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April 21, 2019
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Amazon’s one-two punch: How traditional retailers can fight back

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If you think physical retail is dead, you couldn’t be more wrong. Despite the explosion in e-commerce, we’re still buying plenty of stuff in offline stores. In 2017, U.S. retail sales totaled $3.49 trillion, of which only 13 percent (about $435 billion) were e-commerce sales. True, e-commerce is growing at a much faster annual pace. But we’re still very far from the tipping point.

Amazon, the e-commerce giant, is playing an even longer game than everyone thinks. The company already dominates online retail — Amazon accounted for almost 50 percent of all U.S. e-commerce dollars spent in 2018. But now Amazon is eyeing the much bigger prize: modernizing and dominating retail sales in physical locations, mainly through the use of sophisticated data analysis. The recent reports of Amazon launching its own chain of grocery stores in several U.S. cities — separate from its recent Whole Foods acquisition — is just one example of how this could play out.

You can think of this as the Amazon one-two punch: The company’s vast power in e-commerce is only the initial, quick jab to an opponent’s face. Data-focused innovations in offline retail will be Amazon’s second, much heavier cross. Traditional retailers too focused on the jab aren’t seeing the cross coming. But we think canny retailers can fight back — and avoid getting KO’d. Here’s how.

The e-commerce jab starts with warehousing

Physical storage of goods has long been crucial to advances in commerce. Innovations here range from Henry Ford’s conveyor belt assembly line in 1910, to IBM’s universal product code (the “barcode”) in the early 1970s, to J.C. Penney’s implementation of the first warehouse management system in 1975. Intelligrated (Honeywell), Dematic (KION), Unitronics, Siemens and others further optimized and modernized the traditional warehouse. But then came Amazon.

After expanding from books to a multi-product offering, Amazon Prime launched in 2005. Then, the company’s operational focus turned to enabling scalable two-day shipping. With hundreds of millions of product SKUs, the challenge was how to get your pocket 3-layer suture pad (to cite a super-specific product Amazon now sells) from the back of the warehouse and into the shippers’ hands as quickly as possible.

Make no mistake: Amazon’s one-two retail punch will be formidable.

Amazon met this challenge at a time when automated warehouses still had massive physical footprints and capital-intensive costs. Amazon bought Kiva Systems in 2012, which ushered in the era of Autonomous Guided Vehicles (AGVs), or robots that quickly ferried products from the warehouse’s depths to static human packers.

Since the Kiva acquisition, retailers have scrambled to adopt technology to match Amazon’s warehouse efficiencies.  These technologies range from warehouse management software (made by LogFire, acquired by Oracle; other companies here include Fishbowl and Temando) to warehouse robotics (Locus Robotics, 6 River Systems, Magazino). Some of these companies’ technologies even incorporate wearables (e.g. ProGlove, GetVu) for warehouse workers. We’ve also seen more general-purpose projects in this area, such as Google Robotics. The main adopters of these new technologies are those companies that feel Amazon’s burn most harshly, namely operators of fulfillment centers serving e-commerce.

The schematic below gives a broad picture of their operations and a partial list of warehouse/inventory management technologies they can adopt:

It’s impossible to say what optimizations Amazon will bring to warehousing beyond these, but that may be less important to predict than retailers realize.

The cross: Modernizing the physical retail environment

Amazon has made several recent forays into offline shopping. These range from Amazon Books (physical book stores), Amazon Go (fast retail where consumers skip the cashier entirely) and Amazon 4-Star (stores featuring only products ranked four-stars or higher). Amazon Live is even bringing brick-and-mortar-style shopping streaming to your phone with a home-shopping concept à la QVC. Perhaps most prominently, Amazon’s 2017 purchase of Whole Foods gave the company an entrée into grocery shopping and a nationwide chain of physical stores.

Most retail-watchers have dismissed these projects as dabbling, or — in the case of Whole Foods — focused too narrowly on a particular vertical. But we think they’re missing Bezos’ longer-term strategic aim. Watch that cross: Amazon is mastering how physical retail works today, so it can do offline what it already does incredibly well online, which is harness data to help retailers sell much more intelligently. Amazon recognizes certain products lend themselves better to offline shopping — groceries and children’s clothing are just a few examples.

How can traditional retailers fight back? Get more proactive.

