Business News
Jumia suspends Cameroon, Tanzania operations in two weeks
Jumia Group has suspended its e-commerce operations in Tanzania just a week after it did the same in Cameroon.
In two weeks, Jumia Group has suspended its e-commerce operations across two nations. A week ago, the e-commerce firm shut its business in Cameroon, a development that dismayed its customers in the Central African state.
The customers and clients of the African brand in Tanzania were also shocked when they found that the company has suspended operation in the East African nation too.
What it means: Jumia has shut down operations in five African countries. They are Gabon, Congo, Rwanda, Tanzania, and Cameroon.
Jumia reportedly suspended operations in Tanzania and the other African countries to focus resources on locations where revenue potential is higher. The company is now concerned with the markets that offer better value rather than merely expanding its operations in countries where purchasing power is low.
Was shutdown expected?
The shutdown in Tanzania didn’t come as a surprise to some, especially Nairametrics, which listed the East African country as the next possible target.
The surprising thing is that the news broke sooner than expected. Also, the manner it happened in the two countries could be attributed to the fact that the company’s workers in both countries were allegedly sacked.
Last week, Jumia, in a statement released after it shut down in Cameroon, said its model of operation wasn’t suitable for the Central African state.
[READ MORE: Cameroon shutdown: Techpreneur picks holes in Jumia’s operations]
Why Jumia exited Tanzania
In a statement issued on its shutdown in Tanzania, Jumia said it wanted to focus on markets that help it to thrive. One of such markets is Nigeria, which was Jumia first stop in Africa.
In a statement issued and reported by Reuters, stated, “We have to focus our resources on our other markets. It is more important now than ever to put our focus and resources where they can bring the best value and help us thrive.”
But while the e-commerce operation will cease to exist in Tanzania, the company will continue to offer merchants (sellers) and buyers a platform, classified portal, for offline transactions.
Where next for Jumia’s hammer
The question now is, where next?
It is believed that Nigeria, Egypt and South Africa are key revenue drivers of the e-commerce firm but countries like Uganda and Senegal are considered as some of the smaller markets in Jumia’s portfolio. Consequently, as previously reported, the workers in these smaller markets will remain jittery until their market picks.
What this means
In its early days, Jumia took the path of growth, neglecting profit. But this review of resources shows the company is retracing its steps to profitability while sacrificing growth rate or expansion of services across Africa.
The shutdown is an attempt to cut down on its operational cost and losses as it plans to meet its profitability projection by 2022. Jumia’s operating loss increased by 34.6% from €40.6 million in the third quarter of 2018 to €54.6 million in the third quarter of 2019; since entering the e-commerce business in 2012, the company has lost about N362.3 billion ($1 billion).
[READ ALSO: Konga’s Sim Shagaya reignites e-commerce war as he reacts to Jumia’s scandal]
How does this play for investors?
The continuous shutdown supports the argument that Jumia grew too fast beyond its capabilities. However, this growth has been the unique selling point which investors have found appealing in Jumia.
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Apapa gridlock: Sanwo-Olu explains how his administration solved the problem
The Governor said the electronic Call-Up was designed to permanently address the movement of trailers in and out of the ports.
The Lagos State Governor, Babajide Sanwo-Olu, has explained how his administration in partnership with the Nigerian Ports Authority (NPA) and other stakeholders in the maritime sector was able to get the heavy articulated vehicles off the road around the Apapa axis and improve traffic along that corridor.
This is as the governor has warned that the state government would resist any attempt by individuals and maritime operators that may want to reverse the progress being recorded along the Apapa corridor.
This disclosure was made by Sanwo-Olu on Wednesday while speaking at the formal hand over of newly improved 3 traffic-prone junctions along the Lekk-Epe expressway.
The Governor said the electronic Call-Up System launched, last Saturday, in the Apapa seaports was designed to permanently address the movement of trailers in and out of the ports, and bring about traffic improvement along the corridor.
What Governor Babajide Sanwo-Olu is saying
While sharing the details, the Governor described the progress recorded in Apapa as a hard-won, disclosing that it took the State Government over a year to bring together all stakeholders on the discussion table to agree on a far-reaching approach to permanently address the problem.
Sanwo-Olu said, “What we are seeing is the beginning of the lasting solution we have brought to Apapa. Our appeal is that we are not out of the problem completely yet. Our citizens can now see that a journey that took them three hours can, indeed, take between 15 and 20 minutes to commute. Everyone can now see that when we work together, indeed we can solve our problems internally.
“We have taken some troublesome people that are benefiting from the gridlock out of the way. Whatever they were earning illegally has been taken away from them. We know they will want to make an attempt to fight back. We will not stop at anything to ensure that anybody that tries to retract the progress or wants to take us back to gridlock in Apapa will be fought against. We will bring out their names and shame them.”
The Governor vowed that any corporate organisation, security operative, NPA or State Government official who attempts to circumvent the newly instituted traffic procedures around the Apapa seaports would be named and shamed publicly.
The Governor said the State was serious about bringing a lasting solution to the Apapa congestion, stressing that the Government could no longer condone the careless attitude of truckers clogging the highways with heavy-duty vehicles.
He said part of the State’s efforts was to approach the Federal Government for the unbundling of the inefficient Presidential Taskforce on Apapa gridlock and took over the traffic management in the area.
Sanwo-Olu added that State Government also met with stakeholders, including the Federal Ministry of Transportation, Maritime operators and seaports unions.
He said: “I commend NPA’s Managing Director and management for working with us on this agenda. My appeal is to other stakeholders in the maritime sector who have not signed up on the electronic Call-Up System we have embarked on. I call the big logistics companies, including Sifax, Dangote, Flour Mills, Tunde Folawiyo and others, to come and collaborate with us on this progress.
“Let us have a system that our citizens will be proud of. We will stop at nothing to sustain the progress achieved. Our team will be working round the clock to keep the system working. This is one of our modest efforts to deliver what we promised in solving traffic and transportation challenges. We will not relent in doing anything required to ensure traffic improvement in Apapa.”
What you should know
- Following the withdrawal of the Presidential Task Force on port congestion, the Lagos State Governor, Babajide Sanwo-Olu, set up a Special Traffic Management Team to resolve the traffic gridlock in and around the Apapa corridor.
- The Electronic Truck call-up system, Eto, which was designed and launched by NPA for the management of truck movement and access to and from the Lagos ports and to end the gridlock in and around the ports, formally took off last weekend.
- During the implementation of the new system, all trucks doing business at the ports will be required to park at the approved truck parks until they are called up into the port through the Eto app.
ATTEMPTS TO BRING BACK GRIDLOCKS ON APAPA CORRIDOR WILL BE RESISTED, SANWO-OLU VOWS
•Threatens To Publish Names of Uncooperative Stakeholders
•Governor Hands Over Three Improved Junctions, Ogombo Drainage In Eti Osa@jidesanwoolu#LASG
More.. https://t.co/3ymNJHJFDz pic.twitter.com/luC8xgDoRj— The Lagos State Govt (@followlasg) March 3, 2021
