Ben Uzor Jr
There is a flurry of activities in Nigeria's online retail
and online music markets respectively in the mould of new investment drive,
strategic partnerships, all geared towards taking advantage of the country's budding
middle class and massive online population. Currently, Nigeria has the highest
online population in Africa with 45 million Internet users. Benuzorreports learnt that J.P Morgan Asset Management had made robust investment in one of
Nigeria and Africa’s fastest growing electronic commerce retailers, Jumia. As at the time of filing this report Business
Day could not get Jumia or J.P Morgan to put a figure to the actual deal but
the investment is believed to be in the double-digit million dollar range.
Besides, J.P Morgan is a global company which has assets under supervision of
approximately $2.0 trillion and assets under management of $1.3 trillion as of
June 30, 2012.
It was gathered that JP Morgan would take a substantial
stake through a German holding company in an all cash-for-equity investment. Jumia
was launched with the support of Rocket Internet – the European incubator of internet
start-ups. Elsewhere, less than a year
after French-based online music streaming service, Deezer first announced that
it would launch in Africa, the service is now officially available in Nigeria. Earlier
this year, in June, the service was first launched in two African countries –
Mauritius and Ivory Coast — via the Orange mobile network. In Nigeria however,
Deezer is offering themed and artist-based radio channels and access to music
on demand in 30-sec clips. Benuzorreports checks reveal that that the French online
firm is keenly working on forging strategic partnerships with telcos notably
MTN, Etisalat and device manufacturers such as Nokia, Samsung to further deepen
the scope of the market.
This year, Deezer raised $130 million in a round led by
Warner Music Group owner Access Industries. As it is, subscribers will now be
able to stream unlimited Nigerian music for free as the music service firm currently
offers Nigerian music on its platform from artists such as P-square and 2Face.
The firm was initially launched in France in August 2007, Belgium and the United
Kingdom (UK), and now has over 20 million users, with 6 million unique visitors
per month. But Deezer is not coming into a virgin business landscape. Market
watchers told Benuzorreports that it would have to compete in an
already brewing online digital music war. According to the market watchers, the
French music streaming service will have to do battle with local music services
such as iROKING and Spinlet as they jostle to provide the best-in-class digital
music content and social features for Nigerian consumers and subscribers.
Tunde Kehinde and Raphael Afaedor, co-founders and
joint-chief executive officers (CEOs) of Jumia, in a statement said: “This investment is a real turning point for
Jumia, and electronic commerce in Nigeria. “With this investment, we will strengthen our current footprint, offering
our customers more brands, more categories and more services as well as
improving operations; we are among the pioneers of e-commerce in Nigeria and this investment confirms that Nigeria
will become a very large market in the very
near future.” Speaking in the same vein, Robert Cousin, J.P. Morgan
Asset Management Portfolio Manager, who worked on the deal from New York,
commented further saying, “We are really excited to partner with Jumia as it
continue to expand their electronic commerce presence in Africa.”
For many analysts and market watchers, the steady growth
of the formal retail sector in Nigeria, along with growing number of internet
users in the country, is indeed driving the expansion of online retailing. By
global standards, the electronic commerce market in Nigeria is still undersized,
but figures of online sales have shown a steady increase over the last five
years, as the one-time nervousness of Nigerian shoppers takes a backseat and a
growing number of techno savvy consumers turn to the cyberspace for retail
therapy and bargain hunting. This retail trend, according to a recent report by
Euromonitor International, a global market research organisation, recorded a 25
percent growth in 2011 valued at N62.4billion, which is an additional N12.5 billion
to the N49.9 billion recorded in 2010.
Pushing this retail segment most is online retailing,
which recorded 25 percent growth during the period under review, while other
non-store methods like direct selling and vending trailed behind. Jumia was
launched earlier this year and offers a wide range of general merchandise
categories such as fashion apparel, shoes, electronics, mobile phones, books,
toys, beauty products and many more categories. The firm currently operates in
Nigeria, Egypt and Morocco, with plan to expand in additional countries in the
coming months. On the other hand, Deezer is offering a 15-day Free Trial to try
out its premium services, an unlimited access to the firms’ catalogue in
enhanced sound quality using a computer, as well as access to exclusive content
and recommendations with the ability to unsubscribe during the 15 days.
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