BrandArena: Why Jumia Travel Shut Down in Nigeria

Tuesday 10 December 2019

Why Jumia Travel Shut Down in Nigeria

eCommerce giant, Jumia, has continued with its cost cutting measures and change in focus by offloading its Hotel & Flight Marketplace, Jumia Travel in Nigeria and other markets across Africa.

It has entered a partnership with online travel agency, Travelstart to continue to promote Jumia Travel’s travel category. Travelstart will be responsible for the sales, fulfilment and customer service aspects of Jumia Travel online booking websites in all its operating territories .

According to Joe Falter, EVP Jumia On-Demand Services in a statement; ” “We have a strong belief in the potential of the online travel industry and travel portals in Africa, and have built a strong platform across our markets to address this opportunity. In TravelStart, we have found the perfect partner to build on the success Jumia Travel has achieved so far. While we will continue to promote the travel category, Travelstart will be responsible for the operational side of the business. The travel ecosystem in Africa will be further energised by this partnership”

“This partnership will ensure we remain hyper focused on our growth and path to profitability as we reinvest our resources in our key markets, services and technology to create the best customer experience in Africa and allow Jumia to thrive” added Falter.

This action is certainly part of the cost cutting measures of the ecommerce giant as it is seemingly offloading businesses so as to focus on growth and reduction of financial losses. Within the last couple of weeks, Jumia has suspended its ecommerce business in Cameroun, exited Tanzania and reduced its staff strength in Kenya.

Its 3rd quarter results for the period ending 30th September 2019 showed a 34% increase in the company’s losses from €40.6 million in Q2 to €54.6 million in Q3 prompting it to embark in these cost cutting measures.

According to Stephan Ekbergh, CEO of Travelstart, “Twelve thousand customers travel with us daily. Being Jumia’s exclusive distribution partner will help even more travellers in Africa  unlock high quality online travel services.”

Travelstart, which operates in nine African countries, will use the partnership to tap new customers in markets where digital is emerging.

The affected employees will be paid their severance packages and will be offered job placements in Travelstart, Jumia Food and Jumia Mall.

Founded in 2015 as Jovago, it rebranded to Jumia Travel in 2016.

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