DHL has added a further 13 countries to its ecommerce shopping platform, Africa eShop to bring its total coverage to 34 countries. The service, which launched in April 2019 in 11 countries and increased coverage to 20 in May 2019, allows African consumers to purchase from more than 200 US and European retailers.
The new countries are: Angola, Benin, Burkina Faso, Burundi, Chad, Ethiopia, Guinea, Lesotho, Namibia, Niger, Sudan, Togo, and Zimbabwe. The service allows consumers in Africa countries buy directly from companies based in the US and Europe, and with limited/no presence in Africa.
MallforAfrica provides the white labelled retail platform, Link Commerce (Link Commerce has 250 partner retailers plugged into its platform). Partner brands for Africa eShop include Amazon, Nordstrom, Sephora, Neiman Marcus and Macy’s. The app also supports local digital payment options such as Kenya’s M-Pesa and Nigeria’s Paga.
DHL Africa eShop is also offering incentives to first time customers, offering a flat $20 shipping fee. The online retail platform’s expansion comes in sharp contrast to the failure of two high profile services in Africa: CFAO’s Africashop and Casino/Bolloré’s cDiscount.
Africa eShop has been positioned in the media as direct competitor of Jumia. We question the logic of this comparison. Jumia already has an affordability challenge that limits penetration but is using a model ultimately designed to replicate the Amazon/Alibaba model of using scale to drive down end user retail prices.
Africa eShop’s prices are 20%-50% higher than the comparable retail prices in the source retailers, meaning they are out of affordability to all but the very elite consumers. In an immature market with few large online retail players there will inevitably be similarities but the underlying business model and the operational economics are very different.