Business model adaptation to institutional voids: The case of Jumia, the Amazon of Africa

Business model adaptation to institutional voids in developing countries is critical for the survival of firms seeking to explore the opportunities in these markets. However, extant literature has not articulated the central... [ view full abstract ]

Business model adaptation to institutional voids in developing countries is critical for the survival of firms seeking to explore the opportunities in these markets. However, extant literature has not articulated the central issues relating to how firms adapt business model to developing countries. We tackle this issue by taking the perspective of a developing country-based firm adapting a business model designed for developed economies to its local context. Based on a case study analysis of Jumia - an online retailing company in Africa, we show that a developing country-based firm cannot simply replicate a business model designed for developed countries in its local context, but has to adapt it with the aim of filling various infrastructural, regulatory and cultural voids of its home country. We find that the business model adaptation to these types of institutional voids in developing countries involves three phases consisting of legitimacy, localization, and consolidation phases.