After Cameroon, Jumia Abandons Yet Another African Market

Just a few days after word got out that the biggest e-commerce player in Africa, Jumia, has called it quits with its core e-commerce business in Cameroon, the company seems to have continued in that path by abandoning yet another African market.

According to a report, it appears Jumia has suspended operations in Tanzania — a market it entered five years ago — in what looks like a continuation of a scaleback on Jumia’s e-commerce operations across Africa.

Per a statement supposedly seen by Techawk, Jumia has shut down its operations in Tanzania in order to focus resources on other markets.

The statement reads: “Based on our review of the path to success, we have made a difficult decision to cease our operations in Tanzania as of 27th Nov 2019.”

“While Tanzania has strong potential and we’re proud of the growth we’ve collectively seen stemming from Jumia’s adoption, we have to focus our resources on our other markets. This decision isn’t easy but will help put our focus and resources where they can bring the best value and help Jumia thrive.”

As was the case with Cameroon, the statement adds that: “Jumia will continue to support buyers and vendors through our classifieds portal, previously called Jumia Deals, which will now be the main portal, jumia.tz. Thousands of buyers and vendors transact through this portal and we believe it will continue to become increasingly relevant in the future.”

With Cameroon and now, Tanzania, out of the picture, Jumia now has “e-commerce” presence in 12 African markets including Nigeria, Kenya, South Africa, Egypt, Ghana, Morocco, Uganda, Senegal, Rwanda, Ivory Coast, Tunisia, and Algeria.

And it is likely that Jumia would call it quits with e-commerce in a few other African markets as the e-commerce giant attempts to arrest a cash deluge that has seen it accrue almost USD 1 Bn in losses since starting things off in 2012.

The so-called Amazon of Africa appears to be seeking ways to cut its losses and make profitability more likely. And closing down its business in some of its “less attractive” markets has often been talked up as an option that is vital to the “cutting running costs” objective.

Jumia’s recently released Q3 2019 report shows that it is nowhere near profitability despite making a revenue of USD 44.2 Mn. And that’s because the losses keep rising. In the Q3 report, the loss stood USD 55 Mn; higher than the USD 45 Mn it lost during the same period in 2018.

Essentially, it’s now more about where and when Jumia is likely to close shop next than if the company is going to. And that’s because Jumia hinted it the Q3 report that it might have to scale back on e-commerce and explore a more promising fintech play, in an attempt to lift its beleaguered business which is also mired in a post-IPO mess.

Featured Image Courtesy: FT