In its early days, Jumia focused on developing its core marketplace platforms for products (Jumia) and food delivery services (Jumia Food), as well as building Jumia Pay as a payment platform. The company employed several strategies to drive growth:
1. Expanding into Secondary Cities and Underserved Markets
- Jumia recognized the importance of reaching beyond capital cities to drive scalable growth.
- The company emphasized establishing a physical presence in secondary cities to build trust with communities.
2. Optimizing Search Engine Optimization (SEO)
- Jumia rebuilt its SEO team with experienced professionals to improve the customer journey from search to purchase.
- Strategies included clean website architecture, better keyword and text descriptions, and consolidating listings to streamline searches.
3. Leveraging Social Media and Digital Marketing
- Jumia employed a well-rounded digital marketing approach combining SEO, social media, and other channels.
- This strategy helped drive customer acquisition and engagement in its early stages.
4. Adapting to Local Conditions
- Jumia tailored its strategies to the unique challenges of operating in early-stage and less developed economies.
- The company was willing to experiment, change, and pivot as needed to drive growth and ensure longevity.
Challenges in Early-Stage Economies
While Jumia demonstrated strong competitive advantages, the company faced challenges in its early days due to the nature of operating in developing markets:
- Smaller market size and slower growth compared to developed economies
- Difficult unit economics due to factors like infrastructure, logistics, and consumer behavior
- Navigating the broader ecosystem and solving problems to function effectively
These challenges impacted Jumia’s ability to achieve strong unit economics in the short term, despite its competitive strengths. The company had to adapt its business model and strategies to the realities of the markets it served.
Jumia’s Strategic Pivot
In recent years, Jumia has undergone a strategic pivot under the leadership of CEO Francis Dufay. The company is now focusing on long-term growth strategies, including:
- Expanding into secondary cities and underserved markets.
- Building supply in key categories and educating new populations on e-commerce.
- Cutting expensive short-term growth levers like promotions and customer incentives.
- Emphasizing community engagement and building trust in new markets.
While this transition has presented challenges, Jumia remains committed to adapting and changing to do what is best for customers and vendors. The company’s willingness to pivot aligns with the understanding that change readiness is key to longevity for African startups.