Jumia CEO admits strategy errors in Africa

Jumia has spent 14 years building its e-commerce business across Africa, but this expansion came at a steep cost. By the end of 2025, the company reported accumulated losses of approximately $2.2 billion, according to its annual report.

A costly miscalculation in strategy

Temidayo Ojo, the CEO of Jumia Nigeria, discussed these financial struggles during a live discussion on the Broken Signals podcast. He admitted that the company made significant errors by attempting to apply Western business methods to African markets.

“We’ve made a lot of mistakes and lost a lot of money by trying to fit a Western approach into the African context,” Ojo stated. He noted that a strategy working in wealthier nations often fails where purchasing power is lower and infrastructure is weaker.

Adapting Strategy to Local Markets

Jumia’s total losses stem from years of investment in technology, logistics, and operations. However, Ojo’s comments highlight specific assumptions the company had to abandon. One major error involved misjudging what local consumers could afford.

Initially, Jumia focused on well-known international brands like Samsung and LG. While these brands were popular, their prices often did not match what many Nigerian consumers could pay. Ojo emphasized that African shoppers weigh purchases against household expenses and operate with limited funds.

“Once you understand that the typical African consumer’s spending is different from the West, you see that they are very price-sensitive,” he explained.

This realization led to a shift in product selection. The company began stocking more affordable alternatives like TCL, Hisense, and Aeon. Ojo reinforced this shift after visiting a factory in Shenzhen, where he saw brands like LG and TCL produced side by side. This experience taught him to look beyond brand names and focus on what customers could actually afford.

In just six months, Jumia’s inventory and fulfilment centers changed significantly. The company also reevaluated its delivery strategy. Ojo compared their logistics choices to building a luxury car versus a reliable, cost-effective vehicle.

“We asked ourselves: are we building a Rolls-Royce, or are we building a Toyota?” he said. The goal was to determine which aspects of convenience mattered most to customers and how much they were willing to spend.

For shoppers outside major cities, getting products at reasonable prices often holds more importance than receiving an order in just a few hours. Ojo noted that customers in smaller towns typically have fewer brands available and might need to travel long distances to buy everyday items. Therefore, Jumia’s strategy prioritized making products available in more locations without imposing high delivery costs.

Handling Complex Regulations

The challenge goes beyond getting products online. Jumia connects buyers with independent sellers on its platform while also handling logistics and payment services. This unique business model can be misunderstood by authorities accustomed to traditional retail setups.

Jumia has had to engage actively with regulators, organizing workshops to help revenue authorities understand how the platform operates. Ojo shared instances where authorities mistakenly classified the entire value of transactions as the company’s revenue, not recognizing that a portion belongs to the sellers.

The company also faces difficulties with data protection laws. Ojo expressed a desire to comply with local regulations but noted the challenge of unclear guidelines and the threat of strict penalties. Additionally, economic instability and shifting government policies have created hurdles for long-term planning.

Empowering Sellers Through JForce

Despite these obstacles, Jumia’s platform offers more than just online shopping. The company highlights JForce, a network of trained agents who introduce people to e-commerce and earn commissions. Ojo shared a success story of a seller who started as a JForce agent and built a business generating over $100,000 each month. This seller began from his home, set up an online store on Jumia, and purchased products only after receiving customer orders. This example illustrates how a marketplace can lower the cost of starting a retail business.

Ojo emphasized the importance of reaching more customers in existing markets rather than expanding into new ones. The company plans to open a new fulfilment centre in Abuja to serve the northern region of Nigeria better.

This strategic move aims to improve delivery times and reduce costs for customers in that area. Additionally, Jumia has seen encouraging growth in southern cities like Calabar, Bayelsa, and Delta.

Future growth and expansion

Jumia estimates that e-commerce penetration in Nigeria is around 5% to 6%, indicating significant room for growth. The company aims to triple its Nigerian business over the next three to four years.

Jumia’s net loss decreased to $61.5 million in 2025, down from $99.1 million the previous year, showing signs of progress in its financial performance.