Africa’s ecommerce giant, Jumia, is moving to close its Dubai office as part of its plan cut down on operating costs amid economic headwinds that have seen the company lost massive revenue.
This is coming weeks after the company’s founders and co-CEOs Sacha Poignonnec and Jeremy Hodara left. Under the plan, Jumia will move all top executives from the 60-man Dubai office to its African offices.
“Managers will move to countries in their region, with most going to Morocco, Kenya and Ivory Coast, and the 60-person Dubai office will be disbanded.
“As we are an Africa-focused company, we want our leaders to be based with customers, vendors and employees,” the new acting head Francis Dufay said in an interview.
The move also involves streamlining the company’s products and services to fit into targeted markets across Africa.
According to Dufay, Jumia will focus on its “bread-and-butter” e-commerce categories, including fashion, beauty, consumer electronics and appliances. The company will also pause the logistics services it offers third parties in its operating countries except for Morocco, Nigeria and Ivory Coast, he said.
“We have spread ourselves a bit too thin in the past by pushing many projects across our markets,” he said. “We are at a very interesting point in the life of the company, as the board appointed a new leadership more focused on the on-the-ground operations to drive a new plan to lead to a significant improvement on the profitability trajectory.”
The company said it will be executing on a clear strategy to accelerate progress towards profitability, listing the core levers of this strategy as follows:
- Enhanced focus on the core business
- Stronger cost discipline
- Profitable usage growth through strengthened e-commerce fundamentals
- Balanced monetization strategy
- Focused JumiaPay development
Jumia has struggled to keep its businesses profitable since it went public on the New York Stock Exchange. The ecommerce has recorded massive decline that has tanked its shares as much as 68%.
Jumia’s third-quarter report showed its revenue spiraling downward. The company’s operating loss declined 33% from $64 million to $43.2 million, while adjusted EBITDA losses dropped to 13% from $52.5 million to $45.5 million; their lowest level in six quarters.
Based on this trajectory, which has kept its shares in a bad shape, Jumia is cutting operational costs in a push to return the company to revenue growth.
“We have a clear focus for the next chapter of our journey and are taking decisive action to support our path to profitability. We will bring more focus to the business, directing our efforts and resources to projects and activities that deliver tangible value to our consumers, sellers and broader ecosystem participants. We are also enforcing tighter cost discipline and driving efficiencies across the full structure, while enhancing the fundamentals of our core e-commerce business to drive usage growth,” Dufay said.
