When e-commerce platform Jumia, headquartered in Nigeria and with 4 million customers in 14 African countries, almost passed the US$2 billion mark on its New York Stock Exchange debut day on 12 April, it was clear that Africa\u2019s first tech unicorn was declaring itself on the world stage. Pundits have been quick to highlight the continent\u2019s rapid digital transformation and its burgeoning business market.\nHarvard Business Review Africa pointed to the \u201c122 million active users of mobile financial services, more than half the global total\u201d and predicted that the number of smartphone connections on the continent was set to double to 636 million by 2022 - twice the projected number in North America.\nJumia\u2019s success has directed attention to Africa\u2019s potential and growth. E-commerce represents less than 1 percent of all transactions done in Africa versus 12 percent in the US or 20 percent in China.\n\u201cThe adoption of e-commerce in Africa is still in progress. It takes time building consumers\u2019 trust and to show all the opportunities of e-commerce; this is normal,\u201d Abdesslam Benzitouni, group head of communication & public relations at Jumia, said.\nE-commerce emerges as necessity in Africa\nIn Europe and in the US, e-commerce is often a luxury or comfort. In Africa, it is starting to become a necessity or a reliable solution to overcome the existing challenges, Benzitouni believes.\n\u201cThere is one store for every 67,000 people on the mainland versus one for every 1,000 in the United States," Benzitouni said. "And then you have to add the congestion and deficit of infrastructures, which complicate the daily life of many Africans. We believe that e-commerce is a solution for the future.\u201d\nAfrica cannot be treated as one country, however, so any analysis of the impact of something like Jumia\u2019s tech unicorn status needs to be tempered with an understanding that technology adoption varies greatly in each of the 54 countries on the continent, said Rahiel Nasir, analyst, datacentres and services EMEA, at 451 Research.\nHe also points to the greatly varying infrastructure across the region, adding that while Africa is seen as being mobile-first, there are still challenges to delivering in rural and remote areas.\n\u201cNetwork roll-outs to isolated communities are hard to justify to shareholders when they do not present the high enough returns needed to warrant an investment," Nasir said. "A lack of other resources in remote and rural regions, such as fibre, electricity, transportation, and so on, not to mention tough terrain and harsh climatic conditions, add further challenges,\u201d he explained.\nAnd the challenge remains, even if the region\u2019s operators and service providers are successful in connecting all of the unconnected with mobile broadband networks, how will they access and take advantage of them?\n\u201cTo put a smartphone in most people\u2019s hands across the continent, devices need to be ultra-low cost to be affordable, and then you need to consider what they will do with those devices if they cannot access locally relevant content that is delivered via service providers using local data centres to reduce latency and transmission costs,\u201d Nasir explained.\nOtherwise, online shopping in Africa comes with a unique\u00a0set of\u00a0challenges\u00a0as e-commerce is still nascent, said Efosa Ojomo, co-author of \u201cThe Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty,\u201d and global prosperity research lead at the Clayton Christensen Institute.\n\u201cMany customers are wary of paying online, to which Jumia has responded with payment-on-delivery," Ojomo said. "And though Jumia\u2019s target market is enormous - approximately 700 million people live in the 14 countries where Jumia operates - many of these potential customers lack data connections and live in extreme poverty.\u201d\nTo reach as many people as possible under these conditions, Jumia does more than just e-commerce. The tech company also offers a travel website, a food delivery service, and more.\nBenzitouni believes that Jumia, being the first African unicorn, highlights the\u00a0 innovation and dynamism of Africa and the opportunities of the continent.\nWith over 15 million small and medium-sized enterprises (SMEs) and merchants in Africa, and a \u20ac1.4 trillion consumer market opportunity, there is massive room for growth in e-commerce in the continent, Benzitouni said. \u201cIt shows to the international investors that they can invest and believe in Africa.\u201d\nBenzitouni said that they are convinced that Jumia remains increasingly relevant for consumers and sellers in Africa, with a focus on long-term profitability through continuing investment in infrastructure (warehouse, logistics), marketing and management.\nCritics question Jumia's African roots\nJumia\u2019s initial public offering (IPO) was met with mixed reactions among African entrepreneurs, said Ayo Sopitan, director at Essentia Advisory Partners and partner at Curo Capital, an Africa-focused investment club.\n\u201cDetractors questioned whether Jumia was a truly African story given its European origins. Supporters countered with the fact that Jumia attained unicorn status doing business in Africa, with Africans and for Africans,\u201d he explained.\nWhat cannot be denied is that Jumia is a sign of what is possible in Africa, Sopitan said. \u201cThere is a wave of African unicorns coming behind Jumia, powered largely by the will and creativity of the founders across the continent as well as by the foresight of some investors in the West,\u201d he said.\nIn order to capitalise on this, African governments need to implement policies that encourage innovation. In August, the Nigerian government proposed a 5 percent online sales tax. "This is the opposite of the types of policies needed to encourage growth in the tech sector where adoption has been on the rise,\u201d Sopitan said.\nIn addition, education policy to ensure that science, technology, engineering, and mathematics (STEM) education is well funded, policies around foreign direct investment and capital repatriation also need to be revisited, Sopitan believes. \u201cThis way, a highly educated workforce can attract investment capital from home and abroad to build technologies that can be used by Africans without friction from tax authorities,\u201d he said.\nIt is time also for local investors to start supporting African startups. Already there is growing interest, with a joint report by GMSA Ecosystem Accelerator Programme and Briter Bridges noting that there are now more than 600 active tech hubs on the continent.\nDespite this, foreign benefit from local development remains a concern. \u201cJumia's IPO exit will enrich mostly people who are not on the continent. Yes, Africa keeps the jobs but the wealth creation effect of Jumia's success is mostly going to be lost to Europe and other parts of the world,\u201d Sopitan warned.\nLarge corporations in other parts of the world have learned that they can future-proof their businesses by participating in technology startups, sponsoring hackathons, launching incubators and accelerators that support tech startups with related businesses, Sopitan noted.\n\u201cAfrican corporates have lagged in this area. Jumia's success should inspire corporates to jump into the tech arena as enablers of emerging start-ups,\u201d he said.