In July 2020, I became a fan of Jumia when I wrote, “I have written so much about Jumia when it was a pure ecommerce company. I never liked the business model then. But when Jumia changed and added payment, I became a fan. My change of heart was supported by data: the world has not seen any successful ecommerce company without double play.” Jumia has multiple plays now via payment and gaming.
Jumia rose more than 17% on Friday. People, it is good morning in Jumia as the company has crossed its IPO value. The man who called it a fraud now believes in Jumia.
Jumia Technologies JMIA 17.98% is an e-commerce company in Africa with operations in 11 countries in the continent. The company operates its Jumia Logistics and Jumia Pay businesses and also recently launched gaming division.
Jumia had 6.8 million consumers in the second quarter, year-over-year growth of 40%. The company also saw an all-time high for its Jumia Pay gross volume and saw 2.4 million transactions in the second quarter.
Andrew Left Bullish: Activist investor Andrew Left of Citron Research has changed his tune and is now going long shares of Jumia.
In May 2019, Left called out fraud at the company and said shares were worthless. This came shortly after the company went public in April at $14.50 a share.
Jumia Games will live inside the JumiaPay App. Yes, that is it: if you do not have money to buy things, you can play games by spending small money. Jumia just wants you to stay on the platform. This makes sense because winning the control of demand is important in the digital economy domain. Possibly, those games would result to buying or owning virtual Aso Rock palace, Second Nigeria Bridge toll gate, Ikoyi mansions, Banana Island biggies, etc. Investors like those, as by doing them, Jumia is expanding its demand-control and how it could monetize in the ecosystem. Why not? Gaming could deliver better value than ecommerce in the near future even as the ecommerce platform is what is attracting them to Jumia to begin with.
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People, update your playbook because the world is changing. Yes, you must meet or stimulate a new dimension of customers needs to thrive. As Jumia unlocks this massive value, Konga which has since gone hybrid commerce has reported that it would make money soon. These two companies have evolved and the markets have rewarded them. Your business model must evolve as markets change.
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At the end of the day, we still want or expect digital companies to serve customers and at minimum – meet their expectations; not just adding figures that make investors feel good.
For everything else Jumia adds to its ecosystem, we still want the ecommerce segment to do well, with better customer experience; that’s what we can call real progress. The payment system and gaming are largely to balance its books and increase valuations, but its success will be measured by ecommerce.
Companies usually start with a purpose in mind, which includes meeting customers’ expectations, but along the way, they lose their mind, abandon customers and then become self-serving. It’s left for us to remind them of the original purpose, because if we only applaud their nice numbers, we will all become casualties.
Jumia is a fantastic company. I use them every other day and sometimes daily for groceries.