E-commerce has long promised convenience, accessibility, and the transformation of shopping habits across the globe. Yet, for many rural and underserved regions, the barriers to fully embracing online shopping have remained high. These challenges—particularly in Africa—include poor infrastructure, high transportation costs, and limited delivery networks.
However, e-commerce companies are now tapping into a solution that could change the game: pickup stations.
Jumia, often dubbed the “Amazon of Africa,” is tweaking its strategy in a significant way. After years of focusing on major cities, the e-commerce giant is going brick-and-mortar and targeting rural markets with pickup points, a move designed to reduce delivery costs and bring underserved populations into its fold. As Jumia faces rising competition (from rival e-tailers and social commerce) and economic pressures, this approach reflects its push to find new growth avenues and get closer to long-elusive profitability.
Pickup stations have become a crucial enabler for expanding e-commerce into rural and semi-urban areas, providing a practical solution to the last-mile delivery problem. Companies like Jumia are embracing this shift, embracing pickup stations to expand their reach while reducing delivery costs and enhancing accessibility.
Overcoming Infrastructure Gaps with Pickup Stations
In Africa’s rural markets, smaller e-commerce players like Copia Global found significant success using pickup points and agent-led models, though Copia ground to a halt earlier this year amid financial struggles. Other players, such as Kapu and Tusho, with USD 11 M raised between them in 2022, rely on similar models that involve local agents to serve hard-to-reach areas. Jumia is betting that its existing infrastructure and agent network will give it an edge in expanding these rural efforts across its remaining nine markets.
For e-commerce companies, reaching customers in rural areas has always posed a logistical challenge. The lack of well-maintained roads and delivery networks makes traditional door-to-door delivery inefficient and expensive. But pickup stations offer a smart workaround. These hubs allow customers to collect their orders from central locations, cutting down on the costly last-mile delivery process.
Jumia is doubling down on this strategy. Through its City Expansion initiative, the company has deployed pickup stations in remote areas, allowing it to reach more customers without the need for extensive delivery routes. This strategy has proven effective, especially in countries like Uganda, where Jumia says it has established 99 pickup stations across 25 cities. In rural regions like Gulu, Arua, and Jinja, the impact is already visible, with 24% of deliveries now happening in remote areas, and 15% in secondary cities.
Making E-commerce More Affordable
Traditionally, the high cost of delivery has been a major deterrent for rural shoppers, often making it prohibitively expensive for them to order products online. By consolidating deliveries to central points, pickup stations significantly cut transportation costs.
This model benefits both the company and the customer. Francis Dufay, CEO of Jumia, emphasised that pickup stations allow the company to pass on savings to consumers. “We can offer competitive delivery options without the need for complex last-mile logistics,” Dufay explained. Customers in rural and semi-urban areas can now access a wider range of goods at lower prices, making e-commerce not only accessible but also cost-effective.
In addition to affordability, pickup stations also open the door for promotions and discounts that would otherwise be unfeasible in regions with high delivery costs. For many rural consumers, this shift makes online shopping a viable alternative to traditional retail for the first time.
Boosting Local Economies and Building Trust
The benefits of pickup station model extend beyond cost savings and infrastructure improvements. By partnering with local businesses to serve as pickup locations, the service is helping to boost local economies. For example, Idrees Luqman Akorede, CEO of Elhay Services in Ogun State, Nigeria, transformed his shop into a Jumia pickup station. As a result, he saw a significant increase in foot traffic, boosting his business revenue.
Similarly, Adeniji Ademola Ayobami, CEO of Cart-zone Deliveries in Oyo State, earns a commission on every package picked up from his store. In addition to the financial benefits, Ayobami noted that these partnerships are changing the perception of online shopping in rural areas. Pickup stations offer a tangible, accessible link between the digital economy and customers who may have been wary of e-commerce due to concerns about delivery reliability.
In places like Modakeke, where internet connectivity has been a barrier to e-commerce adoption, pickup stations provide a secure and convenient solution. Customers can now engage with online shopping platforms without the fear of delayed or lost deliveries, thanks to the centralised nature of these hubs.
A Broader Push into Rural Markets
Jumia’s pivot towards rural and peri-urban markets is part of a larger strategy aimed at maximizing marginal gains in the quest for profitability. The company has struggled to achieve profitability since its 2019 IPO, facing stiff competition and rising operational costs. To address these challenges, Jumia has doubled down on reducing costs and expanding into less saturated markets.
Beyond Uganda, Jumia’s expansion into smaller towns and rural areas has extended to other African countries like Ivory Coast and Senegal, where the company is targeting high-growth regions through partnerships with international retailers like Leroy Merlin. During the pilot phase of this partnership, 40% of the Leroy Merlin products sold on Jumia’s platform in Francophone countries were purchased by buyers outside the capital cities, demonstrating strong demand in rural areas.
This strategy, however, isn’t without complications. Cases like Copia Global, which had gained traction focusing on unlocking e-commerce for rural consumers using a similar agent-led model before stuttering, are a cautionary tale. Still, Jumia’s broader footprint and pickup station network could provide it with an advantage in scaling this approach across multiple markets.
Trimming the Fat: Exiting Low-Growth Markets
As Jumia pushes further into rural markets, it is also streamlining its operations in less profitable regions. The company recently announced plans to exit South Africa and Tunisia by the end of 2024, following earlier pull-outs from Cameroon and Tanzania. These decisions are part of Jumia’s broader effort to cut costs and focus on markets with higher growth potential, such as Nigeria, Egypt, and Kenya.
South Africa, in particular, became an increasingly difficult market after Amazon launched its local operations in May 2024, adding pressure to local e-commerce players like Zando, Jumia’s fashion platform. Tunisia, on the other hand, struggled with low growth and challenging macroeconomic conditions, contributing just 2.7% of Jumia’s total orders in 2024. “The trajectory of these countries did not align with the strategy of the group,” Dufay remarked, signalling Jumia’s intent to focus its resources where the potential for profitability is higher.
Jumia’s shift towards pickup stations and rural markets represents a bold pivot in its quest for profitability. As it continues to refine this model and expand its footprint, Jumia hopes to turn these marginal gains into a sustainable path to profitability—one pickup station at a time.
