Pan-African telecommunications service provider Axian Telecom is continuing to make news, this time with the announcement that it has acquired an 8% stake in African e-commerce giant Jumia.
While few details are available, Axian has declared that it remains committed to supporting the development of Africa’s digital economy, including through investments in companies like Jumia. It adds that such investments complement its core mission of delivering accessible, innovative, and inclusive digital services across the continent, mainly via its Yas (mobile) and Mixx by Yas (fintech) brands.
Of course, as the Techpoint Africa news service points out, Jumia has been facing challenges, most notably in its financial performance. Baillie Gifford, once its largest institutional investor, recently sold off its shares in the company, just as the firm announced declining revenues for the first quarter of the year.
The company’s recent emphasis has moved away from aggressive customer acquisition to cost-cutting measures and customer retention, which has helped reduce costs but not helped revenue generation at a time when the competitive landscape is seeing more entrants.
Hence, one assumes, Techpoint Africa’s observation that Jumia is ramping up the number of China-based merchants on its platforms as it struggles to counter competition from Chinese e-commerce giants Temu and Shein.
Also, as many readers will probably be aware, last October Jumia Technologies announced plans to exit the South African and Tunisian markets at the end of 2024 to concentrate on markets with stronger growth potential.
However, Axian Telecom clearly sees a future for the brand. As Hassan Jaber, CEO of Axian Telecom, says: “We believe Jumia’s achievements in digital retail infrastructure and fintech through [payment solution] JumiaPay, as well as its logistics strengths, place it in a position to promote financial and economic inclusion for the communities which it serves. This unique position makes Jumia a very attractive investment for Axian Telecom, and one which is aligned with our core values.”
