Jumia Signs Deal With Leroy Merlin as It Focuses on High-Growth Rural Areas

Leading e-commerce platform in Africa Jumia has signed a partnership deal with French retailer Leroy Merlin as it focuses to sell its products in rural areas in a few West African countries to expand its reach.

The partnership deal between the two firms will see Leroy Merlin enter Francophone countries such as Cote d’Ivoire and Senegal via Jumia’s e-commerce portal.

According to Jumia CEO Francis Dufay, more than half of Africa’s 1.4 billion strong population lives outside big cities or in rural areas where the economies are driven by agriculture. This means there is strong demand for the kinds of products Leroy Merlin offers in areas that are not well served by retailers.

In his words,

“Jumia is pushing into these areas, we have the right suppliers and assortment of products, and a light logistics model to address those smaller pools of consumers. This would be much harder to do for bigger supermarkets and shops for instance.

“While we are facing big headwinds, we are building these new markets in smaller cities, and plan to drive margins with that. Jumai is considering taking the model to Kenya, Ghana, and Nigeria next.”

Investors King understands that Jumia is hoping to cut its losses by 50 percent by the end of the year. The e-commerce giant is reported to have hedged its bets on rural markets across the continent, of which the deal with French retailer Leroy Merlin plays a big part.

The e-commerce giant platform was built to help consumers access millions of goods and services conveniently and at the best prices while opening up a new way for sellers to reach consumers and grow their businesses.

Listed on the New York Stock Exchange (NYSE) in 2019, is currently operating in 11 African countries.  The Jumia platform consists of a marketplace, which connects sellers with consumers, a logistics service, which enables the shipment and delivery of packages from sellers to consumers, and a payment service, JumiaPay, which offers a safe and easy solution to facilitate online payment transactions.

As of 2023, Jumia’s home market, Nigeria, accounted for the majority of the visits, around 31 percent of the total, followed by Morocco and Egypt with shares of 17 percent and 14 percent respectively.