Jumia is having a tough winter in New York. But it has a promise ahead. There are many latent opportunities in Jumia. If they unlock them, great things will happen.
There is a great playbook: “spin off” JumiaPay and embed “Buy Now Pay Later” in it . Then do three other things with JumiaPay.
JumiaPay has many latent leverageable factors which could compound in the 13 countries Jumia currently does business. It has to be the double play which Jumia will feed on.
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How many fintechs are in 13 African economies with millions of users and still worth with the parent company less than $800 million? Only JumiaPay – and that should change. Yes, JumiaPay alone is worth more than $1 billion. Jumia, think differently; you have all the pieces already.
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Personally, I think Jumia (eCommerce) hasn’t really found Product Marketing Fit to be honest. Jumia still rides the narrative that it’s the ‘Amazon of Africa’ and some investors still see it as a way to get exposure to Africa’s growing internet economy. My concern is that Social Commerce (WhatsApp and Instagram sellering) is slowly eating the eCommerce market, and people may not be aware of this yet.
JumiaFood’s is also another huge play, and it’s growing too, 2million deliveries a quarter is definitely impressive. I believe that when companies build at scale, they must capitalize on their advantages – this is why Microsoft Teams came after Slack but still dominates that market – Microsoft had too many inherent advantages to capitalize on. If JumiaPay is their salvation, they must capitalize on it.
One of my concerns is that we’re getting to see this because Jumia is public, only God knows what’s happening at some of our privately run VC funded tech firms bleeding capital like blood. We need to balance chasing growth with core fundamentals.
P.s: Don’t go public if your fundamentals aren’t right yet.
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If Jumia ‘spin off’ JumiaPay, will the latter still retain its name, or the Jumia brand will become a holding company? Google has YouTube, Android and other products where its revenues come from, and they all add up to give Alphabet its market valuation. The old Microsoft we know is not the same with the new one, from Azure to LinkedIn, and amalgam of gaming companies it’s acquiring, all add up to give it its market valuation. Amazon is obviously a clear example.
These tech behemoths didn’t really spin off anything, whenever we hear Amazon – the default thought is e-commerce, but we know that there are many more to Amazon, so why is Jumia not seen in the same light?
I do think that there’s a fundamental issue to deal with, especially with regard to narrative. What does Jumia stand for and whenever the name is mentioned – what comes to mind? How has JumiaPay helped to advance its sister e-commerce? The influence of AWS on Amazon e-commerce is very pronounced, and vice-versa, can we say same about Jumia e-commerce and the fintech arm?
If you ask me, there are still identity and purpose crises at Jumia, and spinning off won’t solve that, even when it adds few points to the fintech arm, but Jumia as a brand won’t rise with it.