Those shopping experiences are unlikely to disappear. But traditional retailers (and Amazon offline) can understand much, much more about the data points between shopping and purchase. Which path did shoppers take through the store? Which products did they touch and which did they put into a cart? Which items did they try on, and which products did they abandon? Did they ask for different sizes? How does product location within the store influence consumers’ willingness to buy? What product correlations can inform timely marketing offers — for instance, if women often buy hats and sunglasses together in springtime, can a well-timed coupon prompt an additional purchase? Amazon already knows answers to most of these questions online. They want to bring that same intelligence to offline retail.

Obviously, customer privacy will be a crucial concern in this brave new future. But customers have come to expect online data-tracking and now often welcome the more informed recommendations and the convenience this data can bring. Why couldn’t a similar mindset-shift happen in offline retail?

How can retailers fight back?

Make no mistake: Amazon’s one-two retail punch will be formidable. But remember how important the element of surprise is. Too many venture capitalists underestimate physical retail’s importance and pooh-pooh startups focused on this sector. That’s extremely short-sighted.

Does the fact that Amazon is developing computer vision for Amazon Go mean that alternative self-checkout companies (e.g. Trigo, AiFi) are at a disadvantage? I’d argue that this validation is actually an accelerant as traditional retail struggles to keep up.

How can traditional retailers fight back? Get more proactive. Don’t wait for Amazon to show you what the next best-practice in retail should be. There’s plenty of exciting technology you can adopt today to beat Jeff Bezos to the punch. Take Relex, a Finnish startup using AI and machine learning to help brick-and-mortar and e-commerce companies make better forecasts of how products will sell. Or companies like Memomi or Mirow that are creating solutions for a more immersive and interactive offline shopping experience.

Amazon’s one-two punch strategy seems to be working. Traditional retailers are largely blinded by the behemoth’s warehousing innovations, just as they are about to be hit with an in-store innovation blow. New technologies are emerging to help traditional retail rally. The only question is whether they’ll implement the solutions fast enough to stay relevant.

News Source = techcrunch.com

JD founder cautions logistics business must tighten belt

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Alibaba’s arch-foe JD.com has long prided itself on owning and controlling its logistics services: couriers are treated as in-house staff and paid a basic income. But that will end soon as costs keep piling up for the ecommerce giant.

In an internal letter sent to the staff on Monday, JD founder and chief executive Richard Liu said the company will scrap basic salary for couriers as net loss amounted to 2.8 billion yuan ($420 million) in 2018 at JD’s logistics unit.

“The main reason is we had too few orders externally and too high a cost internally,” said Liu. “You all know that the last two years have been quite difficult for the company. We have been in the loss for more than ten years. If losses continue, JD Logistics only has two years of runway left with its capital raised.”

“I don’t think any of our delivery brothers want the company to go bankrupt,” Liu added.

JD Logistics became a standalone business in 2017 and subsequently raised billions of dollars from investors. JD still owns an 81.4 percent stake in the logistics arm, which was valued at around $13.5 billion at the time it raised $2.5 billion in February 2018.

Going forward, JD Logistics will continue to pay social insurances on behalf of its couriers, whose income is now based on the number of packages they handle. Liu assured that the old basic pay accounted for just 10 percent of the delivery staff’s total income so his goal is not to cut but boost salary for them, and eventually for JD Logistics as well.

But couriers are feeling the heat. Monthly pay used to average 7,000 yuan ($1,043) to 8,000 yuan, a Shenzhen-based courier told TechCrunch. Under the new scheme, he and his regional colleagues are earning 5,000 yuan to 6,000 yuan. Liu said in the letter that it’s “up to the couriers” to vie for better salaries, but it’s unclear how they can secure more packages in practice. JD said it has no comment on the issues addressed in Liu’s letter.

JD delivery staff are assigned on a regional basis. Assuming the number of parcels that go out of a region stays relatively constant, couriers can’t do much to boost their piecework wage. Already, some couriers have devised cheats that involve mailing parcels to themselves and rejecting them at delivery in order to jack up income, TechCrunch has learned.

JD Logistics

Photo source: JD Logistics via Weibo

China’s express delivery market, like many other fledgling industries, is a relentless race that sees players offer heavily subsidized prices for customers to stay competitive. JD is going against companies like Alibaba that enlist a consortium of third-party contracted couriers rather than hiring their own to keep costs down.

JD’s fourth-quarter cost of revenues grew 20.7 percent to $16.8 billion, mainly driven by expenses related to logistics services alongside its online direct sales business, the company’s earnings report revealed. The Amazon-like service is finding ways to bulk up revenues by opening its logistics service to third-party clients as well as expanding overseas.

