How Jumia Makes Money: The Revenue Model of Jumia

Jumia, Africa's top e-commerce site, provides a diverse range of products and services. Jumia has developed fast since its inception in 2012. In this blog article, we will look at Jumia's revenue model and how they make money. We'll also look at some of the difficulties Jumia has experienced over the years. So, read on as we bring more lights on this aspect.

What Is Jumia?

Jumia is Africa's leading e-commerce marketplace. Sacha Poignonnec and Jeremy Hodara, two entrepreneurs, launched the company in 2012. Jumia is available in 14 African countries, including Nigeria, Egypt, Morocco, Ghana, the Ivory Coast, and Kenya.

Electronics, fashion, home & living, food & grocery, beauty & personal care, and baby & kids are among the products and services offered by the company. Deals of the Day, the company's first product, was a daily deal website.

Jumia established its e-commerce platform in 2013 and expanded into other African countries. Jumia raised $150 million in 2014 from investors such as Rocket Internet, Axel Springer, and MTN Group. Jumia purchased Kaymu, an African internet marketplace, in 2015. Jumia went public on the New York Stock Exchange (NYSE) in 2016, raising $196 million.

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Objectives Of Jumia

To be Africa's leading e-commerce platform.
To offer African consumers a diverse selection of products and services.
to enter new African markets

How Does Jumia Make Money?

Jumia generates revenue by charging sellers a commission on each sale made on the platform, generating advertising revenue from brands who want to promote their products on the site, and collecting subscription fees from users who sign up for Jumia Prime, a subscription service that provides users with free shipping, exclusive deals, and other perks.

Revenue Model Of Jumia

Jumia's revenue model is plain and uncomplicated. Jumia generates revenue from three sources: commissions, advertising revenue, and subscription revenue.

Jumia charges vendors a fee on each sale completed through the platform. The commission is different for each product category. Jumia, for example, levies a 12% commission on gadgets and a 20% commission on apparel items.

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Jumia earns advertising revenue from brands and businesses that wish to promote their products and services on the platform. Advertising revenue accounts for a modest portion of Jumia's total revenue.

Membership revenue: Jumia offers a subscription service called "Jumia Prime" that provides subscribers with free shipping, special bargains, and other perks. Subscribers pay a $20 annual charge for the service.

What makes Jumia so successful?

The following are some of the aspects that have contributed to Jumia's success:

Large potential customer base

Africa has a population of over one billion people, providing Jumia with a big potential client base.

A growing middle class

The number of Africans with disposable income is increasing. This is due to Africa's economic expansion and rising living costs.

Mobile internet usage

Over 60% of Africans use the internet using mobile devices. This facilitates online purchases of products and services by consumers.

Improved logistics

Jumia has expanded its logistics network throughout Africa, making it easier for customers to receive their products on time.

What Are The Challenges Of Jumia?

Jumia has experienced numerous obstacles since its debut in 2012. Among these difficulties are:

Logistics is one of Jumia's most difficult problems. The organization must figure out how to move things from sellers to buyers as quickly and efficiently as possible. This is particularly challenging in Africa, where infrastructure is less developed than in other parts of the world.
Fraud is another issue that Jumia has had to deal with. People have placed orders on the platform and then refused to pay for them when the things are delivered. Jumia has had to implement a lot of safeguards to prevent and detect fraud.
Jumia is also up against intense competition from other e-commerce sites like Konga and MallforAfrica. These businesses are well-known in the African market and have a huge customer base.

Despite these obstacles, Jumia has continued to expand rapidly. The company presently has a presence in several African nations and over two million active clients.

Frequently Asked Questions on How Jumia Makes Money

What is Jumia pay?

Jumia Pay is a payment network that lets users pay for online goods with mobile money, debit/credit cards, or bank transfers.

How does Jumia pay work?

Jumia rewards vendors on a commission basis. Each sale made on the platform is subject to a commission charge by the company. The commission is different for each product category. Jumia, for example, levies a 12% commission on gadgets and a 20% commission on apparel items.

How much does Jumia charge sellers?

The commission is different for each product category. Jumia, for example, levies a 12% commission on gadgets and a 20% commission on apparel items.

How does Jumia operate?

Jumia operates an online marketplace where sellers may sell their goods and services to buyers. The company also offers a subscription program known as "Jumia Prime," which provides subscribers with free shipping, special bargains, and other perks.

What are the products sold on Jumia?

Jumia sells a wide range of items and services, including electronics, fashion, home and kitchen, baby and toys, sports and fitness, books and media, beauty and health, cars, phones, and tablets.

Is Jumia making profit?

Yes, Jumia is profitable. Jumia generates revenue by charging sellers a commission on every sale, collecting advertising revenue from brands and enterprises, and collecting membership fees from Jumia Prime users.

Conclusion on How Jumia Makes Money

Finally, the company has made money through charging sellers a commission on each sale, collecting advertising revenue from brands and enterprises, and collecting membership fees from Jumia Prime users. Jumia has evolved to become the largest internet retailer on the African continent. Jumia has experienced logistical, fraud, and competition issues, but has continued to grow and expand into new regions.

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