Jumia shuts down operations in Tanzania

Jumia, the largest e-commerce operator in Africa, shut down its operations in Tanzania just a week after a similar move in Cameroon.

Jumia cited the need to reduce its operating costs by focusing on larger African markets where e-commerce is more likely to become successful.

With Egypt and Nigeria counting as the largest markets, Jumia is currently operating in 12 African countries remaining the largest e-commerce operator in Africa.

According to Quartz, the company seems to be struggling with managing operations and uneven growth across across several sparse markets that are still very underdeveloped in terms of digital payments, delivery and logistical infrastructure.

In its filing with the US Securities and Exchange Commission ahead of the IPO, Jumia admitted  that there was no guarantee that the market will become even and become profitable in all of its African markets.

The shutdown of its  market in Jumia was unexpected because last week, the company had claimed it had no plans of closing down on more African markets.

This has raised questions over what awaits smaller markets such as Uganda and Rwanda.

Jumia’s plan to cut down their losses and boost their revenues goes beyond pulling out of smaller markets.

The company has advanced plans for a partial pivot to fintech as it looks to spin off Jumia Pay, its in-house payments solution.

They will also include payments through QR codes as well as powering mobile point-of-sale systems.