Some of the Biggest Challenges Facing Jumia

Like its rivals in many developing countries, Jumia offers payment on delivery “as a marketing tactic” since customers are worried about being scammed and are uncomfortable sharing their information online. To attract as many customers as possible, Jumia also has a travel website, an event and movie ticket business, a food delivery service and a payments system that gives users access to microloans. Jumia has spent a lot of money in its aggressive drive to gain market share, logging roughly $1 billion in losses, including $195.2 million on revenue of $149.6 million last year. Poignonnec says Jumia is focused on driving down costs while gaining users, but that the hundreds of millions of dollars it has invested over the past seven years has given it the scale to be the only Pan-African e-commerce player — even as rivals have withered. Last year, Jumia’s Nigerian rival Konga, which is backed by Naspers, was sold to Zinox, a data center and computer firm, after cutting roughly 60 percent of its staff. A number of other e-commerce sites have downsized, shut down or pivoted into other businesses. Being Pan-African has also helped Jumia sign partnerships with companies like Pernod Ricard, Mastercard and Xiaomi, the Chinese mobile phone maker, which would prefer to sign one big deal rather than individual country-level deals, the executives say. The the diversity of its markets allowed Jumia to use smaller countries such as Ghana or Ivory Coast as labs for projects they might roll out in bigger markets like Nigeria and Egypt — or, in the case of JumiaPay, which debuted in those two large markets in 2017, vice versa.

SOURCES: OZY

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