Jumia Deploys Double Play Strategy with Jumia Prime

Jumia Deploys Double Play Strategy with Jumia Prime

Jumia launches Jumia Prime, mimicking Amazon Prime, on a brilliant double play strategy where it promises to offer free shipping to customers, in Lagos and Abuja, who pay subscriptions to use Jumia. Here are the terms.

 

  • Jumia Prime subscriptions are available through prepayment only.

  • Jumia Prime subscription plans are limited in quantity and when all available subscriptions have been purchased no more shall be available.

  • Usage of your Jumia Prime subscription shall be individual and limited to your family.

  • Jumia Prime cannot be used for professional usage. Professional usage is qualified when more than 50 orders per month are placed.

  • Jumia Prime subscription is non-refundable and non-cancellable.

  • Jumia Prime’s free delivery applies to Jumia Global products however doesn’t cover International Delivery Fees.

  • Jumia ensures that the Jumia Prime services will be maintained during the whole duration of the subscription however doesn’t ensure the permanent availability of Jumia Prime subscription.

Jumia Prime subscription is priced as follows under the terms above;

  • 1-Month (Lagos) subscription — ? 1,999
  • 3-Month (Lagos) subscription — ? 4,999
  • 1-Month (Abuja) subscription — ? 2,499
  • 3-Month (Abuja) subscription — ? 6,499

All Together

If Jumia makes this work, it will add great value in its valuation. Investors typically like digital companies with subscriptions as subscriptions make revenue predictable. Because Jumia is offering free shipping on this subscription, this is not a “tax” on users. Jumia has simply modeled its marginal cost, and found out that even if customers place 50 orders in a month, the cost of shipping will not be more than the subscription fee + value created by simply being a Prime member. If you write Jumia case study, you will notice this company has tried anything possible in the African ecommerce market: very dynamic people there.

 

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