Making B2B e-commerce work in Africa: Jumia’s JForce offering B2B solutions
Jforce is a programme run by Jumia, the largest Africa online marketplace, which consists of a network of independent sales consultants paid on commission, who work both with client companies and assist customers to place orders on the company’s e-commerce platform. In Kenya, the number of Jforce sales consultants exceeds 20,000.
The programme aims to overcome some of the main challenges for African e-commerce: lack of internet access, know-how to place orders and trust to buy online. The JForce programme supports small African firms to promote their goods and offers employment opportunities. Jumia’s well-known brand offers a reassurance to customers.
How Jforce works
Jforce works through negotiating bulk commissions with client companies: the sales representatives are paid on commission and work both with the clients and assist customers in making their purchases. Three different sales channels are addressed:
- B2C: Jforce consultants place orders on behalf of individual customers;
- B2B: Jforce consultants focus on selling to businesses – which can vary from small street kiosks to corporates, including wholesalers;
- Jforce also offers “Offline Stores and activations”, through a network of 30 physical stores, and pop-up locations (such as a tent located at a trade show with brand displays and sales agents).
All sellers registered on Jumia marketplace are eligible to sell through JForce. These sellers already have required documents (that is business incorporation certificate, VAT certificates and verified payment information such as bank accounts, M-pesa till numbers.) submitted to Jumia when they first register as vendors. A precondition of selling through B2B channels is that the client company has to carefully work out its pricing strategy: offering appropriate discounts in relation to its retail pricing.
Challenges of getting the B2B sales model to work in Africa
The JForce model has provided some major challenges to Jumia since inception. In its initial design, the remuneration model was open to manipulation: commissions were paid on orders received rather than those fulfilled and settles. This model was exploited by certain agents who arranged for false orders to be placed for which they obtained commission. Manipulated orders could be assigned to the ‘Delivery Failed’ category, to be returned to sellers. The potential for fraud had to be addressed quickly, particularly with the additional scrutiny following Jumia’s IPO on the New York Stock Exchange in mid-2019.
Jumia also found that offering sales agents basic pay plus commission on sales did not work: an important share of agents failed to make sales, and were nevertheless happy to receive the basic salary. A shift has been made to a commission-only pay model that appears to work better for the company, even if it has not been well received by the agents.
The lack of internet connectivity and regular power outages in remote areas create an additional challenge for Jumia’s sales agents to show case customers’ products online.
How JForce works
Registered sellers on JForce get a dedicated page for bulk selling, which offers them better visibility of their products compared to the crowded marketplace page. Jumia provides a range of promotional activities to and from the network of consultants through multiple channels including a newsletter and campaigns in WhatsApp and Facebook.
Sellers benefit from extensive analytical support to better target sales, and ensure better return on investment. The platform allows the selection of target market locations (e.g. Eastern Kenya) and customer characteristics and profiles, for example, ‘100 grocery shops or beauty salons around Mombasa’.
Both sellers and buyers can leverage the vast network of logistics that Jumia provides to sell their products to resellers in remote areas. The logistics network offers a reassurance of effective delivery and includes options for insuring the potential for damage in transit.
Buyers can obtain attractive pricing on bulk purchasing, without the need to purchase significant quantities. On average, the bundles offered for sale contain anywhere between 5 – 100 items of each product, giving buyers the ability to control stocks and obtain wholesale pricing.
The future of JForce
An issue common to many platforms operating in Africa is the ability to maintain and assure product and service quality, and to build trust among customers, while working in an environment where the quality of infrastructure can be low.
It is clear that this entrepreneurial business model, built on motivating an independent sales force to drive B2B sales needs further experience and fine tuning, particular in connection with building more cost effective bulk delivery solutions.
While this model is implemented in most large markets for Jumia, JForce is still missing from most other African countries. Jumia will need to evaluate carefully whether and how it will introduce the B2B JForce platform to other markets.
Stay tuned! There are more case studies coming about B2B e-commerce businesses in Africa coming on ecomConnect in the coming weeks!