E-commerce company, Jumia, is now using German logistics company DHL and Dubai-based Aramex for its deliveries in Uganda. This brings its number of 3PLs, Third-party Logistics, to three. Including the already existing Pink Tie.
Until recently, little-known about logistics company, Pink Tie, handled Jumia's deliveries. The company also handles deliveries for Kilimall, Jumia Food, Jumia Party, Jumia, KFC and Pizza Hut in Uganda. That's according to a conversation I had with Jay Cho, MD of Motorcity, the company that owns Pink Tie.
In its initial stages, Jumia Uganda worked with Amari Couriers and Makizto. But, they dropped both for lack of consistency in service quality. Something that was reflecting badly on Jumia's services.
According to a trusted source, Jumia received a lot of orders on Black Friday last year. Yet Pink Tie couldn't fulfil all. Something that resulted in many failed orders. This could be one of the reasons they are bringing Aramex and DHL on board.
However, Jay refuted this. Saying that the two companies are still having the same relationship. Only that it is a "different contract" where he'll "provide drivers on hire." Under the new contract, Pink Tie "will provide ten motorcycle drivers and one truck Driver" per day. He called it a "better deal for me."
Yet beyond that, Jumia could be looking to foster more trust among its users. Given the reputation and respect, the two newly added logistics companies command in Uganda.
I had a phone call with Ham Namakajjo, Jumia Uganda's Country Manager. He confirmed that it is true, the company has started using DHL and Aramex for deliveries on top of Pink Tie.
"We are just adding the number of delivery 3PLs we use," Ham said. Re-affirming that "Pink Tie is still very much our [delivery] partner."
Recently, Kilimall outsourced its Ugandan business to Jay's company. Implying that he controls Kilimall Uganda. A direct competitor to Jumia. When asked whether the decision was because of Pink Tie having ties with Kilimall, both said no.
Ham said that "delivery 3pls work for multiple clients." Maintaining that the decision was as a result of growth in order volume. "We want to make sure we cover the country very well," Ham said. Jay also added that Jumia has "always used another company for upcountry deliveries."
According to Ham, Jumia "experienced tremendous growth after Black Friday last year." And he is not looking to take any chances ahead of the looming mobile week.
"Generally we monitor our delivery success rate," he said. Adding that the decision was "driven by coverage."
"You want to be able to get upcountry or handle all sizes of packages."
Though cagey about exact figures, Ham projects the company to grow 4x this year. "We plan to grow about 4x this year," he said. "That's some crazy growth. You can't do business as usual."
The company has also made some of its products in Uganda available on Express service. Jumia Express, Ham says, will be a 2 days delivery service. "There are some things on Jumia express already that can be got within 2 days. But we're making it 24hrs for Mobile Week," Ham said.
Jumia Group has an in-house delivery service company called Jumia Services. This works with partners in each market Jumia operates.
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In Nigeria, Jumia Group's leading market, its website says that it already works with DHL. Others include UPS, Zippy, Trolog, Courier Plus and Exponential. In Kenya, the biggest market in East Africa, the company uses Aramex, Posta, Wells Fargo and G4S.
Mid last year, there were talks of Jumia Uganda partnering with Posta Uganda to smoothen upcountry deliveries. When asked, Ham said he "can't comment about plans in the pipeline. Adding that "we are always working to optimize [our deliveries]."
Recently, Jumia said it had "reached the threshold of 1 billion visits across Africa in 2017." Other groundbreaking figures for 2017 included the number of products available on the platform. This they say "skyrocketed from 50,000 in 2012 to 5 million this year [2017]."