In June 2016, Africa Internet Group (AIG) announced that it would officially be rebranding itself and all its subsidiary brands to JUMIA. This, according to the company was to bring together all of its brands under a single brand and ecosystem as they continue their move to try and become Afrika's largest e-commerce platform.
Some of the old Africa Internet Group brands & what they are now after the Jumia rebranding
Their product catalogue includes JUMIA, Hellofood, Kaymu, Everjobs, Lamudi, Carmudi and now nested under a common name of JUMIA.
For example Hellofood, the online food ordering site will become JUMIA Food under food.jumia.ug or any other country specific domain. Carmudi, the automobile car marketplace will become JUMIA Car under car.jumia.ug or .ng or .ke, and so on and so forth.
“Operating under the same brand name reinforces the legitimacy of proposing other services to our customers and to our sellers.We want to have one strong brand that is trusted and loved by our customers across Africa” - Sacha Poignonnec, Co-CEO Africa Internet Group and MD Rocket Internet France
Like any other well oiled PR machinery, you'd expect such to be said, but is it the only reason why AIG rebranded?
Just like in war, it doesn’t really matter who is right but rather, who is left, and that is what JUMIA did.
The Journey So Far
Since launching in Nigeria in 2012, JUMIA has become an e-commerce juggernaut that is arguably the largest of its kind in Afrika under the stewardship of AIG (now JUMIA) -- Rocket Internet's African investment outfit in partnership with MTN, AXA, Orange and Goldman Sachs among others.
With its e-commerce platform alone spreading across as many as 11 countries (if you include other platforms that number goes to above 30 countries) and counting on the continent, there is no doubt they are a company on a mission to conquer a large slice of Afrika's burgeoning Internet consumers.
Jumia's Afrika Presence | Rocket Internet
Starting out with the launch of JUMIA as an e-commerce platform in Nigeria, Africa Internet Group with the financial backing of MTN and Rocket Internet went on an aggressive strategy soon thereafter launching the likes of Jovago, Lamudi and more in a bid to move quickly and capture the market.
But the journey for AIG has not been all smooth.
It’s been a public secret for just over a year now that AIG has been embroiled in internal turmoil. From the closure of non-performing portfolio companies like Kaymu Zambia in 2015, in the wake of falling commodity and metal prices. To the mass layoffs at Jumia Nigeria, and the subsequent departure of Marek Zmyslowski, the Jovago Nigeria Co-Founder and CEO (among other AIG Nigeria CEOs who left various subsidiaries).
What's happening with AIG is more like this:
To put things into context, replace UN in Uhuru Kenyatta's words with Africa Internet Group.
This is not to sensationalize Uhuru Kenyatta’s recent quote in a Kenya daily newspaper but AIG’s burn rates in African markets have been rocket high bordering sheer carelessness; especially on facilitating their white male executives on foreign soil (I will touch on this later) amid the already exorbitant user acquisition costs. The latter could easily be exonerated on the premise of using money as an acquisition weapon. Rocket’s strategy is like a brute-force attack, but oh yeah, it works?
With the recent headline funding of $83 million from global insurance company AXA accompanied by Orange Group among others have sent AIG/Rocket Internet Africa into the celebrity territory of unicorns and decacorns according to some, and it is the first from Africa to raise to that occasion; valued at excesses of $1.2 billion dollars.
But even this funding from AXA has raised some eyebrows, with one of the more vocal ex-AIG CEOs, Marek Zmyslowski, making the point publicly of how AIG seems not to be able to raise money anymore from funds or VCs and is now preying on corporates.
What is significant is that they can't raise money from funds anymore, just corporates. AXA Buys 8% AIG For €75m https://t.co/H0boJeQnDo— Marek Zmyslowski (@marekchinedu) February 8, 2016
He further (sarcastically?) asked if AIG is likely to move to raising money from governments.
Rocket has moved from taking money from High Net Worth Ind to Vcs, to PEs, to Corporations. I guess next is Governments :D— Marek Zmyslowski (@marekchinedu) April 27, 2016
AIG, commander of the Jumia ship, is reported to have raised more than $400 million from various investors to date, with the largest round coming from Goldman Sachs, AXA and MTN. The most feasible route to follow in the investors’ interests is to either go IPO or sell on to an interested buyer. With these two options comes great responsibility and by Jove, well behaved financial figures. Which is not the case at the moment for AIG.
The lag and enumerable losses made by other portfolio companies have trickled down on the successes of proven ‘winners’ like Jumia. And in the lot of proven winners in Africa, South East Asia, Latin America and East Europe, Jumia came among the last in performance according to this "no chills" graph.