“It’s just a matter of time that JD will remove couriers’ minimum income. It can’t increase the price for customers, so it’s passing the cost to the couriers,” said Alex Cheong, founder and chief executive of Web2Ship, a service that enables price comparisons across different express shipping services, told TechCrunch.

“In China, the only thing [courier companies] can play is the volume game. There’s this mentality that as volume goes up, companies will get more efficient, and costs will lower. But growth is actually slowing,” Cheong warned.

The income restructuring at JD’s logistics arm comes amid a widespread layoff across the parent company to remove low-performers, or what Liu labeled as “slackers.” JD is namechecked as one of China’s internet companies working 9 am to 9 pm, 6 days a week, or “996”, a demanding schedule that has prompted an online protest.

JD denied that it practices the “996” routine though it sees itself as “a competitive workplace that rewards initiative and hard work” which is consistent with its “entrepreneurial roots,” a JD spokesperson told TechCrunch earlier.

The ecommerce titan has long promoted its in-house logistics arm as offering “quality” service, so it remains to see how the removal of basic income will affect couriers’ morale. But one thing is for sure. Under the piece rate system, JD knows its exact labor cost per unit and avoids paying for employees’ idle time.

News Source = techcrunch.com

Get ready for a new era of personalized entertainment

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New machine learning technologies, user interfaces and automated content creation techniques are going to expand the personalization of storytelling beyond algorithmically generated news feeds and content recommendation.

The next wave will be software-generated narratives that are tailored to the tastes and sentiments of a consumer.

Concretely, it means that your digital footprint, personal preferences and context unlock alternative features in the content itself, be it a news article, live video or a hit series on your streaming service.

The title contains different experiences for different people.

From smart recommendations to smarter content

When you use Youtube, Facebook, Google, Amazon, Twitter, Netflix or Spotify, algorithms select what gets recommended to you. The current mainstream services and their user interfaces and recommendation engines have been optimized to serve you content you might be interested in.

Your data, other people’s data, content-related data and machine learning methods are used to match people and content, thus improving the relevance of content recommendations and efficiency of content distribution.

However, so far the content experience itself has mostly been similar to everyone. If the same news article, live video or TV series episode gets recommended to you and me, we both read and watch the same thing, experiencing the same content.

That’s about to change. Soon we’ll be seeing new forms of smart content, in which user interface, machine learning technologies and content itself are combined in a seamless manner to create a personalized content experience.

What is smart content?

Smart content means that content experience itself is affected by who is seeing, watching, reading or listening to content. The content itself changes based on who you are.

We are already seeing the first forerunners in this space. TikTok’s whole content experience is driven by very short videos, audiovisual content sequences if you will, ordered and woven together by algorithms. Every user sees a different, personalized, “whole” based on her viewing history and user profile.

At the same time, Netflix has recently started testing new forms of interactive content (TV series episodes, e.g. Black Mirror: Bandersnatch) in which user’s own choices affect directly the content experience, including dialogue and storyline. And more is on its way. With Love, Death & Robots series, Netflix is experimenting with episode order within a series, serving the episodes in different order for different users.

Some earlier predecessors of interactive audio-visual content include sports event streaming, in which the user can decide which particular stream she follows and how she interacts with the live content, for example rewinding the stream and spotting the key moments based on her own interest.

Simultaneously, we’re seeing how machine learning technologies can be used to create photo-like images of imaginary people, creatures and places. Current systems can recreate and alter entire videos, for example by changing the style, scenery, lighting, environment or central character’s face. Additionally, AI solutions are able to generate music in different genres.

Now, imagine, that TikTok’s individual short videos would be automatically personalized by the effects chosen by an AI system, and thus the whole video would be customized for you. Or that the choices in the Netflix’s interactive content affecting the plot twists, dialogue and even soundtrack, were made automatically by algorithms based on your profile.

Personalized smart content is coming to news as well. Automated systems, using today’s state-of-the-art NLP technologies, can generate long pieces of concise, comprehensible and even inventive textual content at scale. At present, media houses use automated content creation systems, or “robot journalists”, to create news material varying from complete articles to audio-visual clips and visualizations. Through content atomization (breaking content into small modular chunks of information) and machine learning, content production can be increased massively to support smart content creation.

Say that a news article you read or listen to is about a specific political topic that is unfamiliar to you. When comparing the same article with your friend, your version of the story might use different concepts and offer a different angle than your friend’s who’s really deep into politics. A beginner’s smart content news experience would differ from the experience of a topic enthusiast.

