Jumia Shuts Cameroon Office Amidst Claims of Operational Losses

Jumia Announces 58% Growth in Revenue in Q1 2019 Despite Fraud Accusation
A woman works at the packaging unit at a warehouse for an online store, Jumia in Ikeja district, in Nigeria’s commercial capital Lagos June 10, 2016.REUTERS/Akintunde Akinleye

African eCommerce giant, Jumia has closed down operations of its Cameroonian subsidiary, Jumia Cameroon. This is coming less than a week after Jumia released its Q3 financial report.

According to the company, the move is necessary as its current model is not suited for the country. But it, however, doesn’t rule out a comeback.

“We came to the conclusion that our transactional portal as it is run today is not suitable to the current context in Cameroon. We wanted to see how business evolved. We can come back, but for now we’re closing (to have) time to study the market.”


However, situations surrounding the company currently suggests this move may be an attempt by the company to cut back on its operational cost, having been suffering losses since inception.

The recently released report indicates that Jumia 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.

And these operational losses have been spurred by the company’s attempt to grow its various verticals in all its markets. And for a company yet to become profitable, that’s a huge concern.

Its recent poor run on New York Stock Exchange, which has seen it experience a significant drop in shares has not also helped matters.

Which is probably what moved the board to close its Cameroon subsidiary – in a move to cut down on the cost of operations and stop the massive bleeding of funds. And its Cameroon subsidiary is, unfortunately, the victim. It is reported that since last year, growth has sharply declined following the socio-economic and political crisis in the Central African country.

Before 2018, the space is reported to have been experienced strong growth.

This closure sees Cameroon become the 3rd Central African subsidiary to be closed following that of Congo and Gabon. The eCommerce company had also exited Rwanda last year, closing down its business save its food delivery service in the country.

All these sees the company’s African market reduced to 13 – Nigeria, Kenya, South Africa, Egypt, Ghana, Morocco, Uganda, Tanzania, Senegal, Rwanda, Ivory Coast, Tunisia, and Algeria.

If indeed the company is cutting down on costs especially for its eCommerce business – to reach its predicted profitability in 2022, this might be one of the early happenings. As such, fingers are crossed!

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