Jumia Job Cuts Raise Concerns Over Nigeria’s e-Commerce Market

By Kevin Mwanza Published: October 26, 2015, 7:31 am
Jumia has done well, and it can continue to grow. Photo - Jumia

Reports that Jumia, one of Africa’s fast growing e-commerce platforms, has cut 300 jobs in one of its flagship markets, Nigeria,  raising concern that the online retailer could be shutting down its operation in the West African nation.

According to a TechCabal report, the Rocket Internet funded e-commerce firm was planning to shed as much as 30 percent of its workforce in its Nigerian unit, which has failed to return a profit in the $13 billion market since it began operation there in 2012.

Rocket Internet, which has a significant stake in Jumia, has a reputation of downsizing in other companies it has invested in including closing Kaymu in Zambia and firing 400 workers in Turkey in 2012.

The Nigerian government forecasts that over 80 percent of the country’s 177 million people will be able to access broadband mobile internet by the year 2018, while 20 percent of them will be connected to fixed line high speed internet.

One purportedly laid-off Jumia employee lamented that the company had sent him parking without any notice of the impeding lay-off and only offered two-week pay.

Jumia has over 3,000 employees in 13 African countries it operates in and has grown at double digit since its launch.

Other e-commerce platforms that have made headway in sub-Saharan Africa include Konga, Cheki and OLX.

In Nigeria, online retail platforms transact as much as 15,000 transactions per day, up from just 1,000 in 2012, with a value estimated at anything from $35 million on a slow day to $550 million on a boom day.

The sector support over 20,000 jobs and is estimated to have attracted  over $200 million in foreign direct investment since 2012, with the two largest online retailing website, Jumia and Konga, receiving $50 million in the last one year.

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