CBx International

UPS Doubles Down On The African Market With Jumia Partnership In $180 Billion Market

April 26, 2022

By Jonathan Ntege Lubwama

  • UPS enters partnership with African e-commerce giant Jumia to leverage the 3,000 delivery and pick up points across the continent
  • Digital trade will add $180 billion to Africa’s economy by 2025

A U.S. delivery company is expanding its African footprint, United Parcel Service (UPS -0.54%) announced a partnership with e-commerce giant Jumia (JMIA -4.19%) to increase its reach across the continent. UPS will take advantage of the 3,000 drop-off and pick-up points that Jumia has built across its markets in Africa, to ensure its users get their packages directly delivered to their front door. Digital trade will add $180 billion to Africa’s economy by 2025 according to UNDP, and such partnerships could become a significant part of Jumia’s strategy as more global companies look to make inroads into the continent.

Why This Matters: Jumia launched operations in Africa in 2012 when last-mile delivery, especially for small goods was almost non-existent. It navigated this by building its own delivery service through partnerships with many small firms across the continent. Now that they’re partnering with logistics giant UPS, users in Africa will be able to get their goods at their homes or at pickup points near them.

Jumia had reserved the logistics for its own services, but this partnership offers a new revenue stream for a company that has struggled to reach the unicorn heights since its IPO. Shares have fallen 75% from its all-time high, as the company struggles to convince investors of its ability to become profitable.

"This partnership will help small and medium-sized businesses in Africa that make up 90 percent of all businesses on the continent and are the backbone of the economy. said Gregory Goba Ble, Vice President of Engineering and Operations for Indian subcontinent, Middle East and Africa, UPS.

What’s Next: The partnership will start with UPS customers in Kenya, Morocco, and Nigeria, but will expand to other Jumia markets like Uganda, South Africa, Ivory Coast, and Ghana among others.

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