African eCommerce Hub Jumia Closing Dubai Offices to Cut Costs

eCommerce platform Jumia is closing its Dubai office to cut costs and focus on Africa.

The move comes a little less than a month after the departure of founders Sacha Poignonnec and Jeremy Hodara, and is happening as the company takes on a larger series of cost-cutting measures as it tries to reach profitability.

Acting CEO Francis Dufay told Bloomberg News on Saturday (Dec. 3) that managers will move to countries in their region, primarily to Morocco, Kenya and Ivory Coast.

“As we are an Africa-focused company, we want our leaders to be based with customers, vendors and employees,” said Dufay, who took over when the founders stepped down.

He added that he’s trying to reduce costs as rents in Dubai are climbing faster than rents in London and New York, while also trying to respond to the younger and more tech-savvy populations of its markets in Africa.

Hodara and Poignonnec announced their resignation on Nov. 7, a move that came with the appointment of Dufay and Antoine Maillet-Mezeray as the new executive vice president of finance and operations.

A little more than a week later, the company announced it was drastically scaling back projects that hadn’t shown clear viability, focusing more on proven revenue streams.

“We need much more focus in terms of scope of projects and the activities that we take,” Dufay said during an earnings call in November. “We cannot be sharp in our execution if we are spread too thin across too many projects. We need to stop projects that bring limited value to the platform and focus on what matters.”

The first casualty of these cost cuts was Jumia’s delivery service, Jumia Prime, a monthly subscription program the company had been testing, which offered free delivery to consumers.

As Maillet-Mezera told investors, “the results from this experiment, in terms of consumer traction and stickiness, fell short of our targets as the market is probably not yet mature enough, leading us to pause this initiative.”

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