From an early age, he always had a dream of one day running a business in Africa. And so strong was the feeling that when he turned 18, he’d to share it with his wife (who he’s been friends with since they were 15), telling her that they need to come to Africa and help build businesses. And to paraphrase Paulo Coelho who said that “when you really want something, all of the universe always conspires to help you achieve it”, his wish was granted in early 2015 when he’s appointed the Country Manager of Jumia in Ghana. From here, he’s then promoted to lead the brand’s entry and expansion into six new markets before assuming his current role as the MD of Jumia Kenya. Having been in Africa (and with Jumia) for almost 4 years now, 2 of which have been spent in Kenya, we recently sat down with Sam Chappatte (pictured above) to share highlights of his career journey in Africa as well as insights on the development and growth of the e-commerce industry in the continent. Here are excerpts…
QUESTION: Give us an introduction about yourself
SAM CHAPPATTE: My name is Sam, I have Swiss and British heritage, and the managing director of Jumia in Kenya. I have been with Jumia now for over three and a half years. I started my work at Jumia in Ghana then grew quite quickly to lead the expansion of Jumia into new markets. Two years ago, I moved to Kenya to lead the operations here where we live together with my wife who’s an entrepreneur involved in the food and beverage industry.
Q: You worked at Boston Consulting Group, and helped clients from Retail, Consumer Goods, TMT, Mining and Private Equity address ‘big problems’. How did this previous experience help you when you joined Jumia?
SC: Yes, I started my career at the Boston Consulting Group and worked across a number of different industries dealing mainly with retail and consumer goods in many different markets including a few projects in Southern Africa. And I can say that those experiences have helped me a lot because one of the reasons why I went into consulting is because it helps you learn how to structure and approach problems – that’s basically thinking how to go about getting the best solution(s) to a problem. Being a consultant means helping clients address their problems and this experience is crucial as the lessons learnt during this phase later help you solve such issues while you’re running your own business. Remember we’re running quite a complex business here at Jumia and that experience is very useful.
Q: You started out as the MD of Jumia in Ghana. You later on took up an expanded portfolio, which apart from Ghana, also included such markets as Cameroon, Senegal, Algeria, Tanzania and Uganda. Which lessons did you learn in these six markets?
SC: I learnt a lot of stuff in my first leadership role at Jumia. I started out by directly managing the Ghana business which was really really early stage and in a period of 3 to 4 months, we had grown by 5 times in terms of volumes. It was a good opportunity to learn both the business and the Ghanaian market. It was also exciting in that it gave an opportunity to learn each and every function at Jumia because when you’re a small business you try to do everything – from commercial to legal issues to logistics to marketing to finance and HR – because you’ve to be hands on. The second thing that I appreciate is getting the exposure to all the different markets because since I was 18 I’ve always wanted to run businesses in Africa. And I’ve gone out with my wife since we’re 15 and from the time we reached 18 I’ve always told her that we need to go to Africa and help build businesses. Again, I spent at least 3 weeks out of 4 on planes visiting different markets across the continent, holding meetings with teams from different countries and strategizing on how to grow the markets through partnerships with vendors. There are so many lessons we’ve come to learn as we try and test a lot of things in different markets, adopting what’s worked while dropping what wasn’t successful. The cross market experience is also very useful when it comes to discussions here in Kenya and when working with clients and vendors as many are keen to learn more about what’s happening in other markets which can be replicated here.
Q: As a follow-up to the above question, how is the Kenyan e-retail market different from the other six markets which you handled previously, that is Ghana, Cameroon, Senegal, Algeria, Tanzania and Uganda?
SC: Broadly speaking, I think the markets are more similar that they’re different. There are obviously differences across the markets but most people in these countries items from informal channels meaning that formal trade in these markets is relatively small, and in fact very small in some markets. For example, the penetration of formal retail in Kenya is about 30 per cent while in Nigeria and Ivory Coast it stands at less than 5 per cent. So that’s a difference but the similarity here is that informal retail is still significant while e-commerce is quite a new trend in each of these markets. Customers in all the markets still want good quality products at cheaper prices in all these markets and all the markets have problems with traffic and addresses which is a similarity. The only major difference is the cultural and linguistic variations among the populations in these markets as well as differences in supply perspective as different markets are at different levels when it comes to maturity of industry. For instance, West Africa – that is Ghana, Nigeria and Cameroon – are known when it comes to the manufacture of fashion items unlike Kenya which is quite weak in this area.
