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Technology

How Jumia is turning estate shops into e-commerce hubs

Sam Chappatte
Chief executive Sam Chappatte. FILE PHOTO | NMG 

Globally, e-commerce is undoubtedly the future as more people exchange the hassles that come with brick and mortar stores with the convenience of having everything ordered and delivered at the touch of a button.

While this is a step in the right direction, individuals may not know how to use e-commerce sites nor trust them enough with their hard-earned money.

Realising this barrier, Jumia, the largest e-commerce site in Kenya, has found a way around this by establishing Pickup Stations — physical places where one can inquire information on how to use Jumia as well as place and collect orders.

“Pickup Stations are existing shops in our local neighbourhood that apply to become pickup stations. At the heart of this model is community,” Sam Chappatte, the Managing Director of Jumia tells Digital Business in an interview.

The stations are designed to be close to where customers are — at home or at work — and offer the most affordable way to shop on Jumia as they charge the lowest delivery fee.

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“Jumia taps on the existing relationships these shop owners have with their neighbourhoods to build confidence in e-commerce and deliver on their promise,” says Mr Chappate.

The model — which started one and a half years ago – has seen success as more small shop owners are signing up to become Jumia Pickup Stations. To qualify, a shop owner signs up on the Jumia platform and indicates their interest.

“After receiving the application, we will send one of our team captains to visit them, do a final assessment and help them setup,” Mr Chappatte explains.

The other requirements that candidates need to meet are; to have capacity to handle a maximum of 50 packages at any point in their shop, a secure location, ample storage space, internet, an internet access device (mobile phone, tablet or laptop) and a branding license.

As Jumia works to achieve their goal of building trust in digital business, they also boost the shop owners by training them on e-commerce, customer service and bookkeeping, key ingredients for a successful business.

One such shop owner is Rachel Wanjiru, the founder of Imara Carpets, where she sells carpets and household items. In 2019, she signed up to become a pickup station for Imara estate and its environs.

“When I signed up, my business was fairly new. Partnering with Jumia increased my visibility and exposure because as people come to place or collect their orders, they get to know about my business too. This, in turn, has translated to more sales for my business”.

Small business owners like Ms Wanjiru earn money from Jumia in two ways; a fixed amount with every package collected and a commission for every order placed from their shop. This income together with the shop owner’s sales improve the overall earnings of the entrepreneur.

For Ms Wanjiru, her earnings have grown from between Sh40,000 and Sh50,000 to up to Sh75,000 monthly. The money from being a pickup station alone makes her rent affordable.

Ms Wanjiru can trace her earnings not only from this partnership but also from online sales.

Before Jumia, Imara Carpets had no online presence since Ms Wanjiru did not understand the power of online marketing. Thanks to the e-commerce training offered, she now has a strong online brand and has also registered Imara Carpets on Jumia as a vendor, both of which have contributed significantly to her sales.

Steve Ndung’u, who runs Speedbite Technologies, a Cyber cafe in South B, joined Jumia as a pickup station in February. He echoes Ms Wanjiru’s sentiments that there is a lot of potential for growth in this model as it does not require much from an already existing business.

As a Jumia shopper himself, he had to go all the way from South B to Industrial Area or the CBD to collect his purchases. Certain that there were others like him, he took it upon himself to make their shopping experience better by bringing their products closer to home.

Since he began, he serves at least five clients a day, and his income has grown by 10 percent. Like Ms Wanjiru, he’s particularly grateful for the customer service training Jumia gave him, not forgetting the credibility he has gained by being associated with the brand.

“When people see Jumia’s logo, they’re assured of the best service possible. Otherwise, Jumia wouldn’t have partnered with us,” he remarks.

Over this Covid-19 period, these pickup stations have proved to be effective because they ensure contactless and cashless deliveries, thus helping reduce the spread of the virus. There’s been an increase in uptake especially in the last two month since most people are at home following the outbreak.

“Being a pickup station has also supplemented my business’ income as the economy has slowed down,” says Mr Ndung’u adding that he has seen a lot of repeat customers, especially those buying groceries. The most ordered goods include household items, groceries, TVs, phones and related accessories.

Stations in South B, Kahawa West, Donholm, BuruBuru and Imara Daima are leading with the highest number of customers. These neighbourhoods are densely populated with middle income earners who want to collect their orders near their estates, allowing them to avoid crowded places such as supermarkets.

Nonetheless, this hasn’t come without challenges, Mr Chappatte says. Delivering excellent customer service through the stations, giving them adequate incentives and protecting themselves from fraud are some of the hurdles they have encountered along the way and managed to work through.

Currently, the model is restricted to Nairobi and Mombasa counties, which have over 200 pickup stations.

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