Jumia Nigeria is the largest e-commerce company in Nigeria based on revenue and orders. With over 20,000 orders per day and a work force well into the thousands, Jumia is really staking its claim as a power player in the Nigerian marketplace.<\/p>\n
Despite this success however, Jumia has been unable to align its business and operating models. Though the business is reliant on rapidly growing within Nigeria by exposing new users to ecommerce, its operating model has not been developed for long-term, stable growth. In fact the operating model focuses almost entirely on short-term goals which compromises the company\u2019s mission of being the market leader in Nigerian retail well into the future.<\/p>\n
Business model<\/strong><\/p>\n \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>Jumia provides value to the customers by delivering a very wide assortment of products at competitive prices. They also offer an incredibly transparent marketplace by listing all goods online in an easily accessible format. For delivering these products they extract a fee for delivery and procurement. The success of Jumia is dependent on a few factors:<\/p>\n Jumia is delivering a new product to Nigeria and to succeed it must win over the population. In the short term, Jumia has done this exceptionally well. They have brought in a diverse array of products and signed some great exclusive partnerships. Their promotional strategy has brought the firm a lot of buzz and they are a highly recognizable brand now in Nigeria. Finally, they have noted customer feedback and adjusted their strategy to take this into account.<\/p>\n However, these strategies have all given them short term success. While they have grown incredibly quickly, their real goal is to be the market leader for years to come. Their current operating model does not allow for this possibility.<\/p>\n Operating Model<\/strong><\/p>\n As a Rocket Internet-backed company, Jumia has a large international presence and backing. This has permeated in the company in tangible ways (personnel, company network, advertising language) and intangible ways (company culture, hiring practices, relationship with customers). This has affected its operating model tremendously:<\/p>\n \u00a0<\/strong><\/p>\n The operating model is built to help Jumia achieve rapid growth and short term success. Their emphasis on rapid expansion and high capital expenditures to achieve this has given them an advantage in the market. Jumia is better funded than its competitors and has a strong international base of support. However, this is not enough to ensure the company achieves its goals.<\/p>\n Jumia\u2019s emphasis on advertising really takes advantage of this fact. Their promotions have reached a huge swath of the population and have caused huge market penetration. However, this will not lead to long term success for a few key reasons:<\/p>\n Jumia has built a business model that guarantees short term success. But the company\u2019s goal of long term growth is stifled by its operating model.<\/p>\n [1]<\/a> http:\/\/www.bellanaija.com\/2014\/10\/10\/st-genevieves-new-collection-debuts-exclusively-on-jumia-nigeria\/<\/a><\/p>\n <\/p>\n [2]<\/a> http:\/\/dailypost.ng\/2015\/06\/10\/jumia-nigeria-taking-customer-satisfaction-to-previously-unattainable-heights\/<\/a><\/p>\n [3]<\/a> http:\/\/www.nairaland.com\/1500339\/how-jumia-nigeria-fires-staff<\/a><\/p>\n [4]<\/a> http:\/\/techcabal.com\/2015\/10\/20\/rumour-has-it-jumia-just-laid-off-300-workers-in-nigeria\/<\/a><\/p>\n [5]<\/a> http:\/\/www.techsng.com\/2014\/11\/black-friday-deals-nigeria-jumia-sales.html<\/a><\/p>\n [6]<\/a> http:\/\/www.nairaland.com\/2019101\/jumia-black-friday-sales-scam<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" A study on how Jumia’s business model is dependent on long term growth, yet the operating model sacrifices long term gains for short term success<\/p>\n","protected":false},"author":408,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[16],"class_list":["post-5827","hck-submission","type-hck-submission","status-publish","hentry","category-retail"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\n\n
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