Reading Jumia Q3 2022 Report, NIPOST is Key for Nigeria’s B2C ecommerce To Blossom

The economy is hitting white collar workers hard as software and broad automation begins a new architectural alignment to redesign the global economy. They have said that software will eat the world. Indeed, it will also save it. But many bad feelings will come along the way. As Amazon, Facebook, etc lay off tens of thousands of workers, we will begin to understand that even the engineers and the super-educated professionals are not protected from the powers of technology. The only strategy will be continuous training/development  so that if one door closes, as another opens, you will be ready.

Amid widespread layoffs in industries including tech, banking and media, some experts predict that white-collar workers will see the worst of a softening labor market. The pandemic triggered companies to “buy more software, deploy more technology” in a bid to become more efficient, pushing out white-collar workers, William Lee, chief economist at the Milken Institute think tank, tells CNN Business. And when it comes to tech, it’s middle managers and engineers who are bearing the brunt of more than a year of over-hiring, according to workplace specialist Andy Challenger.

These changes are also happening across sectors. I have read the Jumia Q3 2022 report. If you read deeper, you will understand that logistics remains a major challenge for Jumia to unlock its real value. Yes, the marginal cost paralysis is at the heart of its market performance in New York.  To deal with that, it plans to trim or suspend some services: Jumia Prime, logistics as a service, etc.

• Suspend logistics-as-a-service offering in selected geographies: in countries where logistics
  infrastructure is not ready yet to support third-party volumes
• More disciplined approach to our logistics-as-a-service offering: suspend the service in
  selected countries, ensuring the systems and infrastructure are ready to support third-party volumes
• Increase customer centricity and improve experience: more user-friendly and engaging UI,
  deeper logistics reach with shorter delivery times, more effective customer-support
• Fulfillment: scale back on product categories with inefficient delivery economics (grocery in
  selected geographies), renegotiate delivery rates with relevant third-party logistics partners, enhance
  productivity in warehouses

Indeed, Jumia is doing everything to manage logistics better because supply chain/logistics is commerce. You cannot have a great ecommerce business without a solid logistics framework. And what does that mean? The biggest innovation in the B2C ecommerce space in Nigeria will come via a functional postal service. If we have one, we will move into ecommerce 2.0 where value will be created. And that postal service must not be a rain-maker. Yes, it can pick some losses but the new economic activities it can seed, after being taxed, will cover in multiples whatever those losses may be.

Yes, the Nigerian Postal Service (NIPOST) holds the ace to bring that disruptive innovation we expect in B2C ecommerce. Without it showing up, this sector will continue to underperform with losses.

African e-commerce company Jumia reported $50.5 million in revenue for this year’s third quarter with declining operating losses (33%) and increasing gross profit (29%) compared to last year, while active customers and the value of services sold improved marginally. These results come out barely a week after the company’s co-CEOs since 2012 stepped down—a move that raised eyebrows in the industry as to the company’s direction.

Comment on Feed

Comment 1: Thanks Prof Ndubuisi Ekekwe for the share. Your point correlated quite well with what Jeff Bezos shared for the success of Amazon at the beginning of their business. A solid government infrastructure i.e. US Postal Service.

That’s the equivalent of our NIPOST. But I tell you, that will need a lot of reengineering for us to turn it around. The system doesn’t seem to be in existence again even though they have prime locations all over the nation.

Comment 2: There has been a lot of conversation around NIPOST capacity and capability. I am also a proponent of revamping the NIPOST footprint to support the ever-growing Nigerian population and last mile deliveries. If NIPOST is not revamped, it will be extremely hard for ecommerce or any form of commerce to take shape in Nigeria. Whatever is going on in delivery space at the moment in Nigeria, is just to stop gap but the levy won’t hold for long. The supply chain and logistics space in Nigeria and Africa by large is still a virgin land for a lot of innovation and technological take over and I believe NIPOST will be a huge benefactor of it all. Prof Ndubuisi Ekekwe second time I will say this in the last 24hrs, flesh and blood have not revealed this to you.

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