Jumia’s Branded House: A Not so Brilliant Move?
Jumia made a bold leap into the Nigerian market in 2012 with the sole aim of redefining retail shopping in the country. This action engendered mixed feelings among many, as futurists applauded the unprecedented move into an untested space with skeptics holding a different opinion.
The skeptics did have a point knowing that since the inception of mankind, change hasn’t always been a good friend. Drilling down to a country like Nigeria that is deeply rooted in beliefs, religion and culture, change is not something you get with both hands. You either effect it by hook or crook.
Words on the street then bordered around trust (security and safety) and the low level of adaptation. To tackle this Jumia developed a clearly defined policy that guaranteed 100% secure transaction and even a pay on delivery options to consumers. This among other strategies eventually proved positive.
A white paper released last month revealed a tremendous increase in brand favourability and equity with the Jumia platform ranking as the 7th most visited website in Nigeria.
Innovative programs and customer loyalty campaigns also helped the brand battle misconceptions and perceptions of consumers towards e-commerce. A ready example is Jumia’s localized version of Black Friday which literarily ‘broke’ the internet. 2015 edition saw a site visit of 2.3 million Nigerians in 24 hours with products being sold out in less than 2 mins. This doesn’t absolve them of backlashes received from displeased customers who felt conned and deceived.
TRANSITION FROM HOUSE OF BRANDS TO BRANDED HOUSE
Kotler and Keller puts the house of brands strategy as the use of individual or separate family names while branded house strategy is the use of a centralized or umbrella company brand name in relating with the customers. Big companies like Microsoft employs the former strategy with products like Xbox, Skype and Bing operating in a decentralized format while Google applies the latter.
Jumia, Jovago, Kaymu, Lamudi and others are offshoots of the Africa Internet Group with Jumia being the most successful of these start-ups. Jumia thrives on heavy investment and brand credibility. This recent change essentially implies that other start-ups would leverage and directly benefit from these attributes.
The new structure: With Kaymu becoming Jumia Market; Jovago now Jumia Travels; Hellofood is now Jumia Food; Vendito now Jumia Deals; Lamudi now trades as Jumia House; while Carmudi is now known as Jumia Car. The effect of these brand adjustments mean that consumers can now access all these services using a single Jumia account, also prominent is the fusion of all their individual websites into Jumia’s website.
BRILLIANT OR NOT SO BRILLIANT MOVE?
Jumia, in its four years of redefining retail experience in Nigeria has been able to acquire a good number of loyalist and customers. Dealing in a once estranged digital space with Konga, doling out innovative campaigns and affiliate programs that position the brand as credible and trustworthy. With this in place Jumia decides to play the saviour who acquires the burden and excesses of other relatively unknown platforms which is good knowing that they can leverage on the credibility and recognition of the main brand.
On the flip side, Jumia is well known in the industry as an online shopping store and not a restaurant aggregator or a car purchasing platform. This I believe won’t easily sit well with the consumer. Winning in any industry requires focus, commitment to a known position and channeling of energy and resources into that chosen field, a deviation from that often incurs ripple effect, quite similar to my prediction on Star Lager Beer.
This begins to look like a Jack of all trade, Master of…, well that may be too quick to conclude. I am personally still trying to wrap my head around the difference between Jumia Market and Jumia (Shopping), knowing that the fundamental idea behind a market is for customers to locate products or services of interest and make payments for such. Reconciling Kaymu (Jumia Market) with his new name still comes out puzzling knowing that its direct competition is OLX but then again Konga is presently positioned as a market place whose competition is Jumia. I believe to an extent Jumia online shopping should have assumed the name Jumia Market while other sub-brands fall under it.
Mark Essien, Founder/CEO, Hotels.ng (Nigeria), sharing similar sentiments on his direct competition Jumia Travels says “This strategy of trying to leverage Jumia’s popularity to sell the other brands will work only partially. 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.”
All Eyes on Jumia: This move expands its scope of competition. The new positioning sets Jumia against competitors in Industries like Real Estate, Travel and Automobile. Deploying its resources on winning share of attention across these fields might be spreading out too tin with very little effect. Jumia looks strong on investments but fighting different battles at a time might not be too favourable with the possible outcome being the death of some of these sub-brands.
The notion behind a brand subsuming associated ventures is to simplify customers’ interactions with the brand, improve perception and ultimately increase brand equity. Time will tell if these new structure will pose as a threat to the growth of the brand or as a spring board to leap forward.
What do you think?