Jumia, Africa’s most ambitious e-commerce experiment, is at a crossroads because of the unstable African E-Commerce landscape.
According to Farouk Mark Mukiibi, a Retail Brands Strategist and Marketer, following a major investor exit, where Baillie Gifford offloaded a USD18 million stake at a significant loss, the company’s financial health is under pressure.
“This move signals the end of a major chapter in Jumia’s story and raises questions about its future,” Mukiibi contends.
Deeper Look at Jumia’s Numbers
Mukiibi notes that Jumia’s Q1 2025 report reveals a mixed bag. While customer orders rose by 15% and active users grew by 20%, revenue dropped by 26% and Gross Merchandise Value (GMV) declined by 18%.
This paradoxical situation, he asserts, suggests that users are ordering more but spending less.
This means that the average basket size is shrinking, indicating price sensitivity, dwindling loyalty, and a race to the bottom.
Challenges of African E-commerce
Africa’s e-commerce landscape is unique, and Jumia’s struggles highlight the challenges of operating in this market.
“Logistics are chaotic, addresses are fluid, and trust is still deeply analogue,” Mukiibi points out.
“In Uganda, for example, people don’t just shop online; they scroll and compare while walking to a trusted store, DM a vendor on WhatsApp, and send a boda to pick up,” he adds.
He emphasises that Jumia’s biggest competitor isn’t a slick new app; it’s the flexibility of the informal market.
Building for the Rhythm of the Market
To survive in Africa, Mukiibi advises that e-commerce companies need to build for the rhythm of the market, not just the promise of its size.
This, according to him, means digitising trust, understanding fluid buyer behaviour, plus localising logistics and logic.
As such, Jumia’s struggle to adapt to these nuances is contributing to its current challenges in the African e-commerce arena.
Future of Jumia Uncertain
Accordingly, Mukiibi argues that the question now isn’t whether Jumia will stay or exit; it’s whether it will stay, but differently.
He highlights the fact that to succeed, Jumia needs to rethink its strategy and adapt to the African e-commerce landscape.
This requires a deep understanding of the market, its rhythms, and its nuances.
By building for the rhythm of the market, therefore, Jumia can survive and thrive in this challenging but promising landscape.
This is because, according to Mukiibi, Jumia’s future depends on its ability to either adapt to the African e-commerce landscape or not.
By understanding the unique challenges and opportunities of this market, the company can rethink its strategy and build for the rhythm of the market.
Only then can Jumia survive and thrive in this complex and dynamic environment.