E-commerce group Jumia Technologies AG (NYSE: JMIA), often dubbed the “Amazon of Africa,” underwent a heavy restructuring following the expelling of its co–CEOs and its plunging share price, Financial Times reported.
Earlier this month, the company removed founders and co-CEOs Jeremy Hodara and Sacha Poignonnec and appointed a new management board.
Acting CEO Francis Dufay said the company would focus on its crucial e-commerce offerings, discontinue non-performing areas of the business and reduce its marketing efforts.
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Jumia will shut down Jumia Prime, a subscription program similar to Amazon.com Inc’s (NASDAQ: AMZN) prime service, introduced three years ago, allowing customers to receive free deliveries.
Jumia Logistics, the company’s in-house logistics service, will be discontinued in seven countries but will remain in critical markets like Nigeria, Morocco, and Ivory Coast.
Dufay added that it identified jobs cut to become a “lean organization to fulfill our mission.”
Jumia eliminated grocery delivery, increasing the minimum basket size for free deliveries and restricting free deliveries to major cities. Price subsidies and marketing blitzes will also stop.
Jumia slashed advertising costs by 31.5% year on year, Q3 results show.
Dufay, based in Abidjan, the economic capital of Ivory Coast, said senior company executives would also likely relocate to offices on the continent.
Low internet penetration, complex logistics, weak infrastructure, and a reticence to shop online continue to hold the sector back on the continent of Africa.
The depreciation of local currencies against the U.S. dollar in Jumia’s markets, particularly Nigeria, Egypt, Senegal, and Ivory Coast, has also negatively impacted growth margins.
Dufay said the path to profitability required “tough decisions.” “It’s fully in our hands to make it happen,” he said.
Price Action: JMIA shares traded lower by 1.62% at $4.10 on the last check Friday.
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Source: https://finance.yahoo.com/news/amazon-africa-jumia-technologies-undergoes-161316564.html