Jumia: Achieving 54% cost savings in OTPs with Infobip Authenticate

Jumia, one of Africa’s leading eCommerce platforms, connects millions of customers with a wide range of products, from electronics and fashion to home goods and groceries. With innovative services like JumiaPay for secure online payments and Jumia Logistics for reliable deliveries, they have become an essential player in Africa’s digital economy, driving growth and empowering businesses.

As Jumia expands its footprint across multiple African countries, maintaining customer trust and security is at the forefront of its priorities. Strong authentication measures are central to Jumia’s commitment to safeguarding customer interactions, fostering loyalty, and enhancing overall satisfaction. Infobip has been a trusted partner in this journey, providing Jumia with SMS one-time passwords (OTPs) for account and transaction verification. 

However, in mid-2023, Jumia faced a new challenge amidst rising inflation and tighter consumer spending: escalating costs associated with SMS for OTP delivery.

The high volume of daily OTP requests resulted in high operational costs. With security remaining paramount, Jumia knew they needed to find a way to reduce costs while continuing to prioritize customer safety. For example, they introduced mandatory phone number verification for all customers to combat fraud and improve the accuracy of contact information. This proactive measure led to fewer failed deliveries and improved customer experience but increased the need for a cost-effective authentication solution.

In their quest to improve cost efficiencies, Jumia explored alternative communication channels. They discovered that while SMS remains widely used, WhatsApp is the second most used channel among their customers, except for markets like Algeria, where Viber is more popular.

To match their customers’ channel preferences and lower the overall cost, Jumia started considering adding these channels to its authentication portfolio. 

But, since chat apps require data connectivity for receiving and sending messages, Jumia needed an omnichannel solution to send OTPs at the right time, on the most cost-effective channel. To achieve this, they needed to find the right authentication solution to implement reliable failover measures so no single OTP gets lost. 

As one of our established customers, Jumia was already enjoying the benefits of our 800+ direct operator connections, which ensures deliverability via secure routes, giving them confidence that their authentication processes are secure and legally sound.

That’s why expanding our partnership to an effective omnichannel authentication solution like Infobip Authenticate was a logical choice.

Jumia decided to use WhatsApp, along with SMS as a failover when customers register new accounts, and to send delivery codes to confirm their identities when they receive orders.

Now, whenever a customer requires an OTP, it first goes to WhatsApp, and if they don’t have an internet connection, they will get an SMS in real-time. 

Best of all? Jumia only pays for the message that is delivered. In markets where Viber is the preferred channel, Jumia follows a similar strategy, starting with Viber and then using SMS as a failover channel.

From an operational perspective, Infobip Authenticate is fully automated, so Jumia only had to say “yes” to cost savings. We did all the work of routing and finding the best possible way to deliver OTP messages.

All of this guaranteed uninterrupted service while enhancing both Jumia’s and their customers’ experience and minimizing costs and operational efforts.

Jumia’s adoption of Infobip’s Authenticate solution has led to substantial cost savings and operational efficiencies, with notable reductions in OTP delivery costs across key markets. 

A detailed analysis of Jumia’s newly-implemented omnichannel authentication costs highlights consistent month-on-month savings, ranging from 5% to as high as 54%.

For instance, in June 2024, Jumia reduced costs by 36%. Even in months where the cost reductions were smaller, like November 2023, they still managed to save 5%.

These savings were achieved without compromising the security or reliability of OTP delivery. Jumia can now maintain uninterrupted service, improve customer experience, and deliver continuous authentication across all regions.

Furthermore, their experience highlights the growing presence of WhatsApp as a critical communication channel in Africa. Jumia is now looking to expand its use of our services further by exploring additional automation options—such as integrating FAQs into the OTP chatbot to enhance customer experience further and reduce operational costs.

The strategic shift towards omnichannel authentication has allowed Jumia to lower costs and create new opportunities for innovation and customer engagement in the future.