The news at the end of last year that Pernod Ricard invested in and partnered with leading African ecommerce player Jumia (sometimes referred to as the Alibaba of Africa) shows the online environment is a critical tool to reach these new consumers.
According to an UNCTAD report, there were an estimated 21m online shoppers in 2017 and the number is rising. At the end of December, Jumia is reported to have serviced 4m customers, up from 2.7m a year before. They have applied to be the first African technology company to list on the New York Stock Exchange as well.
Jumia’s on-premise delivery platform represents a valuable opportunity to increase the visibility of Pernod Ricard’s brands in pubs, bars and restaurants across Africa.
Pernod Ricard will not just benefit from access to Jumia’s off-premise customers – the retailer has an on-premise delivery platform which will now give Pernod Ricard access to around 25,000 outlets. This represents a valuable opportunity to increase the visibility of Pernod Ricard’s brands in pubs, bars and restaurants across Africa.
According to the IWSR’s market researchers, Jumia is the number one online retailer for alcoholic drinks in Nigeria, contributing to the impressive 25% year-on-year growth for online drinks sales. The investment from Pernod Ricard will help to cement this market leadership, as well as enable Jumia to establish itself more firmly into other growing markets in the region.
Pernod Ricard’s association with Jumia dates back to 2016 with a collaboration called ‘Jumia Party’, an online initiative for rapid drinks delivery in influential African cities, including Lagos, Nairobi and Accra. Since then, the company has been rapidly expanding. Out of its Nigerian headquarters, Jumia is now available in 13 African markets including Ivory Coast, Egypt, Morocco, Senegal and Tanzania.
A recent IWSR Global Strategic Study on ecommerce shows that online shopping is not as conventional in Africa as in other parts of the world. Drinkers will often look online to gauge what is available and then phone to pay, either in cash on delivery or through a bank transfer. Many consumers do not use credit cards and there is a need to build up trust in ecommerce platforms in the years ahead.
In Jumia’s base, Nigerian expats currently account for around half of the 3,000 nine-litre cases sold online annually. Currently, most sales are made up of high-end spirits or Champagne, but as the audience broadens across Africa, the market will diversify and look more like the total market. According to the IWSR, whisky and flavoured spirits each make up around a fifth of African spirits sales, with gin slightly less on 18%. Pernod Ricard’s sales have a considerable whisky bias in Africa and will see Jumia as an opportunity to promote other products in its portfolio.
In the past, Pernod Ricard has shown an enthusiasm to engage in ecommerce. In 2013 it introduced the ecommerce site Sipstor to sell its brands in the UK, and three years ago it set up a ‘pop-up’ online store to market Malibu rum merchandise and offers. Both these projects were sporadic, but today Pernod Ricard’s digital marketing strategy has become more globally coordinated with clearly defined objectives.
Intelligence will optimise Pernod Ricard’s competitiveness and the company appears to have been stockpiling knowledge and expertise in the digital and ecommerce landscape; the company now boasts of having 150 ‘digital experts’ in the company. Increasing online competence was cited as a factor last year when it bought its first online retailer, Spanish-based Uvinum. The acquisition was not just about occupying the space, but about gaining what Pernod Ricard termed “technological and ecommerce expertise”. This was evident in the detail of the Jumai agreement, in which both parties will pool their knowledge on respective areas of proficiency.
Pernod Ricard has recognised how important it is to take control of the conversation and storytelling of its brands, both online and offline.
Pernod Ricard sees the digital and ecommerce platform as a highly prized place to glean an understanding of its audience, to interact with customers, and to respond quickly to changing trends. It has recognised how important it is to take control of the conversation and storytelling of its brands, both online and offline.
Pernod Ricard has applied this thinking very effectively in one of its ‘must win’ markets, China. A partnership with Tencent Holdings has enabled it to co-create content and utilise Tencent’s data for the optimum targeting of consumers. The ‘Ask Jerry’ live chat cocktail platform demonstrated just how quickly it could implement lucrative new opportunities. The performance of Martell and Chivas Regal in China shows this digital model is reaping the rewards, making ecommerce Pernod Ricard’s fastest-growing channel in the country.
The digital space in Africa may not be as developed as China, but Pernod Ricard’s investment in Jumia indicates it is placing its bets on this emerging and important channel to help it expand brands in key markets.
For a focused ecommerce assessment for the alcoholic drinks space, see the IWSR Global Ecommerce Strategic Study.
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