Africa's E-Commerce Platform Jumia Rides Trade War Tailwind (Bloomberg)

Jumia Technologies AG’s Chief Executive Officer Francis Dufay said the global trade war is benefiting Africa’s biggest e-commerce company by increasing its access to Chinese goods.

US President Donald Trump’s tit-for-tat tariffs with China have caused the world’s second largest economy to divert goods to other markets including Africa.

“Our pipeline of goods from China is getting healthier and healthier and we have a lot more interest from Chinese suppliers and vendors,” Dufay said in a Bloomberg TV interview. “It’s really making our lives much easier.”

While Africa has many rapidly growing economies and the fastest growing population in the world, it has been struggling with limited infrastructure, currency volatility and high inflation. This has made it a less appealing market to Asian manufacturers, Dufay said. But as tariffs throttled Chinese shipments to the US, exports to Africa have soared by 25% year on year.

Read More: China Pours Exports Into Africa Faster Than Anywhere Else

Jumia has also been restructuring to cut costs, exiting markets like South Africa and Tunisia and stopping food delivery operations. It’s now the biggest e-commerce company in eight of the nine countries in which it operates, Dufay said, and there’s been more currency stability in recent months. “Consumers are gaining more confidence,” he added.

This is helping Jumia defend its market position against incoming, low-cost Chinese retailers Temu and Shein. Dufay said the company had a strong head start, building out large logistics networks and fleets that competitors will struggle to replicate. It’s maintained its top position in Nigeria, where Temu started making a push late last year, he added.

Often referred to as the “Amazon of Africa,” Jumia has had to do its own mapping in some of its markets and set up logistics networks to cater to the young and increasingly tech-savvy population that uses smartphones to bridge gaps in infrastructure and services.

Jumia was one of the first African companies to achieve “unicorn” status when it listed in New York in 2019, but its market value has plummeted from a January 2021 peak of more than $5 billion. Still, shares have increased 210% so far this year to achieve a market value of about $1.45 billion.

Read the original article on Bloomberg