- MasterCard, Jumia to Diversify Africa’s Cashless Initiative
Africa’s online retail sector is set to receive another boost with an exciting opportunity for retailers to grow their businesses by connecting with new customers, courtesy of MasterCard and Jumia.
According to Jumia, a leading online retail platform, the e-commerce sector must focus on delivering a stronger consumer experience if it is to reach its full potential of developing into a $50billion industry by 2018.
The true potential of the online retail environment, it said, remained largely untapped in Africa, especially considering that seven of the 10 fastest growing internet populations in the world are in Africa.
In order to achieve full potential of the e-commerce business, Jumia said it has joined forces with technology company, Mastercard to drive cash out of the online retail sector and provide a more secure and convenient way for consumers to shop online. Many online purchases are still being paid for with cash at point of delivery, the online company said.
Co-Founder and Co-CEO of Jumia, Jeremy Hodara, said: “Developing stronger and streamlined online retail platforms and offerings is necessary to unlock the full potential of e-commerce on the continent. Optimising the overall customer experience by guaranteeing safer and simpler payments mean opening the online retail environment to greater numbers of African citizens.”
He added: “Cash is still widely used by consumers and e-retailers. On Jumia for instance, between 65 and 95 per cent of all orders are paid using cash on delivery, a percentage that varies according to the countries in which the e-retailer operates. This clearly confirms the widespread use of cash, which presents an opportunity to introduce digital payment solutions that meet the needs of both the consumer and the e-retailer”, Hodara added.
He noted that consumers are still hesitant about paying for items online which contributes to the drop off at check-out and abandoned online shopping carts.
Division President for sub-Saharan Africa at Mastercard, Daniel Monehin, said: “Studies by GSMA indicate that mobile has taken over as the platform of choice for creating, distributing and consuming innovative digital solutions and services in Africa. Mobile is an obvious way to boost the growth of the e-commerce sector and deliver a more user friendly experience.”
Monehin further said that in Africa, mobile banking had experience more growth than traditional banking, enabling previously unbanked consumers to transact in ways never seen before.
The continent’s consumer is more connected and willing to try new technology solutions, and with mobile penetration currently at over 85 per cent and nearly half a billion Africans subscribing to mobile services, it is clear that this platform must be taken seriously by retailers and governments alike, Monehin said.
According to him, mobile services in e-commerce have the power to remove the need for merchants and consumers to physically transact, opening the doors for better and easier ways to connect digitally. This removes the need for physical retail outlets, which means that cash must be removed from the online sector and replaced with quick and easy solutions using the latest technology.
Besides connecting more Africans’, the online sector is also able to provide entrepreneurs with viable business opportunities helping to develop new job opportunities, Monehin said, adding that the partnership with Mastercard will give Jumia a valuable edge that will support its growth in Africa.