Last week, Jumia said it has swallowed all former companies belonging to its parent company, Africa Internet Group AIG.
The plan seeks to make Jumia a one stop shop for everything eCommerce was activated last week. According to a newsletter sent to its customers, Jumia said “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)”.
This position makes Jumia the ‘home for everything Internet shopping’. There is no doubt the company can pull it off. However, there is a disquiet in the category and it is still left to anyone’s imagination how Jumia’s competitors would respond.
Jumia’s new positioning has pitted the company against six different categories. So, as the company plans to take on the market, so is the market going to prepare for the battle ahead.
Here some of the strength Jumia possess:
-Economies of scale- the combination of all these subsidiaries would allow the company save considerable cost of providing an average service. This in turn allow Jumia to provide cheaper services when compared to its competition. Caveat- this is based on the assumption that the company has dismantled its former structure of nearly-independent operations for the each of the units.
-Negotiation power-part of the major strength any eCommerce company worth its salt should possess is the ability to negotiate good deals with suppliers/OEMs. However, there is a serious limitation to a company’s bargaining prowess when the transaction volume has a consistent ceiling. Jumia can now strike deals with many suppliers because it has a bigger market to push products. All other things being equal, it can negotiate big deals across all its platform at a better price than its competitors.
The next quarter is a decider for Jumia and the eCommerce scene in general. the company should be preparing its mass communication plans and how it will position itself.
