As Jumia Appoints New CEO and Plans to Boost JumiaPay, What are the Odds of declaring Profit in its Next Quarterly Report?

Jumia recently announced a change in the executive leadership of its Nigerian operation, announcing Massimiliano Spalazzi as its new CEO to oversee its strategy of boosting its business through JumiaPay.

Spalazzi replaces Juliet Anammah who moves ahead to assume the role of chairwoman for Jumia Nigeria and Head of Institutional Affairs across Africa.

Meet Massimiliano Spalazzi: Jumia’s new CEO

In 2010, Spalazzi obtained a double degree in International Management from the Fudan University in Shanghai, China, and Universita Bocconi in Milan, Italy. He was an exchange student at ESSEC Business School in 2008 where he studied Management.

From February 2010 to December 2014, he worked in several firms which include Rocket Internet, L’Oreal and GI Group. He co-founded Partitona on March 2011 and worked as African Regional Manager in Millicom from July 2014 to December 2014.

He started working for Jumia Group as Head of online Marketing at Jumia Nigeria in August 2012. He was already a Managing Director when he left in July 2014.

Spalazzi joined Jumia again in 2015 and held a number of roles. He was the CEO of Jumia market (Africa), as well as the CEO of Jumia for Emerging Countries. The countries under his portfolio were Ghana, Tunisia, Senegal, Algeria, Cameroon, Tanzania,and Uganda.

He held an executive role as Vice-President for Marketplace until his recent appointment as the CEO for Jumia Nigeria.

Is JumiaPay Enough to Drive Jumia’s Business Growth in Nigeria?

Jumia recorded a loss of €45.4 million ($50 million) as released in its Q3 report for 2019. Before that, it also recorded a loss of €44.4million ($48.9 million) in its Q2 report. In the second quarter of 2018, the online marketplace recorded a loss of €35.6 million ($39.21 million).

The company has since been exploring strategies to cut its losses and fill the income statement with positive figures. Last year, it shut down operations in certain African countries on the basis of under-productivity. It also sold Jumia Travel in Nigeria and Jumia Food in Rwanda.

However, the team at Jumia think they have a solid strategy on how they intend to drive business growth in Nigeria. According to the Group’s co-CEO, Jeremy Hodara, Jumia is relying on the increased use of JumiaPay in Nigeria to help Jumia do more business in the country.

“We tried many opportunities and strategies. We take a lot of time to invest in lot of things we do. Challenges are the ability to grow new talents and sustain the business. Jumia is not positioned to be the only e-commerce company but to be the best in the space. Jumia is pledging to continuously improve so as to satisfy our customers and explore the e-commerce potential. We are here to stay.”

Jeremy Hodara

On the Jumia app, there are currently three payment options for users. Buyers can either pay with their card details, pay on delivery, or pay on the platform with JumiaPay.

While buyers have so far been able to pay with whatever option works for them, Jumia has been giving incentives in the form of discounts to users who pay with JumiaPay. So far, 2.1 million orders on Jumia that totaled €32 million ($35.24 million) were processed with JumiaPay in Q3 2019.

In 2020, Jumia intends to extend JumiaPay to third party platforms by processing payments for external platforms. The plan for JumiaPay also involves rendering financial services like loans and insurance to people with JumiaPay accounts.

While the plan of Jumia seems clear, the company would however require much more traction in volume and transaction for JumiaPay if the huge company will report a turnaround in its quarterly reports anytime soon.