Why Jumia Rwanda closed its online shopping platform

Jumia Rwanda recently closed its online shopping platform Jumia Market place to concentrate on its fast growing online food delivery platform. Jumia marketplace operated on a business to consumer online retail model.
Processing orders in a Jumia warehouse. (Net photo)
Processing orders in a Jumia warehouse. (Net photo)

Jumia Rwanda recently closed its online shopping platform Jumia Market place to concentrate on its fast growing online food delivery platform.

Jumia marketplace operated on a business to consumer online retail model.

The platform enabled clients to review through product’s options, pay via cash or cashless options and have the products delivered at their doorsteps.

However, the platform was closed late last year as the firm says that they are strategising on a new approach for the e-commerce platform.

Among the factors that led to the closure of the platform was the reception and uptake by clients largely due to the nature of products sold.

 Albert Munyabugingo, the Managing Director of Jumia Food told The New Times that they closed it to understand the local market better before re-launching.

 “Jumia marketplace is closed in Rwanda at the moment, we moved from business to consumer model and now we are at customer to customer model where we have a sister company called Jumia Deals. We are yet to launch it in the Rwandan market, we are still studying the market to see the trends,” he said.

 Among the factors that led to the closure was the quality of products on the platform in comparison to those offered on competing international e-commerce platforms such as E-bay.

 With most of the shops that had been accredited to the platform selling imported products such as electronics and garments, a section of clients found it cheaper to import from cheaper markets abroad.

“At the moment, people can buy from E-bay and have the products delivered. Most people questioned why they should use local shops which are selling products that are also imported. If it’s a phone, one can import from abroad,” he explains.

 Quality of products on the platform also proved to be an issue further reducing appeal of the platform.

“Most of the shops would also not look out for quality as much, but now we can see that there is improvement in quality and prices have been adjusted,” Munyabugingo said.

Using the past as a lesson, the firm says that it is studying the market and mulling a new strategy to return to the market this time more sustainably.

Among the opportunities they seek to tap into as they return include the popularity of the Made -in-Rwanda products.

This is an ideal chance as they will reduce heavy reliance on shops that retail imports as was the case in the past.

“Market Place was not as successful as we wanted it to be partly because when we began, the Made-in-Rwanda products had not become as popular. But since last year, there has been effort to develop local products. Going forward, market place is likely to be more successful when it returns to the market,” Munyabugingo explained.

“Before making any kind of decision, we analyse the market thoroughly to understand what is relevant and needed in the market. You cannot supply what people do not need,” he adds.

A few clients who had used the platform prior to its closure told The New Times that they had severally noted inconsistencies between the products advertised and the products delivered.

The exit leaves a number of e-commerce platforms in the market, including Grocerywheels, Kasha, Yubeyi, Pikkostores and Get It among others.

Jumia Foods, the food delivery platform has however been well received in the local market with officials, saying that they have noticed a 20 per cent monthly growth in sales and clients retained.

“On the side of Jumia foods we have been operating for the last 4 years and have seen positive feedback from clients. We have been growing monthly by more than 20 per cent and over 100 per cent, year on year in regards to sales and customer retention,” he explained.

The food delivery platform has also enabled a section of city restaurants to increase their clientele with sales going up by 30 per cent for a section of them.

In the current year and onwards, the firm is looking to grow its partnerships with city restaurants from the current about 80.

The firm is also keen on reducing delivery time, delivery products such as tickets and giving more payment alternatives to clients.

“We have about 80 restaurants which is less than we would like to have because Kigali has over 140 restaurants,” the official said.

“We now have more cashless payment options. We partnered with Ecobank to ensure Mvisa payment and cashless options.  We are looking to acquiring partnerships with more restaurants,” the director said of their plans.  

editorial@newtimes.co.rw