E-COMMERCE

Turbulence in Africa’s e-commerce sector continues, with more layoffs

By our News Team | 2023

Kenya’s Twiga Foods platform reveals more job cuts and another restructuring as turmoil among industry players shows no sign of abating.

The turbulence in the African e-commerce sector continues, with leading Kenyan-based B2B platform, Twiga, announcing restructuring and layoffs last week.

 

Around 280 people – a third of the permanent Twiga workforce – will leave because of what the company calls “strategic operating adjustments to enhance its service delivery capacity”.

E-Commerce

Photo credit: Twiga Foods

It adds in a statement posted on its website that “this has been influenced by the current business environment where people’s purchasing power continues to decline”.

 

Twiga Foods Ltd is a tech-driven fresh food platform that connects suppliers (including farmers) with vendors that supply consumers – mostly in the informal retail sector in Kenya and Uganda.

 

B2C e-commerce platforms have typically been viewed as more vulnerable to the current market ups and downs, but this is not the first time that Twiga has had to retrench staff and restructure. The last time was in June this year, when it let go its internal sales team in favour of using independent contractors.

 

Twiga will, however, continue to operate Twiga Fresh, a food farming and distribution project it launched in May 2022. Twiga Fresh grows onions, tomatoes and watermelons on a 650-hectare farm in Taita Taveta, a county approximately 360km southeast of Nairobi.

 

E-commerce players are struggling to achieve profitability

 

Despite a proliferation of B2B and B2C e-commerce platforms in Africa – often attracting significant foreign investment – the sector has been turbulent and struggling to achieve profitability.

 

“For instance, the NYSE-listed Jumia, which is Africa’s biggest e-commerce platform, is still not profitable since its launch in 2012 despite reports of growth in the African e-commerce scene,” reports the Kenyan news portal, Citizen.Digital.

 

“Trendtype believes Twiga probably will close its operations in Uganda for the same reasons Copia did – trimming costs and focusing on the more competitive and developed market [in] Kenya,” says Trendtype, the London-based emerging markets consultancy.

 

“It is increasingly clear that the cash crunch among grocery buying platforms will have casualties. There are six major buying platforms in Kenya: Twiga, Copia, Wasoko, Marketforce, Omnibiz and social selling app Kapu.

 

“Of those, Marketforce is the most vulnerable because its operations are spread across five countries and it is very unlikely it can cover those costs in the mid term. 

 

“We also question whether the timing of Omnibiz’s entry in late 2022 will lead to its successful embedding in the Kenyan supply chain, given the crunch.”

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.