On Monday, Jumia Food announced that it plans to close down its Rwanda operation.
In a statement, the firm stated that they had to consolidate their resources to areas and markets that are profitable for their business.
“We have made the difficult decision to suspend our on-demand services in Rwanda effective December 9, 2019,” Reuters quoted Jumia.
According to the New Times, Albert Munyabugingo, the company’s Managing Director for Rwanda, Jumia wants to refocus its business.
The statement is reminiscent of what the firm stated while exiting Cameroon and Tanzania markets.
The company said they needed to reduce their running costs to be more effective as an organization.
Jumia has been selling their own stock and taking commissions off third party transactions done on their website.
This however does not seem to work as the company did not meet the revenue estimates it had set for three quarters in a row by December.
Uneven markets in the content are not making operations any easier for them as they are shutting down their operations in smaller markets.
Their shares as of Monday were trading at $5.76 (Ksh. 584) a 1.5% drop in the share price.
How the fall began
Jumia which listed at the New York Securities Exchange (NYSE) Bagan experiencing problems after a damning Citron Research report which stated that they had failed to state that 41% of their orders were either returned, not delivered or cancelled. This led them to be slapped with a class-action lawsuit over the IPO.
Jumia also has let go some Kenyans employees in a bid to reduce costs.
In a statement, the company on Tuesday said it had authorized some headcount reductions across all geographies.
“After careful consideration, we have made the difficult decision to undergo some headcount reductions across our business verticals and geographies,” Jumia’s local office said in a statement.
Question that now lingers on the mouths of employees and business managers is ‘will the Kenyana unit survive?’.
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