Content itself will become a software-like fluid and personalized experience, where your digital footprint and preferences affect not just how the content is recommended and served to you, but what the content actually contains.

Automated storytelling?

How is it possible to create smart content that contains different experiences for different people?

Content needs to be thought and treated as an iterative and configurable process rather than a ready-made static whole that is finished when it has been published in the distribution pipeline.

Importantly, the core building blocks of the content experience change: smart content consists of atomized modular elements that can be modified, updated, remixed, replaced, omitted and activated based on varying rules. In addition, content modules that have been made in the past, can be reused if applicable. Content is designed and developed more like a software.

Currently a significant amount of human effort and computing resources are used to prepare content for machine-powered content distribution and recommendation systems, varying from smart news apps to on-demand streaming services. With smart content, the content creation and its preparation for publication and distribution channels wouldn’t be separate processes. Instead, metadata and other invisible features that describe and define the content are an integral part of the content creation process from the very beginning.

Turning Donald Glover into Jay Gatsby

With smart content, the narrative or image itself becomes an integral part of an iterative feedback loop, in which the user’s actions, emotions and other signals as well as the visible and invisible features of the content itself affect the whole content consumption cycle from the content creation and recommendation to the content experience. With smart content features, a news article or a movie activates different elements of the content for different people.

It’s very likely that smart content for entertainment purposes will have different features and functions than news media content. Moreover, people expect frictionless and effortless content experience and thus smart content experience differs from games. Smart content doesn’t necessarily require direct actions from the user. If the person wants, the content personalization happens proactively and automatically, without explicit user interaction.

Creating smart content requires both human curation and machine intelligence. Humans focus on things that require creativity and deep analysis while AI systems generate, assemble and iterate the content that becomes dynamic and adaptive just like software.

Sustainable smart content

Smart content has different configurations and representations for different users, user interfaces, devices, languages and environments. The same piece of content contains elements that can be accessed through voice user interface or presented in augmented reality applications. Or the whole content expands into a fully immersive virtual reality experience.

In the same way as with the personalized user interfaces and smart devices, smart content can be used for good and bad. It can be used to enlighten and empower, as well as to trick and mislead. Thus it’s critical, that human-centered approach and sustainable values are built in the very core of smart content creation. Personalization needs to be transparent and the user needs to be able to choose if she wants the content to be personalized or not. And of course, not all content will be smart in the same way, if at all.

If used in a sustainable manner, smart content can break filter bubbles and echo chambers as it can be used to make a wide variety of information more accessible for diverse audiences. Through personalization, challenging topics can be presented to people according to their abilities and preferences, regardless of their background or level of education. For example a beginner’s version of vaccination content or digital media literacy article uses gamification elements, and the more experienced user gets directly a thorough fact-packed account of the recent developments and research results.

Smart content is also aligned with the efforts against today’s information operations such as fake news and its different forms such as “deep fakes” (http://www.niemanlab.org/2018/11/how-the-wall-street-journal-is-preparing-its-journalists-to-detect-deepfakes). If the content is like software, a legit software runs on your devices and interfaces without a problem. On the other hand, even the machine-generated realistic-looking but suspicious content, like deep fake, can be detected and filtered out based on its signature and other machine readable qualities.


Smart content is the ultimate combination of user experience design, AI technologies and storytelling.

News media should be among the first to start experimenting with smart content. When the intelligent content starts eating the world, one should be creating ones own intelligent content.

The first players that master the smart content, will be among tomorrow’s reigning digital giants. And that’s one of the main reasons why today’s tech titans are going seriously into the content game. Smart content is coming.

News Source = techcrunch.com

African e-commerce startup Jumia’s shares open at $14.50 in NYSE IPO

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Pan-African e-commerce company Jumia listed on the New York Stock Exchange today, with shares beginning trading at $14.50 under ticker symbol JMIA. This comes four weeks after CEO Sacha Poignonnec confirmed the IPO to TechCrunch and Jumia filed SEC documents.

With the public offering, Jumia becomes the first startup from Africa to list on a major global exchange.

In an updated SEC filing, Jumia indicated it is offering 13,500,000 ADR shares, for an opening price spread of $13 to $16 per share, representing 17.6 percent of all company shares. The IPO could raise up to $216 million for the internet venture.

Since the original announcement (and reflected in the latest SEC docs), Mastercard Europe pre-purchased $50 million in Jumia ordinary shares.

