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Jumia, Africa’s biggest online retailer, is ramping up the number of China-based merchants on its platforms as it struggles to counter fierce competition from Chinese e-commerce giants Temu and Shein.
“We have significantly strengthened our relationships with international sellers, especially from China,” said Francis Dufay, Jumia’s CEO, on a call with investors earlier this month. “Our Chinese vendor base is scaling rapidly, and the supply pipeline is more robust than ever,” he added.
Temu launched in Nigeria in November 2024, gaining traction through aggressive advertising, deep discounts, and promises of delivery within two weeks. Shein, while more targeted, is using influencer-driven marketing to expand in major urban centers across South Africa, Kenya, and Ghana. Neither retailer has established full physical operations on the continent.
Dufay referred to Temu and Shein as “non-resident Chinese platforms,” highlighting their cross-border models that allow them to sell directly into African markets without establishing local operations.
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Temu and Shein operate with advantages African platforms struggle to match: tightly integrated global supply chains, vast cash reserves, and little pressure for short-term profits. Temu’s parent company, PDD Holdings, generated $34.9 billion in revenue in 2023 and reportedly spent $2 billion advertising on Meta platforms.
Temu and Shein have a simpler playbook: no local infrastructure, just app virality, endless inventory, and prices low enough to force a second look. Their ads are omnipresent on Google, Instagram, TikTok, and YouTube.
Olumuyiwa Olowogboyega’s view
There was a time when Jumia’s biggest competition was Nigeria’s army of informal retailers who operate in open markets and with flexible pricing. The new contest is with global platforms that can outspend, out-stock, and outsell local incumbents without ever opening a warehouse on the continent.
The timing is especially difficult for Jumia. In earlier years, it was flush with capital and could burn cash to win market share. Today, it has a liquidity position of around $100 million on annual losses of around $50 million, and its market capitalization has tumbled to around $400 million from around $1.5 billion in less than three years.
It has trimmed its workforce, exited unprofitable market segments, and is under pressure to become profitable by 2027. By contrast, Temu is in full blitz mode, moving fast and seemingly viewing Africa as a growth frontier.
It means Jumia needs to preserve its margins while responding to these richer rivals. It’s doing that by focusing on its unique advantages: a deep familiarity with African users, near-instant delivery, and a payment-on-delivery model.
But its response to the global competition may not be enough. “Simply listing Chinese merchants who may also be listed on Shein or Temu may not cut it if Jumia doesn’t invest as aggressively in advertising or merchant price control,” said Abraham Augustine, an ecosystem manager at the impact investing firm Norrsken.
Room for Disagreement
While Temu and Shein can win the price war, their cross-border model comes with trade-offs: longer shipping times, complicated returns, and limited after-sales support. That’s why some analysts argue that trust remains Jumia’s critical advantage. Jumia could still win by being consistent, if not the cheapest.
Notable
- Jumia exited South Africa and Tunisia late last year as part of a wider plan to sharpen its focus on key markets including Egypt, Kenya, and Nigeria.