Jumia Technologies, online retailer has suspended its e-commerce business in Cameroon, casting doubts over its future in Nigeria, barely a week after its latest earnings call showed yet more losses.
Weetracker.com reported that the development may be linked to an attempt by the Rocket Internet-backed company to arrest the cash deluge that has seen the company’s losses rise to nearly a USD 1 Bn since kicking of operations in 2012.
But in a statement on Monday, Jumia announced that its transactional portal was “not suitable to the current context” in Cameroon.
Jumia has been bleeding cash in its attempt to simultaneously grow several verticals in up to 14 African markets.
Needless to say that the company is yet to turn a profit and the forecasted profitability date of 2022 now seems far-fetched.
In Nigeria, apprehensive merchants wait for assurances and security from the company.
Analysts said that the closure of Cameroun operations may have a spillover effect on Nigeria given the contagion of the two countries.
Jumia Technologies, though backed by hundreds of millions of dollars in VC, an ill-fated IPO on the New York Stock Exchange from earlier this year hasn’t helped matters.
The Africa-focused e-commerce company has since lost its unicorn status and its share price is in their single digits.
Last week’s earnings call suggested that Jumia is indeed weighing up the idea of giving up its “Amazon-of-Africa dream” in favour of a “PayPal-of-Africa play”.
Jumia’s mounting losses mean that it’s become imperative to cut costs lest the company runs out of cash and the closure of its Cameroonian subsidiary suggests the company is now scaling back on its e-commerce business.