The IPO creates another milestone for Jumia. The company became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

There’s a lot to breakdown on Jumia’s going public. The company is often dubbed the “Amazon of Africa,” and like Amazon, Jumia comes with its own mixed buzz. Jumia’s SEC F-1 prospectus offers us more insight into the venture, and perhaps any startup from Africa, thus far.

About Jumia

Founded in Lagos in 2012 with Rocket Internet  backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data.

Jumia’s original co-founders included Nigerian tech entrepreneurs Tunde Kehinde and Raphael, but both departed in 2015 to form other startups in fintech and logistics.

Starting in Nigeria, the company created many of the components for its digital sales operations. This includes its JumiaPay payment platform and a delivery service of trucks and motorbikes that have become ubiquitous with the Lagos landscape. Jumia has extended this infrastructure as an e-commerce fulfillment product called Jumia Services.

Jumia has also opened itself up to Africa’s traders by allowing local merchants to harness Jumia to sell online. The company has over 80,000 active sellers on the platform using the company’s payment, delivery, and data-analytics services, Jumia Nigeria CEO Juliet Anammah told TechCrunch a previously.

The most popular goods on Jumia’s shopping site include smartphones, washing machines, fashion items, women’s hair care products, and 32-inch TVs, according to Anammah.

Jumia an African startup?

Like Amazon, Jumia brings its own mix of supporters and critics. On the critical side, there are questions of whether it’s actually an African startup. The parent for Jumia Group is incorporated in Germany and current CEOs Jeremy Hodara and Sacha Poignonnec are French.

On the flipside, original Jumia co-founders (Kehinde and Afeodor) are African. The company is headquartered (and also incorporated) in Africa (Lagos), operates exclusively in Africa, pays taxes on the continent, employs 5,128 people in Africa (page 125 of K-1), and the CEO of its largest country operation (Nigeria) Juliet Anammah is Nigerian.

The Africa authenticity debate often shifts into questions of a Jumia diversity deficit, which is of course important from Silicon Valley to Nairobi. The company’s senior management and board is a mix of Africans and expats. Golden State Warriors basketball player and tech investor Andre Iguodala joined Jumia’s board this spring with a priority on “diversity and making sure the African culture is in the company,” he told TechCrunch.

Can Jumia turn a profit?

The Jumia authenticity and diversity debates will no doubt roll on. But the biggest question—the driver behind the VC, the IPO, the founders, and the people buying Jumia’s shares—is whether the startup can generate profits and ROI.

Obviously some of the world’s top venture investors, such as Jumia backers Goldman, AXA, and Mastercard, think so. But for Jumia skeptics, there are the big losses. The company has generated years and years of losses, including negative EBITDA of €172 million in 2018 compared to revenues of €139 that same year.

To be fair to Jumia, most startups (e-commerce startups in particular) rack up losses for years before getting into the black. And operating in a greenfield sector in Africa—where it had to create much of the surrounding infrastructure to do B2C online sales—has presented higher costs for Jumia than e-commerce startups elsewhere.

On the prospects for Jumia’s profitability, two things to watch will be Jumia’s fulfillment expenses and a shift to more revenue from its non-goods-delivery services, which offer lower unit costs and higher-margins. Per Jumia’s SEC F-1 index (see above) freight and shipping make up over half of its fulfillment expenses.

So Jumia has not turned a profit but its revenues have increased steadily, up 11 percent to €93.8M (roughly $106.2 million) in 2017 and up again to €130M (or $147 million) in 2018. If the company boosts customer acquisition and lowers fulfillment costs—which could come from more internet services revenue and platform investment with IPO capital—it could close the gap between revenues and losses. This reflects the equation for most e-commerce startups. With the IPO Jumia will have to publish its first full public financials in 2019, which will provide a better picture of profitability prospects.

Jumia’s IPO and African e-commerce?

There’s is, of course, a bigger play in Jumia’s IPO. One connected to global e-commerce and the future of online retail in Africa.

Jumia going public comes as Africa’s e-commerce landscape has seen its share of ups and downs, notably several failures in DealDey shutting down and the distressed acquisition of Nigerian e-commerce hopeful Konga.com.

As for the big global names, Alibaba has talked about Africa expansion, but for the moment has not entered in full.

Amazon  offers limited e-commerce sales on the continent, but more notably, has started offering AWS services in Africa.

And this week, DHL came on the scene launching its Africa eShop platform with 200 global retailers on board, in partnership with MallforAfrica’s Link Commerce fulfillment service.

Competition to capture Africa’s digitizing consumer markets—expected to spend $2 billion online by 2025, according to McKinsey—could get fierce, with more global entries, acquisitions, and competition on fulfillment services all part of the mix.

