Jumia closes down business in Tanzania.
As of November 27, Jumia announced to have made a difficult decision to cease its operations in Tanzania.
The Africa’s e-commerce giant has just decided to pull out from the 23 million internet users in the country. A statement from the company revealed that the retailer has decided to focus on operations in other countries where they can bring the best value and help Jumia thrive.
Business Insider reported that Jumia’s decisions have come at a time where the company is suffering terrible losses.
Does this suggest the difficulty in doing online business in the country?
Or it’s just Jumia’s failed business model? Because it is reported that the retailer has also closed down business in Cameroon.
We would say both. Yes, Tanzania is a difficult place for a business to go digital but also Jumia’s failed business strategy may be the reason.
Here are the reasons why;
Despite the growing number of internet users in Tanzania, the majority of them are not well equipped with online experience. Especially when it comes to shopping online.
It is hard to go digital in a community where people can barely tell the difference between Sign In and Sign Up. We are still keeping up with digital literacy in bongo!
We have talked to some of our friends and they admitted that they would rather visit the shop instead of buying online even when the shop provides free delivery services. They feel uncomfortable with filling forms and payment methods.
On the other hand, Jumia hasn’t really earned the human connection here. We doubt if they have any moving story to tell.
As we all know, big brands like Nike don’t pitch about their services or products, they just tell stories that unite people. This is something Jumia didn’t do quite well. They failed to humanize the brand. The Instagram account for Jumia in Tanzania is full of promotional content. We believe it could not cost them much to post testimonial videos from people who have bought products from the platform. Or featuring stories from vendors benefiting with selling on Jumia – just being creative.
The rule of thumb for running business in 2020 is not about advertising and branding, it is about focusing on building a great customer experience.
-Tanzlite
It is so unfortunate that digital platforms which are meant to connect businesses with customers can also work against them. Building trust with your customer goes beyond promotional content, it is about creating content that build trust with your customer.
Are you facing any familiar challenges with running your business in the digital world? Let’s have a conversation.
Shukuru is doing a wonderful job, I so his article about Jumia business and its closing stress in Tanzania, I really appreciate and I’m confident that Shukuru is heading far and we need all young business minded and professionals to add value to what we do and our business. I’m happy to see youth doing great. Cheers
Thank you Mr Zakayo, It is in our best interest to make sure businesses have good strategies to thrive in the digitally disrupted market.
From what i have read from ur article abt jumia its true that jumia have failed to run their business online due to the fact most of we Tanzanians are not so much familiar with online marketing due to several believes. Same applies to cameroon. This situation is going to worse to most companies as i believe jumia have just started and many more companie are on the same chain.
The single most problem with us Tanzanians is reluctance in keeping pace with the changing world, which is now digital.I’m not so well informed about Cameroon , but I guess the same reason may be the cause .
Hello. Useful article!
Thank you Safari, you are welcome for more useful updates
The first issue is knowledge. Once we as Tanzanian’s learn to differentiate the various facets of online business, we will thrive. In this industry, there are online classifieds and e-commerce. One is not the other. A misunderstanding of the two creates a mistrust.
The second issue is infrastructure. Our physical address system is not designed to favor e-commerce. We are slowly starting to name our streets and assign numbers to our residences. We’ll get there.
The third issue is personal identification and a financial structure to support online payment. These are currently being solved by the biometric simcard registrations. Kudos to the GoT for that. Thuis will improve the “trust” factor of e-commerce.
I’ll wrap up with these two very relevant Swahili adages.
“mvumilivu hula mbivu”
“mambo mazuri hayataki haraka”
Well said, Very useful article