Q: Are all the markets you’ve been to and worked in regulated or self-regulating? Is there any that is making progress in terms of regulations for e-commerce industry?
SC: I think everyone is now excited and thinking more about how to support the growth of the e-commerce industry because more and more people are confident that e-commerce will create a lot of jobs. All the markets are thinking about how to support all the SMEs that are engaged in e-commerce. So far, no market or country has made any concrete steps that I can think of in terms of legal framework for self-regulation.
Q: What can you highlight as some of your greatest challenges during your now almost 4-year stint at Jumia? How did you address the challenges?
SC: They’ve been quite a number of challenges – what we’re trying to do is quite difficult as we’re trying to develop a new industry, creating the digital roads for e-commerce across the continent. Difficult because we need to create marketplaces and marketplaces are chicken and eggs – you need to have vendors and assortment of goods to attract customers and on the other hand, you also need to have customers for vendors to be interested in working with you. Which therefore means that you have to ensure that you hack your way across both at the same time to be successful, something that’s not very easy to do. In the new and expansion markets that I managed before, my main challenge was trying to hack our way into the customer side by doing smart cheap customer acquisition and PR and marketing events while on the vendor side, we focused on convincing big brands and SMEs to embrace e-commerce even though it’s still at infancy in terms of volumes. Our pitch involved convincing them that we could help them get into e-commerce then and learn the ropes early before it gets big. However, in Kenya it’s different as the industry is bigger and much more established. Our challenges here are also different, and mainly involves how to get the right people to do the right job, what our priorities are as relates to what we’re going to invest in but at the same time, it still involves how to build and grow the marketplace by working with big and established brands and how to educate the masses to buy items online.
Q: And what have been your most proud moments and successes at Jumia, with specific reference to Kenya where you’ve been for the last two years?
SC: The first is that we’ve built a solid team in Kenya, we have people who know what they’re doing and who believe in our mission to make life easier through the internet. The second is that we’ve made remarkable progress with the quality of service we provide though there are still some areas where we can improve as always. But overall, I believe we’re very consistent. For example, on Jumia Express which handles orders which we deliver the next day within Nairobi, our delivery speeds have got better as well as the vendor experience. I’m also very proud that we’ve significantly grown our marketplace – we now have 5 times more vendors on the platform than when we started, 25 times more choice for the customers and 1.2 million products today compared to just 30,000 which we had on the platform about 2 years ago. And most recently, the most exciting thing for me has been the innovations which we’ve introduced into the market, the main one here being the Offline Stores which haven’t been tried out anywhere else in Africa in the past by any e-commerce players, either new or established.
Q: From the lessons learnt and experiences gained while here, what are some of the key challenges in Africa’s e-retail industry and how can these be addressed to ensure that more and more people embrace online buying?
SC: The biggest challenge we’re facing, and for that matter our greatest competitor, still remains offline retail. And in this regard, our biggest task is to convince more and more Kenyans to come online and buy online – more so because they’ll get better prices, wider variety of products and also save on time.
Q: Give us an update on the 2018 Mobile Week promo in terms of visits to the platform and overall sales
SC: Mobile Week was very big. Actually, it’s the same size as the first week of Black Friday last year. We had between 5 and 6 million people on the website and we hit our targets very comfortably. Again, the exciting thing about Mobile Week is that it helps put affordable smartphones into peoples’ hands, and affordable smartphones give people access to the internet which’s what promo is all about.
Q: What can those who make purchases via Jumia expect in terms of promos and innovations going forward?
