Startups

A Troubled Billion-Dollar African eCommerce Giant Is Resorting To Advertisement Revenues In Kenya


January 14, 2020

The Kenyan arm of African e-commerce giant, Jumia, is venturing into the advertising business weeks after a staff layoff was reported at the Jumia Kenya office.

Sam Chappatte, CEO of Jumia Kenya, who made this known via a recent LinkedIn post, stated that Jumia Advertising is launching in Kenya to tap into the advertisement market by enabling partner agencies to reach millions of visitors every month.

“We are launching Jumia Advertising in Kenya, to enable agencies and partners to access c 2-3M unique visitors per month (c 20% of the active internet population according to Google),” the post reads.

“Their messages will reach highly targeted segments, right at the moment of purchase – e.g you are selling DSTV and hit people who are buying new TVs, or you are selling lager and can land your USP to customers about to purchase a competitors product,” says Chappatte via the post.

It is understood that the advertisement product has gone through tests in Kenya where it has been found to work “super well” for conversion rates (CR) and click-through rates (CTR).

Jumia’s dive into advertising, through the launch of Jumia Advertising in Kenya, appears to be the latest of a series of moves by the e-commerce giant to restructure its business and salvage its ailing e-commerce venture in Africa.

Following the release of its most recent financials, which reflected yet more losses, a scale-back on its e-commerce business and a restructuring of its business verticals were talked up as possible ways to arrest the cash haemorrhage and move the company closer to profit.

And the latest lunge for the advertisement space in Kenya seems to be straight from that playbook.

Shortly after Andrew Left’s Citron Research came for Jumia in April 2019, the company’s share fell from a peak price of USD 49.99 and bottom-dropped out as the share price fell below its IPO price of USD 14.50. Within the next few days, disgruntled investors had begun filing class-action lawsuits.

Jumia has never quite recovered since then. The company has since lost its unicorn status after initially describing itself as Africa’s first tech unicorn.

Since that rocky post-IPO development in early 2019, Jumia has reported mounting losses at the end of two separate quarters. The company has also admitted to fraudulent dealings from members of its J-Force team while attempts at restructuring and salvaging have seen Jumia close shop in Gabon, Cameroon, and Tanzania.

Jumia is also leaving Rwanda in January 2020 while there have been staff layoffs in Kenya, plus the Jumia Travel vertical has basically been offloaded as the company announced recently that it was downsizing operations in Nigeria, its biggest market.

Featured Image Courtesy: ibtimes.com

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