Jumia, the African eCommerce giant, announced in a statement on the 7th of November the appointment of a new management board and acting Chief Executive Officer (CEO). This also includes the step-down of the company’s co-founders and co-CEOs, Jeremy Hodara and Sacha Poignonnec.
According to the Supervisory Board, the move is to increase productivity and reduce the high losses incurred by the company. With the decision, Francis Dufay was appointed as the acting CEO, and Antoine Maillet Mezeray, as the Executive Vice President, Finance & Operations.
Jonathan Klein, Chairman of the Supervisory Board, said, “We thank Jeremy and Sacha for their leadership over the last decade to envision and build a company that became the leading pan-African e-commerce player.
As we look ahead to the next chapter of Jumia’s journey, we want to bring more focus to the core e-commerce business as part of a more simplified and efficient organisation with stronger fundamentals and a more straightforward path to profitability. We look forward to working closely with Francis, Antoine and the leadership team to execute these objectives and continue our mission of offering a compelling e-commerce platform to consumers, sellers and the broader Jumia ecosystem in Africa.”
The newly appointed duo said, “We believe in Jumia’s relevance to African consumers and are confident in the Company’s ability to deliver strong results. We are working on a comprehensive plan to bring more focus to the business and drive sharper execution to scale the business towards profitability.”
Let’s look at the major lessons of this move by one of Africa’s leading e-commerce platforms, Jumia.
Loss of funds doesn’t always mean you should quit
Despite losing millions of dollars yearly, Jumia persists as they believe it is a path to becoming profitable. The slight traces of profitability also fuelled the appointment of an acting CEO to chart the company from another perspective.
In 2021, Jumia recorded a net loss of $226.9 million. This is 11% lesser than the $254 million in 2019. The COVID-19 pandemic also affected the company’s revenue in 2020. It reduced to $159 million compared to $179 million in 2019.
With the gradual economic recovery, it slightly recovered in 2021 to $177.9 million. Though the third quarter financial statement is slated for the 17th of November 2022, the company projects to end the year with a projection of $200 million in revenue.
Focus on the big dream
The co-founders of Jumia, Hodara and Poignonnec have been the co-CEO since its inception in 2012. Under their leadership, the company has expanded into 11 countries, thus listing on the New York stock exchange in 2019. Apart from this, the company has foraged into different projects, such as fintech. This led to the birth of Jumia’s financial arm JumiaPay.
With a focus on the ultimate goal and not who’s holding the rein, they stepped down for new minds to take over the leadership control of the eCommerce company to profitability.
Francis Dufay, the newly appointed acting CEO of Jumia, joined the Company in 2014. Since being a member, he has held different leadership roles. He was once the CEO of Ivory Coast and, recently, Africa’s executive vice president (EVP).
Antoine Maillet-Mezeray, the newly appointed Executive Vice President, Finance & Operations, was previously the Group’s Chief Financial Officer. Starting with the company in 2016, he has spent over six years and has become instrumental in driving the finance function and developing it in a public market context.
With their years of expertise, the board expects them to refocus teams and resources on activities and projects delivering the best-added value to consumers, sellers and the broader Jumia ecosystem.
They are to reduce operating losses and set the business on a clear path to profitability through stronger cost discipline, targeted monetisation initiatives and a more simplified and efficient organisation.
Embrace new trends
With the business potential in fast-moving consumer goods (FMCG), Jumia plans to expand its grocery sub-category, which has seen about one million unique items added to the sub-category.
Out of the categories on the Jumia platform, FMCG was the fastest-growing as it recorded 180% year-over-year expansion on Jumia. The food delivery category came second with an 86% Year-on-Year growth.
Trying out new things has seen the eCommerce company start its financial technology (fintech) arm called JumiaPay. It launched the payment service provider in December 2021. In starting on the right foot, it has also acquired a Payment Service Solution Provider (PSSP) licence from the Central Bank of Nigeria (CBN). Jumia said its fintech arm can now process payments with this licence.
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