads into rural and semi-rural markets, reaching previously overlooked towns like Modaleke, Nkpor, Owo, Offa, and Keffi. These areas are now becoming home to fulfillment centers that serve as vital pick-up stations for customers.

“The business of e-commerce is extremely relevant to those who don’t have access to retail,” emphasizes Abdesslam Benzitouni, Jumia’s Global Head of Communications & Public Relations. While 52% of Nigerians reside in urban centers, the remaining 48% remain underserved. The dearth of retail options in many African countries underscores the potential impact of Jumia’s rural strategy, especially in comparison to the more favorable ratios in parts of Europe and the United States.

Jumia’s traditional marketing tactics, though omnipresent, have proven less effective at converting their desired middle-class audience in Nigeria. The company recognized this and adjusted its approach, slashing its advertising budget by 40% in Q4 2022. Instead, Jumia is redirecting its focus towards JForce, a dedicated team of over 43,000 independent sales consultants.

These JForce agents play a pivotal role in educating and onboarding users, particularly those with limited exposure to technology or education. Emphasizing in-person activations and door-to-door campaigns, they are better positioned to drive conversions. In return, Jumia rewards these agents with commissions ranging from 1.5% to 8%, based on the location of completed orders.

Furthermore, Jumia’s strategy entails enhancing its physical presence through a network of pick-up stations. “It just helps when people can see some physical presence,” Benzitouni explains. Instead of expanding aggressively to new countries, the company’s focus is on deepening its roots within rural communities.

While Jumia’s pursuit of rural markets might be novel for Nigeria, it’s not entirely uncharted territory. Drawing inspiration from successful precedents, such as Copia Global’s operations in Kenya and Uganda, Jumia aims to provide a channel for the exchange of goods between rural communities and urban centers.

Can the rural market strategy deliver  expected result?

Breaking into Nigeria’s rural markets is no small feat, especially considering that online purchases represented just 7% of all transactions in 2021. Jumia recognizes the challenges, acknowledging that rural residents possess limited purchasing power compared to their urban counterparts. Despite these obstacles, the company pins its hopes on affordable delivery services as a means of attracting rural consumers.

If Jumia succeeds in this endeavor, it could potentially mark a watershed moment for Nigerian e-commerce. The focus of many firms may shift from the shrinking middle class to rural and sub-rural communities, transforming the landscape of the industry. As Jumia takes this audacious leap, the question that lingers is whether these strategies will prove sufficient to secure victory in this uncharted territory.