Online retailer Jumia Technologies — known as “the Amazon of Africa” — announced that it would no longer provide its eCommerce platform activities in Cameroon, which has been embroiled in a two-year separatist uprising.
The company called the African state “not suitable” for the platform, but added that it would continue supporting buyers and vendors in Cameroon via its classified portal Jumia Deals.
“We came to the conclusion that our transactional portal as it is run today is not suitable to the current context in Cameroon,” Jumia said in a statement, according to Reuters.
The company has seen its shares fall from its Wall Street debut price of $14.50 in April, and it recently missed revenue estimates for the second time in three quarters. Jumia operates in 14 African countries, with brands that encompass travel booking service Jumia Flights, online takeout service Jumia Food and classified services Jumia Deals.
One source at the company in Cameroon said Jumia had chosen to prioritize growth over profitability.
“We wanted to see how business evolved. We can come back, but for now we’re closing (to have) time to study the market,” the anonymous source told Reuters.
Despite its hardships, analysts said back in May that they were optimistic about Jumia’s future. While eCommerce penetration is approximately 20 percent for China, it is reportedly much lower in Africa at only roughly 0.5 percent in the region.
Raymond James Analyst Aaron Kessler said at the time, “While early, we believe a number of factors should drive strong eCommerce growth in Africa going forward, including a growing middle class, a fast-growing young population more digitally inclined, increasing urbanization, and increasing smartphone adoption.”
As for Cameroon, the International Monetary Fund recently predicted that its economic growth would slow to 3.9 percent this year from 4.1 percent. U.S. President Donald Trump recently revealed that he would end Cameroon’s preferential trade benefits because the government had not handled abuses by the security forces.