Jumia has shut down operations in Tanzania in what the company says is a strategy to focus on resources in other markets in Africa.
The move is the latest, the e-commerce operator shut down operations in Cameroon as part of its ongoing portfolio optimization effort.
Currently, Jumia stands as the largest e-commerce player in Africa, operating in 12 of 54 African countries.
According to Quarz report, Jumia is struggling with the management issues with uneven growth having been cited across several markets which remain underdeveloped as far as digital payments, delivery and logistical infrastructure.
In its filing with the US Securities and Exchange Commission ahead of the Initial Public Offering (IPO), Jumia admitted there was “no guarantee” it will break even and become profitable in all of its African markets.
Jumia was launched in Lagos in 2012 and expanded to five other countries: Egypt, Morocco, Ivory Coast, Kenya and South Africa. It later launched offices in Uganda, Ghana, Algeria and Tunisia, and by 2018 it was present in 13 African countries, including Tanzania.
In 2015, Jumia generated USD234 million (Ksh23.9 billion) in revenue, which stands for a 265% growth from 2014. In 2016, Jumia became the continent’s first unicorn being valued over US$1 billion.
In April 2019, Jumia went public on the New York Stock Exchange (NYSE) and raised USD196 million (Ksh20.1 billion) in net proceeds. The share price, initially offered at USD14.50 (Ksh1,487), rose more than 200% in the first three trading sessions.
The company has advanced plans for a partial pivot to fintech as it looks to spin-off Jumia Pay, its in-house payments solution. In addition to payment processing for third-party users, Jumia Pay’s off-platform strategy will include facilitating payments through QR codes as well as powering mobile point-of-sale systems.
