Overview
Kenyan B2B e-commerce company MarketForce has announced the shutdown of its operations in three markets across Africa: Kenya, Nigeria, and Rwanda. The move comes as the company refocuses its resources to build a profitable business by delivering high-demand services. MarketForce’s super-app, RejaReja, which enables informal retailers to order fast-moving consumer goods directly from distributors and manufacturers, will no longer be available in these markets.
Background
MarketForce was founded with the goal of solving the challenges faced by informal retailers in Africa. The company launched its super-app, RejaReja, in 2020 as a brainchild of MarketForce, aiming to enable informal traders or mom-and-pop shops to order goods directly from manufacturers and distributors for next-day delivery. The platform also provides access to financing based on the history of their transactions.
Reasons Behind the Shutdown
MarketForce’s decision to shut down its operations in three markets was triggered by a combination of factors, including:
- Funding Challenges: Some venture capitalists reneged on their Series A funding commitments, forcing MarketForce to scale down its operations and conduct multiple rounds of layoffs.
- Global Venture Capital Downturn: The current market realities have made raising funding hard, further exacerbating the challenges faced by MarketForce.
New Focus: Social Commerce
MarketForce is now refocusing its resources on building a profitable business by delivering in areas with strong demand density. The company has launched Chpter, a social commerce spinout that enables merchants to turn conversations on their social media channels into more sales. This new initiative will serve as the launchpad for MarketForce’s expansion into other markets.
Future Plans
While MarketForce has shut down its operations in three markets, it will continue to operate in Uganda, which has been its best-performing market. The company has exclusive distributor contracts with four major manufacturers and is able to run a gross profitable operation there. Dennis Nyunyuzi, the current country manager for Uganda, has been promoted to the position of managing director.
Impact on Informal Retailers
The shutdown of MarketForce’s operations in three markets will undoubtedly affect informal retailers in these regions. The company’s super-app, RejaReja, provided an essential service to these traders, enabling them to access fast-moving consumer goods directly from manufacturers and distributors.
Key Statistics
- 80% of household trade in sub-Saharan Africa is accounted for by the informal retail sector.
- MarketForce has exclusive distributor contracts with four major manufacturers in Uganda.
- The company’s gross profit margins are better in Uganda, allowing it to operate profitably there.
Conclusion
MarketForce’s decision to shut down its operations in three markets highlights the challenges faced by B2B e-commerce companies in Africa. Despite these setbacks, the company remains committed to building a profitable business and expanding into new markets through its social commerce initiative, Chpter.
