Amazon of Africa, Jumia Technologies Undergoes Tough Restructuring To Boost Bottomline

Amazon of Africa, Jumia Technologies Undergoes Tough Restructuring To Boost Bottomline
  • E-commerce group Jumia Technologies AG JMIA, often dubbed the "Amazon of Africa," underwent a heavy restructuring following the expelling of its co-CEOs and its plunging share price, Financial Times reported.
  • Earlier this month, the company removed founders and co-CEOs Jeremy Hodara and Sacha Poignonnec and appointed a new management board.
  • Acting CEO Francis Dufay said the company would focus on its crucial e-commerce offerings, discontinue non-performing areas of the business and reduce its marketing efforts. 
  • Also Read: Amazon Confirms Downsizing Of ~10K Employees, Extends Severance Packages
  • Jumia will shut down Jumia Prime, a subscription program similar to Inc's AMZN prime service, introduced three years ago, allowing customers to receive free deliveries.
  • Jumia Logistics, the company's in-house logistics service, will be discontinued in seven countries but will remain in critical markets like Nigeria, Morocco, and Ivory Coast. 
  • Dufay added that it identified jobs cut to become a "lean organization to fulfill our mission."
  • Jumia eliminated grocery delivery, increasing the minimum basket size for free deliveries and restricting free deliveries to major cities. Price subsidies and marketing blitzes will also stop. 
  • Jumia slashed advertising costs by 31.5% year on year, Q3 results show.
  • Dufay, based in Abidjan, the economic capital of Ivory Coast, said senior company executives would also likely relocate to offices on the continent. 
  • Low internet penetration, complex logistics, weak infrastructure, and a reticence to shop online continue to hold the sector back on the continent of Africa.
  • The depreciation of local currencies against the U.S. dollar in Jumia's markets, particularly Nigeria, Egypt, Senegal, and Ivory Coast, has also negatively impacted growth margins.
  • Dufay said the path to profitability required "tough decisions." "It's fully in our hands to make it happen," he said. 
  • Price Action: JMIA shares traded lower by 1.62% at $4.10 on the last check Friday.
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