Last month, I commented on a Jumia job post (looking for lending officers), and noted that it was an “amazing” move by the ecommerce company. I saw the move as positive as no ecommerce company in the emerging markets like India and China has done well without building a great fintech company. China’s Alibaba has Alipay, India’s Flipkart has PhonePe. It is a slam dunk – Jumia needs to have a fintech company to have a chance in Africa. JumiaOne, the brand name for Jumia payment, is here.
I expect JumiaOne to become the most important component in the Jumia Group in coming years as it morphs pieces of Jumia brands to feed transactions into itself. Yes, the ecommerce can struggle but the fintech unit will win markets and territories – and profits.
Fintech and logistics deliver great balance sheets. Logistics is pay & carry while fintech is my commission & fees. With Jumia One, the mess of African ecommerce paralysis which I have articulated many years in Harvard Business Review will become muted. Jumia needs that as its stock in the NYSE has dropped from near $50 to about $6 now. Yes, Jumia needs to execute the double play strategy where fintech will help it manage the paralysis in the broad ecommerce sector.
Of course, JumiaOne lending arm has to battle Carbon (PayLater), Lydia, and other lending focused fintech companies across countries it operates. But it has a chance as many of these companies can co-exist as everything is still at infancy.