Jumia refocuses on sustainable growth, cuts marketing investments
By Joseph Ekeng
In a bold move to tackle mounting losses and pave the way for sustainable growth, Jumia, the leading e-commerce giant in Africa, has announced a strategic shift in its business approach.
The newly appointed CEO Francis Dufay, revealed that the company would reduce its marketing investments and instead concentrate on improving supply chains, offering customers exceptional deals, and enhancing the overall user experience.
Recognizing the pitfalls of previous growth strategies heavily reliant on marketing spend, Dufay emphasized the need for a new direction. “We have realized that our previous approach to growth, which heavily relied on marketing, led to unfavorable economics. Therefore, we are charting a different path that prioritizes securing better supplies, delivering competitive prices, and showcasing renowned brands,” stated the CEO.
The updated business strategy comprises two key pillars: better cost management and establishing the right foundations for long-term success. With a focus on cost reduction, Jumia aims to simplify its operations by eliminating unprofitable segments of the business. Notably, Jumia Food has been discontinued in Senegal, Ghana, and Egypt. Furthermore, the company has significantly reduced overhead costs, including a remarkable 60% reduction in the Dubai office. This cost optimization initiative resulted in a reduction of 900 roles by the end of last year.
However, Jumia is keen on ensuring that the cost-saving measures do not compromise the value proposition it offers to both customers and vendors. The company aims to operate every department at lower costs while upholding its commitment to delivering exceptional services.
The second pillar of Jumia’s strategy revolves around establishing the right fundamentals for sustainable long-term growth. To achieve this, the company plans to expand its reach beyond capital cities and tap into the potential of smaller cities near rural areas. Market research indicates significant untapped potential in these regions, and Jumia aims to capitalize on it.
Moreover, Jumia is dedicated to enhancing the user experience across its platforms and applications. By making its digital interfaces more seamless and user-friendly, the company intends to attract and retain a growing customer base.
With this strategic realignment, Jumia is confident that it will not only address its current challenges but also pave the way for sustained success in the dynamic e-commerce industry. By prioritizing sustainable growth over short-term gains, Jumia aims to solidify its position as a leading e-commerce platform in Africa, delivering unparalleled value to both customers and vendors alike.
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