Jumia travel in Africa: expanding the boundaries of the online travel agency business model

Abstract

Purpose This study aims to analyse the business model of Jumia Travel, an innovative online travel agency (OTA) that operates in African markets. Focusing on market conditions and consumer behaviour in sub-Saharan Africa, where barriers to e-commerce are strong and tourism is viewed as a non-essential activity, the study examines the ways in which Jumia Travel carries out its development objectives in Côte d’Ivoire and revamps the OTA business model in relation to market constraints. Design/methodology/approach The study uses a descriptive-qualitative method based on desk research analysis of corporate sources, including websites, annual reports, public interviews of managers and newspaper articles. It also draws on primary sources collected through interviews with the Jumia Travel Côte d’Ivoire country manager. Findings The research shows that the demand- and supply-side constraints of African markets compel Jumia Travel to acquire new skills and competencies to adapt to and capture the Ivorian travel market. In doing so, the company expands the boundaries of the traditional OTA business models found in developed markets, demonstrating the dynamic capabilities that drive OTA business model transformation when deployed in a technologically immature market. Research limitations/implications The Jumia Travel venture provides an insight into the constraints faced by an OTA at the bottom of the pyramid and in emerging markets and shows concretely what skills and competencies are required to overcome them. It is also a new experiment still in the early stages of development, and this limits the proper assessment of sustainability of its business model. Originality/value This study examines a unique experience: an unconventional OTA that concentrates exclusively on domestic and regional markets in sub-Saharan Africa. The business model lens brings into focus the operational limits and innovation opportunities of developing an e-travel business in the fast-growing markets of Africa, characterised by major supply-side constraints, the predominance of low-income consumers and a poorly structured travel industry. In this context, OTAs’ innovation challenge is no longer to disrupt the travel sector in differentiating from competitors, as was the case in the mature markets of the first world but to develop business processes suitable for operating in the constraint-based environment of emerging markets and capturing the rising demand for travel products. This involves co-creating value in linking African hotel providers and clients and increasing economic returns from this value through various business model adaptations designed for and with local consumers and partners.