The Tough Road Ahead Of Jumia


As predicted last week, Africa Internet Group, AIG has finally put to rest all speculations about the future of its eCommerce group- Jumia.

The company now has only one platform that will now be operating in the eCommerce space. Prior to this time, AIG used to have Jumia, Jovago, Everjobs, Lamudi, Carmudi, Easy Taxi, Hello Food, Vendito, Kaymu all operating in a near-independence structure.

According to a newsletter the company sent to all its customers announcing the renaming of Hello Foods to Jumia Foods, Jumia has swallowed them to become: Jumia Market (previously Kaymu), Jumia Travel (previously Jovago), Jumia Deals (previously Vendito), Jumia House (previously Lamudi), Jumia Jobs (previously Everjobs), and Jumia Car (previously Carmudi).

With this new approach, Jumia is now the largest eCommerce platform by scale of listings, category-focus and service offering. How the company turn this status to strength and give profit back to its shareholders in the next couple of years is another kettle of fish.

The real work is how AIG will now face the market with a “single barrel of gun as opposed to when it had more 8 barrels”.

One of the first challenge is how the company will take on arch-rivals such as Konga and Yudala as a core eCommerce sites. Second is how the company will push its individual categories mentioned above. The upside is that company now drives traffic and resources to a single domain (with multiple sub-domain). The customer now has many things to choose and do with Jumia. However, the challenge of being everything and standing for nothing is a major nut-to-crack for team Jumia/AIG.

The law of positioning in marketing is still apt. The more reason Facebook would rather buy Instagram and let it exist on its own since it is viable, providing a niche but scalable value. The main reason Microsoft bought Skype and shuttered its own video/voice call products.

The next full quarter after this fundamental restructuring of the AIG business model will determine if Rocket Internet will be getting out of certain business offerings entirely. There is no need packing so many services together under Jumia if some of them will not bring in anything to the bottom line.

The company also need a coherent model, shutting down services to customers might deal a fatal blow to the company’s image, a strong weakness competition can use against Jumia.

Early February, AIG had valued itself for USD1 billion. This development means the company cannot tout such highfalutin valuation in the business circle without stuttering.

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