And finally, the outcome of Jumia’s IPO carries weight even for its competitors. “Many things, like business decisions and VC investments across Africa’s e-commerce sector are on on hold,” an African e-commerce exec told TechCrunch on background.

“Everyone’s waiting to see what happens with Jumia’s IPO and how they perform,” the exec said.

So the share-price connected to NYSE ticker sign JMIA could reflect not just investor confidence in Jumia, but investor confidence in African e-commerce overall.

News Source = techcrunch.com

DHL launches Africa eShop app for global retailers to sell into Africa

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DHL is launching an e-commerce app called DHL Africa eShop for global retailers to sell goods to Africa’s consumers markets.

The platform goes live today and brings more than 200 U.S. and UK retailers—from Nieman Marcus to Carters—online in 11 African markets: South Africa, Nigeria, Kenya, Mauritius, Ghana, Senegal, Rwanda, Malawi, Botswana, Sierra Leone, and Uganda.

DHL Africa eShop will operate using startup MallforAfrica.com’s white label service, Link Commerce. Payment methods will include local fintech options, such as Nigeria’s Paga and Kenya’s M-Pesa.

The announcement comes as e-commerce in Africa has seen some ups and downs—with online sales startup Jumia announcing an IPO, while several Africa digital retail ventures have recently faltered.

DHL Africa eShop takes advantage of shipping giant’s existing delivery structure on the continent, able to get goods to doorsteps near and far through its DHL Express shipping, tracking, and courier service.

DHL’s partner for the new app, MallforAfrica, has experience collaborating with DHL and a number of big name retailers, including Macy’s and Best Buy. Backed by Helios Investment Partners, MFA was founded in 2011 to solve challenges global consumer goods companies face when entering Africa.

MallforAfrica’s payment and delivery system serves as a digital broker and logistics manager for U.S. retailers that come online with the startup to sell their goods to African consumers.

DHL has been a MallforAfrica logistics partner since 2015 and in 2018, the two teamed up to launch MarketPlaceAfrica.com—an e-commerce site for select African artisans to sell their goods in any of DHL’s 220 delivery countries.

For DHL Africa eShop, MallforAfrica’s Link Commerce service will facilitate local payments, procurement, and delivery, MallforAfrica CEO Chris Folayan told TechCrunch.

“That’s what our service does. It takes care of that whole ecosystem to enable global e-commerce to exist, no matter what country you’re in,” he said.

In a statement, DHL Express CEO for Sub-Saharan Africa referred to the DHL Africa eShop app as something that “provides convenience, speed, and access to connect African consumers with exciting brands.” The DHL Africa app is also intended to fill a commercial void, according to DHL, as many U.S. and UK retailers do not ship to Africa.

E-commerce ventures, particularly in Nigeria, have captured the attention of VC investors looking to tap into Africa’s growing consumer markets. McKinsey & Company projects consumer spending on the continent to reach $2.1 trillion by 2025, with African e-commerce accounting for up to 10 percent of retail sales.

As mentioned, Africa’s e-commerce startup landscape has seen its own ups and downs. Pan-African e-commerce startup Jumia’s recent IPO filing on the NYSE is a first for any startup from Africa. MallforAfrica has also continued to expand into new countries, now operating in 17, with partners, such as DHL.

On the flip side, the distressed acquisition of Nigerian e-commerce hopeful Konga.com, backed by roughly $100 million in VC, created losses for investors. And in late 2018, Nigerian online sales platform DealDey shut down.

On a B2C level, DHL Africa eShop brings distinct advantages on a transaction cost basis (i.e., the cost of delivery) given it is connected to one of the world’s logistics masters, DHL.

Another component of DHL and MallforAfrica’s partnership is the market for offering e-commerce fulfillment services through MallforAfrica’s white label Link Commerce service.

This could put the duo on a footing to compete with (or work with) big e-commerce names entering Africa and adds another layer of competition with Jumia, which offers its own fulfillment services vertical in Africa.

As for the big global names, Alibaba has talked about Africa expansion, but for the moment has not entered in full.

Amazon offers limited e-commerce sales on the continent, but more notably, has started offering AWS services in Africa.

To watch is how DHL’s new Africa eShop business factors into the continent’s online-sales landscape. It could certainly serve as a new player in African e-commerce phase 2.0, now that the sector has shaken out some failures, produced an IPO, and drawn the attention of big global names.

 

 

 

 

 

 

 

News Source = techcrunch.com

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