Africa’s Amazon, Jumia has been having a good year, but is has announced it is suspended Jumia Prime service and its attendant unlimited free deliveries in several markets to cut cost.
Gross merchandise value however declined to $240.7 million from $252.7 previous quarter despite increasing from $238.1 million realised in the previous quarter.
Its operating losses also fell by 33% and gross profit rose by 29% compared to last year.
Despite having what appears to be a good year, Jumia is planning to implement changes that will reduce its operating costs.
First, it’s shutting down Jumia Prime, its loyalty programme that offered unlimited free deliveries on all orders in nine countries including Ghana, Nigeria, Egypt and Kenya.
Jumia is also increasing the minimum basket size threshold for free delivery. It will also suspend its logistics-as-a-service offering in selected markets that don’t have sufficient logistics infrastructure ready to support third-party volume. This suspension, according to Jumia, excludes Nigeria, Côte d’Ivoire and Morocco.
The company will also lay off staff at its Dubai branch and move senior leadership to markets where they can be closer to consumers.
Earlier this month, Jumia’s long-standing co-founders and co-CEOs Jeremy Hodara and Sacha Poignonnec stepped down. Managing director of Jumia Côte d’Ivoire, Francis Dufay, was appointed as acting CEO while CFO Antoine Maillet-Mezeray was appointed as executive vice president of finance. Both executives were charged with reducing operating losses, and it appears they’re already at work.