MarketForce Exits Three Markets, Prepares To Launch Social Commerce Spinout


Kenyan B2B e-commerce company MarketForce has made the decision to shut down operations in three of its African markets and is now focusing on launching a social commerce spinout. The company’s super-app, RejaReja, which allows informal retailers to order consumer goods directly from distributors and access financing, will only be available in Uganda, as MarketForce has discontinued the offering in Kenya, Nigeria, Rwanda, and Tanzania.

Key Takeaway:

MarketForce, a Kenyan B2B e-commerce company, has closed operations in three markets and is focusing on launching a social commerce spinout. The company’s super-app, RejaReja, will only be available in Uganda, while Kenya will remain the company’s headquarters and the launchpad for its new venture, Chpter.

Despite the closures, MarketForce will continue to have its headquarters in Kenya and will also serve as the launchpad for its social commerce spinout called Chpter. MarketForce aims to help merchants “turn conversations on their social media channels into more sales” through this new venture.

Deceleration and Cash Crunch

In the past year, MarketForce has faced challenges as some venture capitalists reneged on their Series A funding commitments. As a result, the company had to scale down operations and conduct multiple rounds of layoffs. The global venture capital downturn has made it difficult for companies like MarketForce to raise funding.

Due to the cash crunch and current market realities, MarketForce has shifted its focus to profitability and is pursuing paths that will enable it to raise funding at lower valuations or seek bridge rounds. The company recently raised $1 million through crowdfunding.

MarketForce’s co-founder and CEO, Tesh Mbaabu, stated that the company is now concentrating its resources on building a profitable business by serving areas with high demand density and shutting down routes that are not profitable. Unfortunately, the company’s asset-heavy model, which is capital intensive, and mounting liabilities left it with no choice but to close operations in the three markets.

Mbaabu explained, “Uganda has been our best performing market after we decided to move towards a path to profitability. We have exclusive distributor contracts with four major manufacturers, and margins are better, enabling us to run a gross profitable operation there; that is why we will keep it active.”

The Future of RejaReja and Managing Director Promotion

RejaReja, MarketForce’s retail marketplace launched in 2020, was initially designed for formal markets and aimed to solve challenges faced by informal traders, such as stockouts, earnings instability, and lack of financing. However, low margins and stiff competition in markets like Kenya and Nigeria have led MarketForce to scale down its operations in these regions.

Dennis Nyunyuzi, the country manager for Uganda, has been promoted to the position of managing director and will be responsible for overseeing RejaReja’s operations.

Mbaabu stated that the company is now exploring more profitable segments and higher-margin opportunities, which is why they decided to enter the field of social commerce.

“We are figuring out more profitable and high-margin segments, and that is why we decided to make a move into social commerce,” said Mbaabu.

Sukhiba’s Expansion into WhatsApp Conversational Commerce

In related news, Sukhiba is eyeing expansion to power WhatsApp conversational commerce in Africa. The company aims to tap into the vast potential of this popular messaging platform to facilitate transactions and enable businesses to engage with customers more effectively.

With the rise of social commerce and the increasing reliance on digital channels for sales and communication, African businesses are looking for innovative solutions like Sukhiba to enhance their operations and reach a wider audience.

While MarketForce faces challenges and undergoes strategic shifts, the launch of Chpter and Sukhiba’s expansion into conversational commerce show that the African e-commerce landscape continues to evolve and adapt to changing market dynamics.

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