Jumia's Financial Performance Worst Among Rocket Internet's Companies | D.O
Also, as per Rocket Internet's "Q1 2016 Selected Portfolio Companies Update" deck, JUMIA's "net revenue negatively impacted by challenging macroeconomic environment in Nigeria – the largest country of Jumia in terms of GMV."
Jumia's Financial Performance - Q1 2016 | Rocket Internet - Q1 2016 Selected Portfolio Companies Update
Macroeconomic factors were blamed for the 2016 Q1 slump. The same macroeconomic factors were blamed after the closure of Kaymu Zambia in 2015. It possibly could be the same factors that caused the offloading of the reins of EasyTaxi to Safaricom a in Kenya.
Let's take a slight detour back to something I raised earlier.
African Internet Group's Executives Are Not So Afrikan
Earlier I said that
"AIG’s burn rates in African markets have been rocket high bordering sheer carelessness; especially on facilitating their white male executives on foreign soil..."
You probably think this is an exaggeration - the part about white male executives that is - but the same point was raised by Jason Njoku, Founder & CEO of iROKOtv, in this post where he speaks about being a black tech founder.
"Their entire ‘exceptional’ leadership team is white. In Africa. 1/18 or 5.5% are represented by black folk. They have 1,500 employees. I am sure if AIH released their diversity statistics it will read 98% black. But it’s the ‘exceptional’ leadership team I think needs to be looked at." - Jason Njoku
2014: Jumia's Exceptional Leadership Team | Jumia Website
That was back in 2014 you might argue, how do things look now? Well, not much has changed from an executives/CEO perspective.
Rocket Internet Africa
- Sacha Poignonnec, Managing Director Africa
- Jeremy Hodara, Managing Director Africa
- Akua Nyame-Mensah, M.D. Ghana & Nigeria
- Eric Lauer, CEO Jumia House Africa
- Dan Karua, Managing Director Jumia House Kenya
- Fanny Ponce, Managing Director North & West Africa
- Massimiliano Spalazzi, CEO Jumia Market Africa
- Justin Christianson, Managing Director Jumia Market East Africa
- Carol Jiang, Managing Director Jumia Uganda
- Sam Chappatte, Managing Director Jumia Kenya
- Bastien Moreau, CEO Jumia Morocco
- Estelle Verdier-Watine, Managing Director Jumia Travel East Africa
- Kushal Dutta, Managing Director Jumia Travel Nigeria
- Amine Chekali, Managing Director Jumia Travel Algeria
- Joe Falter, Founder & CEO Jumia Food
- Duncan Muchangi, Managing Director Jumia Food Kenya
- Clement Tesconi, Managing Director Jumia Classifieds Morocco
This is just a glimpse considering it's a list of CEOs and Managing Directors of JUMIA companies across the continent but the pattern still holds once you start looking at other CxO level (e.g. CFO, COO) executives at JUMIA companies in Afrika.
I'm not saying a bit extra melanin plays a role in the success of a company but surely in companies that claim to be Afrikan and operating in Afrika there should have more diversity in the hues at JUMIA.
As Marek (ex-Jovago CEO & Co-Founder) puts it:
I sometimes wonder how many customers AIG loses because of racial and xenophobic prejudice.— Marek Zmyslowski (@marekchinedu) August 3, 2015
Make Or Break
On a global scale, 2016 is the make or break year for Rocket Internet. That’s why their constituent outfits in Asia and Africa are consolidating to fend off the ringing death knells of a unicorn turned unicorpse from becoming a reality.
Rocket Internet’s mission is: To become the world’s largest Internet latform outside the United States and China.
From history, their most successful model has been copy-build-sell. They clone successful corporations from US and deploy them in virgin markets. Notable is their 2008 landmark $100 million plus sale of their Groupon clone (CityDeal), to Groupon. Among others, their recent 2016 sale of a controlling stake in Lazada to Alibaba.
In a February 2016 interview, Paris based Poignonnec mentioned to Quartz Africa that they wanted to be profitable but in a long-term perspective. “Amazon is a great model to look at. They have a great valuation, they have a great customer base. Everyone one is confident that Amazon has a great future but they are still yet to make money.” said Poignonnec.
With volatile markets in London, Africa’s major corporate and investment partner, coupled with the woes caused by Brexit, a public listing on any bourse is quite unlikely for JUMIA.
However, with the rumored market entrance of Alibaba, a Chinese e-commerce giant and America’s Amazon.com, the prospects for an acquisition look possible despite JUMIA under-performing.
Cover Image by Rocket Internet