Jumia, a Rocket Internet eCommerce company in Nigeria has about 6,000 active merchants on its platform.
The disclosure was made in a television interview with Juliet Anammah, monitored, its CEO for the Nigerian unit of the company.
According to her, there are over 30,000 registered merchants on the platform. The disparity between both numbers shows that there is a reduction in the number of merchants on eCommerce companies kitty.
Last year, Rocket Internet announced that it has moved away from an inventory model merchant system where retailers and companies basically list their product for Jumia to handle payment, delivery and the technology serving as the backbone of the business.
Konga, Jumia’s closest rival has also adopted the same model since last year. As 2015, Konga disclosed that it had over 30,000 merchants. There are no data on how of these retailers are active.
The move to a merchant system has seriously impacted the revenue of Jumia. As at third quarter 2016, Rocket Internet, Jumia’s parent company said the local unit was in debt to the tune of EUR35.4 million. Rocket Internet has gone ahead to raise more funds from its investors in order to defend many of its ventures that have not yet turn in profit.
In its second quarter result, Rocket Internet said it is looking at posting its profit by 2018. The feasibility of this vision cannot be ascertained as the business model of Jumia has since changed.
The move to merchant model also come with its attendant issues. There are complaints on the quality of goods sold on these sites which Jumia, Konga and its competitors can no longer control the quality of goods on their site.
Rocket Internet has so far raised fresh EUR1 billion via investment commitment from Rocket Internet Capital Partners, RICP and other existing investors. The company will be releasing its full year result on the
Konga is jointly owned by Norwegian Kinnevik AB and South Africa’s Naspers. Both investors have not announced a new series of fundraising for the eCommerce company.
The current economic recession in Nigeria will continue to impact all eCommerce companies in Nigeria. The crash in value of Naira (NGN) has reduced the purchasing power of the lower middle class, many of whom are targeted by eCommerce sites in Africa’s largest economy.