UPS partners Jumia to boost e-Commerce in Africa

Global shipping and logistics company, United Parcel Services Inc. (UPS) and pan-African e-commerce firm, Jumia have announced a partnership to help transform the African e-commerce ecosystem.    

This has been argued to be a significant step for the online retail business in Africa, as the market is projected to reach $180 billion in trade by 2025.

Notably, industry watchers, players and enthusiasts haven’t stopped commending the development since it made the headlines. The partnership could go on to play a crucial role in helping Africa reach the $180 billion trade goal. 

What the partnership aims to achieve

UPS is seeking to deepen its presence and sustain its long-standing culture of offering seamless delivery service to Africans. The heritage company seems ready for the job, with the collaboration starting off in three regions on the continent – Nigeria (West Africa), Kenya (East Africa) and Morocco (North Africa). 

There’s more in the works. The partners (UPS and Jumia) are planning to take the collaboration to Ghana, Ivory Coast and other countries where Jumia has established a presence in the last seven years.

While both companies didn’t provide the financial terms of the deal, the move has started paying off. Per Bloomberg, the American depository receipts of Jumia jumped to 30% on the New York Stock Exchange. The rise helped Jumia become a $1.2 billion company from $934.6 million on Friday.

Helping small businesses grow 

Small and medium-sized businesses, a group making up 90 per cent of businesses on the continent, require delivery and logistics services to deliver value, grow and break even. 

The UPS-Jumia partnership ticks all of these boxes for small and medium-sized businesses. 

“This partnership will help small and medium-sized businesses in Africa that make up 90 per cent of all businesses on the continent and are the backbone of the economy.

“UPS’ asset-light approach, like the Jumia partnership, offers a pathway for businesses to quickly and reliably connect to new customers around the world through our global network, potentially accelerating their revenue growth,” said Gregory Goba Ble, Vice President of Engineering and Operations for the Indian subcontinent, Middle East and Africa, UPS.

Aggregating strength

The UPS-Jumia partnership is built on strength. Both organisations are powerful logistics and e-commerce brands, respectively. UPS’ network cuts across 220 countries and territories, helping users deliver their packages. For Jumia, the brand’s footprint is unmissable in 11 African countries.

UPS and Jumia are pulling strength together to deliver cost-effective and quality service to users and address infrastructural challenges that affect last-mile solutions with a robust network, backed by the partnership.  

“With Jumia’s logistics business, we have managed to build up a fleet and delivery network on the continent that holds some value for an international courier giant like UPS,” senior vice president of logistics at UPS, Apoorva Kumar said.

UPS and Jumia remain in discussions about plans such as a rollout of co-branded pick-up stations, they said.

The African user is the biggest winner of this collaboration story. With the partnership, UPS and Jumia are expanding delivery solutions, from package delivery to payment options.