Jumia Kenya Moves to Marketplace Model

Jumia Market

While celebrating its 3 years anniversary, Jumia Kenya has just announced that it is moving away from the eCommerce model to a marketplace.

A statement released by Parinaz Firozi, Jumia’s CEO in Kenya, explained the move as an attempt for the company to pursue a better business model. “Having achieved significant milestones that changed Kenya’s online retail landscape, we want to leverage on the marketplace model to provide our customers with the largest product assortment and help maximize profits for hundreds of entrepreneurs selling on the platform.”

“The marketplace model will allow the company to cut cost by allowing sellers and buyers to handle some of the deliveries and fulfilment themselves, Jumia Kenya will then become a platform for buyers and sellers to do business,” the statement further revealed.

Jumia, a leading eCommerce start-up floated across many African countries by the Africa Internet Group, AIG, faced series of challenges that threatened its investment capital burn. The company was reported to have sacked more than 200 staff in Nigeria. Other players in that category have also trimmed down their staff strengths.

Africa is a goldmine for venture capitalists wanting to invest in eCommerce, as a result of the continuous boom in Internet penetration and the growth in smart phone usage. However, epileptic logistics and transportation, socio-political challenges, shoot up the OPEX and CAPEX of eCommerce start-ups who are fast finishing investment capital.

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