Jumia just became less African again, after another recent woe.
Just two weeks after it quit operations in Cameroon, Jumia has shut down its business in Tanzania. Saying it needs to “focus resources” on other markets as part of an “ongoing portfolio optimization effort.”
Often called “the Amazon of Africa,” the company is looking to reduce operating costs by focusing on larger African markets where e-commerce is currently more viable.
This will mean that Jumia now operates in only 12 African countries, with Nigeria and Egypt as its largest markets. Although it’s still the largest online retailer on the continent, it’s shrinking contradicts Jumia, which positions itself as the first African tech firm to be listed on the New York Stock Exchange. It pitched its pan-African operations and ambitions as a core strength in pitch to investors.
But the company is struggling with managing operations, uneven growth and major losses across several fragmented markets that remain largely underdeveloped with respect to digital payments, delivery, and logistical infrastructure.
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No Guarantee it Will Break Even
Jumia admitted In its filing with the US Securities and Exchange Commission ahead of an April IPO there was “no guarantee” it will break even and become profitable in all of its African markets.
The firm has missed revenue estimates for the second time in three quarters, according to the results announced this month.
Like Cameroon, Jumia’s shutdown in Tanzania ceased abruptly. Last week, the company had claimed that it had no plans to pull out of more African markets.
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