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Jumia, the pan-African e-commerce pioneer, has recently unveiled the launch of its flagship tech centre in Cairo, which is expected to boost electronic payments in Egypt and across the African continent.
“The centre is upgrading the Jumia Pay platform every day, either by adding new e-payment methods, which are already available in countries where we operate, or by creating new features,” Hesham Safwat, CEO of Jumia Egypt, told Zawya.
Jumia hosts three different platforms: a marketplace, Jumia Logistics and Jumia Pay. The NYSE-listed company operates in twelve African countries, including Nigeria, Egypt, Tunisia, Morocco, Algeria, Kenya, Ivory Coast, South Africa, Uganda and Senegal.
According to the company, the marketplace, which is called JUMIA, helps millions of consumers and sellers across Africa. Jumia logistics enables the delivery of millions of packages across the continent, and Jumia Pay facilitates online financial transactions.
“As market leaders in Africa and Egypt in this field, we should promote e-commerce,” said Safwat. “And the growth of e-commerce depends on the growth of electronic payments.”
In February, the eight-year-old company announced that Egypt had been chosen to host its first tech centre, given the fact that it houses the largest population of well-trained communication engineers and IT developers, said Safwat.
“Secondly, Egypt is one of the top African countries in terms of the number of e-payment transactions, which would allow Cairo-based developers to be in constant touch with one of our most developed markets,” Safwat added.
The company is currently expanding its tech center so that the number of new hires exceeds 100 by the end of 2021, said Safwat. Job applications are vetted by the company’s African and European experts to ensure the selection of the best candidates, he added.
“The centre is not only serving Egypt but all of Africa and this is why we believe the centre is a way to export technology from Egypt to other African countries,” Safwat said.
Serving the unbanked
However, these Cairo-based developers will have to contend with the fact that e-payment is still in its infancy in Egypt. More than 50 percent of Egypt’s population use the Internet; however, nearly 68 percent the country’s adult population remain unbanked.
“Very few Egyptians have bank accounts. The good thing is that mobile wallets are becoming popular, but the total number of wallets and bank accounts is still too small compared to the number of internet users in Egypt,” Safwat remarked.
As soon as the coronavirus pandemic hit, the Central Bank of Egypt launched several initiatives aimed at bolstering digital inclusion by promoting electronic payments. The fear of infection through cash-based transaction has bolstered such initiatives.
According to the National Telecom Regulatory Authority, the number of e-wallets jumped from 12.3 million in March 2020 to 14.4 million in October 2020. The number of monthly e-wallet transactions increased from 3.9 million to 9.9 million during the same period.
“We are late in adopting wallets despite the fact that it is the easiest and fastest-spreading e-payment method. In a country like Kenya, e-wallets have already become part of the culture. Hopefully, we can catch up soon,” said Safwat.
Egypt has recently seen the rise of many fintech companies, which now compete over a potentially growing market. However, Jumia Egypt sees such businesses as potential partners rather than competitors.
“As a tech company, we create platforms where we aggregate all services and products that are available in the Egyptian market so that users can have access to all that through only one access point and by using only one account. We are sparing customers the hassle of using different platforms and applications for different purposes,” Safwat explained.
To this end, Jumia Pay has teamed up with Fawry, an Egyptian e-payments platform, and Aman, a young fintech company, to offer their services, including money transfer and bill collection.
Online food delivery
In late March, the company’s Egyptian subsidiary launched Jumia Food, a new application that allows users to place online orders with restaurants. So far, key restaurants and food companies such as McDonald’s and Americana have signed on, according to Safwat. “We launched Jumia Food because we believe that the Egyptian food delivery market is huge, full of opportunities and very promising.”
According to Statista.com, the revenue of the online food delivery market is projected to reach $99 million by the end of 2021. It is expected to show an annual growth rate of 13.47 percent until the market volume reaches $145 million in 2024.
Safwat has high hopes for the level of penetration that Jumia Food can achieve in Egypt by the end of 2021. “We want to secure in less than a year the same growth level that Jumia Food achieved over the course of three years in the ten other African countries where the application has been available,” he said, adding that Jumia Food will soon add grocery stores.
For over a decade, Egypt’s online food delivery market was dominated by the Otlob company, which is now known as Talabat. However, this hegemony was broken with the arrival of more local players such as Elmenus, Marsool, Akelni, Mrsool.
Safwat believes Jumia already has an edge over other food delivery applications that would make it the most attractive to food and restaurant companies: “I already have a ripe database of users, thousands of users are already using my platform every day. So, it is very easy for restaurants to reach these users via Jumia.”
(Reporting by Noha El Hennawy; editing by Seban Scaria)
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© ZAWYA 2021
