Jumia, a popular e-commerce platform in Africa has suspended its online retail operations in Cameroon. Although major business activities will halt, Jumia will continue supporting buyers and vendors in Cameroon via its Jumia Deals.
According to a statement from the company, the reason behind the exit is that ‘they were not suitable to run a business in Cameroon. The statement read, “We concluded that our transaction portal is not suitable to the current context in Cameroon”.
A source at Jumia told Reuters that it had chosen to prioritize growth rather than profitability in Cameroon. Unfortunately, the strategy did not pay off. “We want to see how the business evolved. We can come back, but for now, we are closing to have time to study the market,” said the undisclosed source.
See Also: Jumia Q3 Report reveals It’s 636,000 Customer Gain & $55 Million Loss
Cameroon has been facing economic challenges of late. The International Monetary Fund projected that economic growth would decline from 4.1% to 2018 to 3.9% this year, as a result of the slow performance of the non-energy sector.
Before Jumia, two other e-commerce platforms had exited the market. Cdiscount quit in 2016 and Afrimarket followed suit earlier this year. Some of the prominent factors include macroeconomic instability due to a decline in global commodity prices, insecurity, and crisis.
Jumia sustaining its e-commerce verticals in 14 countries across Africa is very costly, especially in an economy that majorly depends on oil exportation. Although Jumia contributed to job creation and solved the needs of customers and vendors, it decided to withdraw services and re-strategize.
Jumia has concluded that running the e-commerce business in the country was unprofitable. Despite the decision to suspend activities in Cameroon, Jumia continues to operate in Nigeria, Egypt, Morocco, Kenya, Côte d’Ivoire, South Africa, Tunisia, Algeria, Ghana, Senegal, Tanzania, Uganda, and Rwanda.
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