Counterfeit products – a worldwide epidemic

On the jump - dealers in counterfeit goods are bitten off ... unsplash-logoTobias Tullius

The African online company Jumia is fighting against the worldwide epidemic of counterfeit products – and is making more sales.

Jumia shows that the e-commerce business is global. Founded in 2012, its market capitalization has meanwhile been estimated at USD 1 billion. The African counterpart to Amazon is online in 13 African countries. Among the companies involved are Rocket Internet, Goldman Sachs and Axa. Rocket Internet has holdings in various promising tech start-ups and is located in Berlin. Perhaps one reason why Jumia also pays taxes in Berlin, too. The developers of Jumia are located in Portugal and the head office is indicated as Dubai. Really international, this Jumia business.

But the management is struggling with an even more international problem. The portal is full of suppliers of counterfeit goods. The measures that Sam Chappatte, the company’s CEO, has now proudly announced show that the fight against it is also worthwhile in terms of his own sales. According to the report, Jumia has banned hundreds of traders from the portal who are said to be involved in the trade with counterfeit products. Chappatte emphasized to “Business Daily Africa” that this step was worthwhile: “Delisting bad vendors has improved our sales by 50 per cent. Product quality and customer feedback as well as vendor behaviour inform our business strategy.

Jumia will continue to use this procedure. Suspected companies will initially be fined with a penalty of the equivalent of 225 euros.

The work on the company’s reputation should be worthwhile. Just a few days ago, the company announced that it wants to open the platform to third-party providers. However, these will only come if the platform offers a trustworthy basis. A circumstance from which many shopping platforms suffer. In recent years, they have increasingly become marketplaces where, due to inadequate quality standards for the admission of merchants, more and more fake products and fake shops have appeared.

The case of Jumia shows that it can be done differently. Quality, even in shopping platforms, will prevail. We will see when also ebay, Amazon and Co. will realize this and their measures against product piracy will not remain lip service (EurObsIT reported).