Africa: Jumia to cut products and overhead as new management chases profits

Dufay said he wants Jumia to become a more attractive platform for its third-party vendors to sell on. One way Jumia plans to achieve this is to move away from monetization shortcuts it took in the past where it increased commissions for sellers’ services (for instance, it charges 20-25% for fashion items and 5-10% for electronic items). Instead, the company intends to generate new revenues through value-add such as advertising solutions and building a stronger local supply of goods.

As Jumia restructures its local supply chain, it’s scaling back some of its offerings that haven’t made a good return on investments across its eleven markets. Dufay added: “These are projects we don’t feel are adding the right value to our ecosystem, to our customers and vendors and the platform.” However, some of these product lines will continue to operate in a few markets. These include Jumia’s logistics-as-a-service platform, which launched some quarters back and at some point moved 3.5 million packages (still active in Nigeria, Ivory Coast and Morocco), and First Party grocery e-commerce (active in Nigeria and Ivory Coast).

Call me a cynic, but why would these levers now work?