By Jonah Nwokpoku
Reactions have continued to trail the announcement, last week, by e-commerce giant, Africa Internet Group, AIG to subsume all its entire ventures under the Jumia brand.
Some industry analysts and operators who spoke to Vanguard said the move may help the fortunes of the other AIG ventures. Some others described the move as a huge experiment that may pose significant risk to the survival of the AIG brand in Africa.
Some, on the other hand said the e-commerce giant is just beginning to roll out an exit strategy.
Recall that last week, AIG announced it has subsumed its entire brands in Africa under its online retailer, Jumia.
Under the new brand harmonisation regime, the other entire Jumia sister ventures will shed their identities and assume new identities anchored on Jumia.
The main online retailer will remain Jumia, the marketplace, previously Kaymu will now be known as Jumia Market, online travel platform, Jovago, becomes Jumia Travel, while online real estate venture, Lamudi becomes Jumia House. Other ventures include Vendito, now Jumia Deals, Carmudi has now become Jumia Cars and online job marketplace is now Jumia Jobs.
In this new arrangement, customers will be able to use single account to access all Jumia brands services. All the other brands will also cease to maintain separate websites as all access will be through the main Jumia website. This rebranding affected only the ventures in Africa as some of these brands with presence in Asia and Middle East, like Jovago and Kaymu will continue to operate in these names.
However, each of the ventures will continue to maintain distinct operations.
At a press conference announcing the rebranding in Lagos, Jumia Nigeria’s Chief Executive Officer, Juliet Anammah said the move was just another strategy for the group to “drive convenience and make life much easier for Nigerians.”
Global CEO of Jovago, now Jumia Travel, Paul Middy said “the move creates endless opportunities for brands under AIG.” He added the move became necessary as the other ventures need to ride on Jumia’s popularity and success to thrive.
Lamudi, Jovago may suffer
But reacting to the development, Founder/CEO, Hotels.ng, Mark Essien, said while the move will impact positively on the fortunes of some of these ventures, it will not hold true for some, especially those that are not directly related to online shopping.
He said: “I think it is a smart move for some of their brands, in particular some of those brands that have direct relationship with shopping like Kaymu, Carmudi, Hellofood, etc. But the other brands I think may suffer are Lamudi and Jovago.
This is because when you are renting an apartment or booking a hotel, it is not your regular e-commerce, it is not like you are going to buy something like you would if you are visiting Carmudi to buy a car.
When people see Jumia, they associate it with buying something; it is difficult to reconcile it with the idea of also booking a hotel through the same Jumia. It is like walking into a supermarket to book a flight. It just does not flow naturally.”
According to essien, “This strategy of trying to leverage Jumia’s popularity to sell the other brands will work only partially.
Amazon, which is the biggest online retailer in the world tried running a hotel booking website in 2015 called the Amazon Destination but shut it down barely six months after launch.
Amazon Destination could not survive because in spite of the brand, Amazon, the Amazon Destination brand was built for something else. And I think that a very strong brand, if used for something else can actually have a negative impact.
And globally, there is no example of this combination working for both hotels booking and apartment renting and that an e-commerce website will successfully have a sub-brand under it. So, I think it is a very risky move. This move is one big experiment in this market and all of us will be watching and if it works out, maybe everybody will follow the same method.”
AIG implementing exit strategy
Also speaking, AIG former employee who did not want to be named, said: “AIG is just implementing an exit strategy. If I am looking at it from an investment point of view, this may bring in more money eventually. Imagine if you bring all the other brands that have their own markets merging as one.
That is a huge chunk of the African market. So this strategy will bring in more money than trying to sell the individual ventures. I think that is the way it is going to end. They are going to make Jumia as huge as they can plus all the other ventures put together, making the AIG brand so huge and then they are going to sell it. This strategy is just to make sure they get as much as they could from their investment.”
Another AIG former employee who also preferred anonymity said: “I am sure that AIG has weighed the sustainability of this strategy. You know that before Nigeria, Kaymu in some other countries have already become Jumia Market. But from onset when they started the idea of Jumia Market, it was confusing and didn’t make any sense because you cannot have a marketplace in a sister company that is doing almost exactly what the sister company is doing – Jumia and Kaymu (now Jumia Market) operate the same business model. There will be a clash between the two. The idea that Kaymu will become Jumia Market and is supposed to co-exist with Jumia which is also a marketplace does not seem to make much sense.”