Jumia suddenly closed down its operations in Cameroon on Monday, 18th November 2019. This unpredicted action left its entire staff in limbo.
There was no public announcement or statement from its management or its CEO. Twitter user @africstechie broke the news on the micro-blogging site, stating that the brutality of the announcement echoes the management style of the now-defunct company.
Speculations about why Jumia Cameroon Operations Seized
She mentioned that one reason why the company failed is due to its disrespect for staff, neigbhours, especially in its early months. They fired staff at will, were inflexible in adapting to the market and didn’t pay attention to feedback from the field.
The company often changed managers, with most without proper knowledge of the market.
She claimed also that Jumia wasn’t interested in the long term business. Instead, they were focused on meeting a few Key Performance Index (KPI) to look good for investors or possible acquirers.
Jumia is also criticised for not living up to the African startup tag it portrays itself as. This is because it sidelines locals from core staff roles and active decision making. Thus, they are reduced to bit-part roles because of this.
The company’s operations in Nigeria are also beclouded with fraud and allegations of fraudulent activity. Before its operations in Cameroon stopped, Jumia was said to have struggled with making payroll.
Jumia numbers don’t quite add up
The company launched its IPO on the New York Stock Exchange (NYSE) on April 12, 2019. But it refused to reports its earnings by country or by the line of business. This fueled suspicion that its numbers don’t quite add up as it wanted investors to believe.
Jumia was first launched in Lagos in 2012 and expanded to five other countries. These countries are Egypt, Morocco, Ivory Coast, Kenya, and South Africa.
In 2014, the company launched offices in Uganda, Tanzania, Ghana, Cameroon, Algeria, and Tunisia. By 2018, it was present in 14 African countries.
In June 2013, Jumia launched Jumia Travel, a hotel booking platform, and Jumia Food, a food delivery platform. It launched Jumia Deals in April 2015. In 2017, Jumia launched Jumia One, an app that enables customers to pay bills such as airtime. The same year, Jumia launched Jumia Pay, a secure payment for people to shop on all Jumia services.
This was followed by the Jumia lending program, an initiative that allows its vendors to access business loans. Jumia would later partner with Amadeus technology to launch a platform that enables people to book flights.
In South Africa, Jumia operates under the brand name Zando (zando.co.za), focusing only on online fashion retail.
The stock exchange responded to the news of the Jumia shutting down operations in Cameroon. That same night, stocks finished trading at 5.28 USD which is −0.21