Jumia Expands to West Africa With Retailer Leroy Merlin

Pan-African eCommerce firm Jumia has agreed to sell retailer Leroy Merlin’s products in West Africa.

The agreement is part of Jumia’s plan to halve costs and extend its reach by the end of the year with the home improvement firm, as detailed by Bloomberg News Wednesday (March 22), 

Jumia CEO Francis Dufay told Bloomberg the company would sell Leroy Merlin’s tools and do-it-yourself items in Senegal and Ivory Coast, emphasizing reaching the hundreds of millions of consumers living in rural, agricultural areas.

“Jumia is pushing into these areas, we have the right suppliers and assortment of products, and a light logistics model to address those smaller pool of consumers,” Dufay said. “This would be much harder to do for bigger supermarkets and shops for instance.”

As PYMNTS reported last month, Jumia is trying to reach profitability by shrinking its losses and expanding its monetization efforts. 

When detailing its fourth quarter and full year 2022 results, the company said that its strategy to reduce losses and move toward profitability had begun paying off, with quarterly operation losses down 41% year over year and gross profit climbing 22% during the same period.

At the time, Dufay expressed optimism about “the early signs of success” the company saw in the quarter, which he said “only reflect a fraction of the actions” taken by Jumia as it stays focused on executing cost efficiency projects.

Among the cost-cutting measures the company has undertaken recently is the discontinuation of the Jumia Prime subscription service, which “in terms of consumer traction and stickiness fell short of our targets,” Jumia said.

The company has also shut down its food delivery operations in Egypt, Ghana and Senegal. The activity was subscale and comprised less than 1% of group gross merchandise volume (GMV) during the first nine months of 2022.

Because of a similar subpar performance which led to a less than 1% contribution to its total group revenue between Q1 and Q3 2022, Jumia has also suspended its logistics-as-a-service activity in several geographies, excluding Nigeria, Morocco and Ivory Coast, which have a more developed logistics infrastructure.

Last year, Jumia founders Jeremy Hodara and Sacha Poignonnec stepped down as the company shook up its leadership team. 

The company also closed its Dubai office last year to reduce costs — rents in Dubai are higher than places like New York and London — and to focus more on its operations in Africa. 

“As we are an Africa-focused company, we want our leaders to be based with customers, vendors and employees,” Dufay said.