TANZANIA – Jumia, leading e-commerce player in Africa ceased operations in Tanzania on Thursday, November 27th as it continues to review its portfolio.
Jumia said it would continue to serve vendors and customers via its classifieds business.
The online retailer, which has seen its share price plummet since a Wall Street debut in April, also suspended its e-commerce business in Cameroon on Nov. 18 firing all its staff amid mounting losses.
The closure in Cameroon, which started in 2014 comes a few months after an alleged fraud which cost the business up to US$1 billion.
In 2017, the online retailer closed its Rwandan e-commerce business over quality issues, focusing on its food delivery services in the country.
The firm further says it is shifting to focus more on its payment platform, Jumia pay while cutting back on the e-commerce business.
Additionally, there is unconfirmed information that the platform is mulling to pull out of Congo and Gabon.
“We have to focus our resources on our other markets. It is more important now than ever to put our focus and resources where they can bring the best value and help us thrive,” the company said in a statement.
With an e-commerce business similar to Amazon’s and a classified portal like Alibaba’s, Jumia sells its own stock and takes a cut of third-party transactions on its website.
In its third quarter the e-commerce posted third-quarter revenue growth of 19% (€40 million) and increased its active customer base 56% to 5.5 million from 3.5 million over the same period a year ago.
Jumia’s Gross Merchandise Value (GMV), the total amount of goods sold over the period, grew by 39% to €275 million. The online retailer nearly doubled its orders from 3.6 million in Q3 2018 to 7 million in Q3 2019.
JumiaPay digital finance product, saw growth with total payment volume increasing 95% to €32 million in Q3 2019 from €16.4 million in Q3 2018.
This is significant, as the company has committed to generate more revenues from digital payment products and offer JumiaPay as a standalone service across Africa.
The overall pattern of growing revenues and customers YoY has been consistent for Jumia.
But so too have the company’s losses, which widened 34% in 3Q 2019 to €54.6 million, compared to €40.6 million. Negative EBITDA increased 26% to €45.4 million from €35.8 over the same period in 2018.
Jumia pegged a large part of the spike in losses to an increase in fulfilment expenses due to more cross-border goods transactions (with higher shipping costs) on its platform in 3Q 2019.
The company will now operate in 12 countries including Kenya, Ghana, Senegal, Nigeria, South Africa, Egypt, Morocco, Uganda, Rwanda, Ivory Coast, Tunisia, and Algeria.FacebookTwitterLinkedInWhatsAppEmailSMSCopy Link