In continuation of what appears to be a desperate move to cut back losses, Jumia has once again closed shop in one of its markets. This time in the Eastern African country of Tanzania after 5 years of operations there.
The news of this closure comes some days after the African eCommerce giant had shut down the operations of its Cameroonian subsidiary, Jumia Cameroon.
According to reports, the company says this closure is in a move to focus its resources on other markets.
While Tanzania has strong potential and we’re proud of the growth we’ve collectively seen stemming from Jumia’s adoption, we have to focus our resources on our other markets. This decision isn’t easy but will help put our focus and resources where they can bring the best value and help Jumia thrive.
This statement indicates that Tanzania might be the least performing country in the company’s current list of markets, hence its decision to put it on the chopping block. And as such confirms suggestions that the company is cutting back on its operational cost, having been suffering losses since inception.
Third-quarter reports released by the company shows that the ‘African Alibaba’ lost $55 million in the 3rd quarter of this year, bringing its total loss recorded for this year to $180.1 million – and about $1 billion since inception.
With an ambition to turn profitable by 2022 and a recent poor run on the New York Stock Exchange, such losses are a huge concern for the company. Which is probably why the company is aggressive in cutting back its operational losses – hence the closedown of its businesses in some markets.
Now, the Tanzanian closure brings its African market down to 12 – Nigeria, Egypt, Morocco, Kenya, Ivory Coast, South Africa, Tunisia, Algeria, Ghana, Senegal, Uganda and Rwanda.
If there will be another closure, it’s going to be soon. Which country will be next, is the question now.