Again, let me say, I don’t like jargons, but the word “Pivot” is some word we can’t avoid in this tech business. When a business model is not working, sub-optimal or not gaining sufficient traction, the CEO and the team pivot to a plan B. Essentially, pivoting is jettisoning your initial model and transiting to a totally new or similar business with some iterations.
From this description, it is not uncommon for a startup (this time, I mean a new business) to pivot! The founders might have made certain assumptions about the market and the opportunity, until the street teaches them something different. So, in other to survive, it is imperative for the new business to pivot, or adapt its model to suit consumer needs. After all, you are in business for them.
I don’t take pivoting lightly. It is indeed a very delicate process. Much more than the process, when the CEO or a team decides to pivot, and they commit their resources to the process, it shows the mental strength of the team. They are humble enough to correction from the market and tweak their business model. They are not bent on their ways especially when the market or available data is saying something totally different. A lot of businesses have died or become irrelevant because they did not take learnings from the market!
But, when a mature company pivots… I am not sure what to make of that! Please understand the context. A mature company is expected to have figured out the intricacies of its business to a large extent, its niche, pricing, key revenue drivers, efficiencies amongst other. As such, we do not expect any drastic change from the current business model.
I am aware of the frightening speed with which the business environment evolves. Doing business in 2017 is totally different from 1929. In fact, these days, you approach each day as it comes, and you prepared for the next 50 years today. Things are changing really fast, so should businesses. Especially those that want to remain relevant.
As a consumer, I don’t want to see your business change too frequently. So, how do we expect a mature and growing company adapt to its changing business environment?
Reviewing Jumia’s model…
Jumia started as one of the pioneer online retail outlets in Nigeria. It then pivoted to becoming an online marketplace. The business then scaled to start additional brands to address different market needs – Kaymu, Jovago, Lamudi, Carmudi, and Hellofood (I will write about scaling in my next post). Jumia remained the biggest and most valuable brand, hence the founders and the team decided to ride on this, thus rebranded all the supporting product and platforms. Kaymu became Jumia Market, Jovago – Jumia Travel, Lamudi – Jumia House, Carmudi – Jumia Car, and Hellofood became Jumia Food.
In furtherance of its restructuring effort, it subsumed the Jumia Market (Kaymu) into the larger Jumia brand. Effectively killing the Kaymu brand!
Earlier in the month, there are unconfirmed reports that Jumia might be looking to acquire or partner with a grocery and fresh food ecommerce business (Following after Konga, its Arch rival in this ecommerce business).
Now, Jumia is creating “Jumia One” as a one-stop-shop for most (all) of JUMIA’s e-commerce offerings as well as other day-to-day products such as airtime and payments. Did you guys notice AIRTIME and PAYMENT? Yes. Jumia has now added payment to its service offerings!
So what’s the catch? Jumia is essentially creating a Super App to address most of consumers’ day to day and frequent need. So take for example, I downloaded the Jumia One App because I needed to rent a house (Jumia House), I can effectively furnish my house from the same App (Jumia Mall), buy my car (Jumia Car) Pay my Eko Disco and Cable TV bills and Subscriptions (Payment).
Jumia is looking to increase its monthly active users, and I guess it has figured out a way to do this!
Potential Challenges
The Size of the App: The App might be too large for many cheap (I mean Affordable) smartphones that have flooded the Nigerian market. Since the customer only requires 1 or 2 of the services being offered by Jumia One per time, the consumers might be unwilling to download that large App if it will restrict them from downloading other useful Apps. The App might also slow down the performance of the device, thus offering additional incentive for uninstalling it!
Navigation: Jumia One need to ensure that the navigation within the App is smooth and less complicated. If not, potential customers might have a tough time figuring out how to get what they want.
Conclusion
I am sure that the management of Jumia never expected me to download 6 different apps on my phone. Hence Jumia is creating a single access point to all its services. All I need to do now is to download a single app that gives me access to almost everything Jumia has on offer. I think it is a solid approach to creating a sticky product, grow its active monthly user base and probably layer on additional services including savings (Maybe a Save as you Spend type of a thing), Expense Tracking amongst others
This strategy should be pursued with caution.
Happy Entrepreneuring!
