With its low-cost, direct-from-manufacturer model, Chinese e-commerce giant Temu has entered the Nigerian market, challenging local players such as Jumia, Konga, and Jiji.
Analysts predict this increased competition will benefit Nigerian consumers through lower prices and a broader range of produzcts.
Launched in 2022 by PDD Holdings, the parent company of Chinese e-commerce platform Pinduoduo, Temu built its reputation on offering low-cost products shipped directly from suppliers.
The platform reportedly spent about $2bn on Facebook and Instagram ads last year, according to The Wall Street Journal, underscoring its aggressive push to capture market share.
The company’s recent arrival in Africa’s most populous nation is expected to intensify competition in a market projected to grow from $12bn in 2019 to $75bn by 2025, according to the US International Trade Administration.
Jumia, often regarded as the industry leader in Africa, has faced mounting challenges, including a 13 per cent year-over-year revenue decline for Q3 2024 and a stagnant customer base of 2 million users since 2023.
Professor and Investor at Tekedia Capital, Ndubuisi Ekekwe, believes that Temu’s arrival signals a new era for the sector.
“In six months, the largest consumer e-commerce company in Nigeria will be Temu if they use the same playbook they applied in the United States,” Ekekwe said in a LinkedIn post. “Jumia, Jiji, and Konga will have to upgrade their playbooks to stay competitive.”
Analysts predict that increased competition will benefit Nigerian consumers by offering lower prices and a broader range of products.
“Temu’s entry could really shake things up and push local players to step up their game,” said human resources consultant Obaro Aziza. “If they can navigate Nigeria’s logistics challenges, this could be a huge win for both the market and customers.”
On the other hand, the Corporate Relations Manager at AfriCred, Gloria Otti, expressed concern about the broader economic implications.
“The economic advantage of this for Nigeria? Not so sure,” Otti said. “Production is done outside, and it only means more FX spending. While Temu’s entry might push competitors to do better, it’s not necessarily a win for the local economy.”
Otti also called for more robust regulation to protect local businesses. “There are better ways to get competitors to improve—having highly functional regulatory bodies, for one,” she added.
Nigeria’s infrastructure and logistics challenges may complicate Temu’s operations. However, Ekekwe suggested the company could invest in local delivery firms to overcome these issues.
“This could encourage local startups to scale and innovate,” he said. “Temu’s entry may not only disrupt e-commerce but also share its DNA with Nigeria’s ecosystem on how to dream big and scale companies.”