How Far with Jumia and AXA’s Partnership?

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In the middle of last quarter, the duo of Jumia and AXA Mansard (formerly Mansard) excited the technology and eCommerce community by announcing a big partnership between the two companies.

In specifics, Jumia’s parent company, Africa Internet Group, AIG, gave out 8% of its total shareholding to AXA Mansard for $75 million. In return, Jumia and AIG’s other subsidiaries namely Jumia itself, Jovago, Lamudi, Carmudi, Jovago and perhaps Kaymu would open up there site for AXA to have access to their customers and audience. With this, AXA would be able to market its protection and risks management product to the fast growing eCommerce hub AIG has built for the past four years.

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True to the letter of the arrangement, AXA has launched the initiative on Jumia. AXA has now been integrated into Jumia with a sub domain axamansard.jumia.com.ng. There are three categories of products listed for customers to choose from. The positives to this partnership between Jumia and AXA is symbolic. In a short period of time a mainstream insurance company has gained access to a younger audience base who do not really take insurance and its providers serious.

However, the execution of this strong idea might not make it get the real traction it deserves. AXA’s products presentation on Jumia has not really deviated from the norm. There seems to be no difference between having the offering on AXA’s site and on Jumia. This is because, what should have become an edge for Jumia is now sold like a typical product on the site with an exclusivity.

As it is, AXA might get more inquiries from Jumia, but the long term would not make much difference as Jumia’s competitors will look at the loopholes and perhaps bundle insurance with some of their high volume products and would be able to sell it for a lower price for a larger volume. As a matter of fact, Interswitch now sell insurance on its Quickteller platform with a heavier marketing campaign. Using a multi-provider approach, Chekki.com.ng, Nigeria’s leading site for selling new and fairly used cars also sell car insurance as a stand alone product on its site. The market is getting more competitive and a change of strategy is needed.

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Also, Jumia and AXA are overlooking one important lesson. The eCommerce demographics are very much different from the offline insurance customers. Apart from the fact that insurance penetration in Nigeria is just about 1%, about 80% of Nigeria’s insured targets are not really the typical eCommerce customers. For them to do well with this ‘millennial’ and ‘trenders’ generation, there needs to be a totally different modulation of the Ps of marketing. Apart from their less understanding of insurance as a risk and wealth management tool, they do not take insurance seriously.

Instead of making it open-ended, the advantage of protection services should be a USP for Jumia. As a result of their low appreciation of insurance, the millennials who are the largest chunk of the eCommerce population would prefer a bundled product with a stronger value proposition than buying insurance as an added on. At the moment, the duo need another approach to executing their partnership.

As the Internet space gets more attention from thinkers and investors, a more disruptive solution might hit the market and would continue to put Jumia and AXA’s partnership on the edge.