SC: We’ve just had a huge household campaign, #JazaNyumbaNaJumia, which was meant to show people that they can furnish their entire homes from Jumia. Coming up is a another campaign for TV sets just before the 2018 World Cup called TV Mania in May. Then we will follow this up with the Jumia anniversary in July. We have recently reduced the freight costs on various categories to just Kshs 100 (from the previous Kshs 250) for deliveries within Nairobi, mainly on groceries and food items which customers buy regularly. Overall, what customers can always expect from Jumia is faster delivery, increased variety of products as well as expansion to other towns.
Q: Give us a comment on the firm’s recent financial results as it relates to the performance of Jumia affiliates in Africa and Kenya
SC: If you look at our sales figures for last year versus the year before as a group, we’ve grown by 80 per cent year-on-year, meaning that we’re growing quite fast. We’ve created a huge opportunity for vendors and brands to sell online while e-commerce is becoming a service that people are increasingly becoming receptive to use on a daily basis. If you look at other e-commerce service providers globally, you’ll realize that they didn’t become profitable overnight – Amazon for example took 20 years before it reported a profit while the Indian e-retailers which were founded earlier before Jumia are yet to post any profits. So it’s safe to say that it’s going to take us another 10 to 15 years before we can post a profit but the important thing to remember is that we’re growing and that we’re along that path. At the moment, it’s like we’re building a road, a kind of digital infrastructure for e-commerce, so we’re not making money. But soon, we’ll start charging toll fees on the road and begin making money.
Q: When will those who use the platform in Kenya be able to make payments via JumiaPay and what advantages (or benefits) does it accord users?
SC: JumiaPay will be available locally in a couple of months. What’s interesting is that it comes as part of the JumiaOne app which makes it easier for customers to make payments on the Jumia platform, whether from mobile money or card, thereby making it easier for people to shop online. It’s also going to make it possible for different banks to offer different opportunities for different customers.
Q: How is JumiaOne unique (or different) from the current Jumia app and when will it be available for use locally?
SC: JumiaOne is different from the normal Jumia app in that it has a bunch of different services embedded in it that Jumia doesn’t have at the moment. It will also allow people to access and use all the different Jumia services from the same app.
Q: What are your thoughts and comments about new firms getting into the e-retail industry? Do you feel the market will be saturated or the cake is big enough to be shared by each and every one getting into the scene?
SC: First thing is that it’s really healthy to have a thriving e-commerce industry and that we’ve other big players with deep pockets that want to invest in e-commerce to support the industry. Having many players is good because it helps in educating customers and the more people that are spending money on educating people on how to buy online the better. The market is by no means saturated, we’re just at the beginning of e-commerce. The only thing that we’re about is the growth, that is growing the e-commerce pie. We’re not worried about the share of the e-commerce pie, because at the end of the day, it still boils down to the quality of service offered to customers and the kind of relationships built with vendors.
Q: Away from Jumia, do you harbor plans to invest in (or help nurture) startups in the e-commerce space in future?
SC: My plan is to help build the e-commerce industry in Kenya for as long as I can. However, there’s still a lot to learn and a lot to prove.
Q: In your professional life, who do you always look up to for inspiration and motivation?
SC: I read quite a lot – mostly about other companies, other entrepreneurs, and other ideas – to learn what’s changing and what’s happening and exciting around the world. Most recently, the idea that I’ve been thinking about is what’s called ‘Deep Work’. It’s written by an American professor and it’s all about the fact that your aim should not be being ‘busy’ but how to create time to think deeply for extended periods of time about the most important topics and projects. It also deals with how to try and be Spartan with your time allocation so that you really focus on the most important topics and not get distracted by trivial stuff like social media posts, notifications or your phone. It’s good challenge and I’m really thinking of how I can use it myself in order to be more productive and impactful and eventually share the lessons I’ve learnt with my team. So like I said, I read quite a lot and that’s my main source of inspiration. I’d like to read more, but I currently read probably a book a month and listen to another audio book during the same month.
Q: Any final comments?
SC: The opportunity for us in Kenya is very big and that’s why I’m so optimistic and excited that we have to do it here, both in my professional and personal life.