MarketForce exits 3 markets: Focuses on Uganda and Social Commerce Spinout

In a significant shift, Kenyan B2B e-commerce firm MarketForce has halted its operations in three of its five African markets. The company, however, remains poised for the introduction of a new social commerce venture.

MarketForce’s flagship application, RejaReja, primarily designed for informal retailers, will no longer cater to Kenya, Nigeria, Rwanda, and Tanzania. Instead, the platform, which facilitates easy ordering of fast-moving consumer goods directly from distributors and offers financial assistance, will continue exclusively in Uganda.

Kenya will not be left out entirely from the company’s roadmap. The nation will act as the operational epicenter for MarketForce and will also be the launching ground for Chpter, a promising social commerce offshoot. Chpter aims to transform merchants’ social media interactions into tangible sales, according to CEO Tesh Mbaabu.

The transition comes in the wake of funding challenges faced by MarketForce. Last year saw venture capitalists retracting their Series A funding pledges, putting the company in a tight spot. It announced the closing of a $40 million Series A round, the largest Series A round of its kind in East and Central Africa. This financial pinch was exacerbated by the broader downturn in global venture capital, which escalated the difficulties of securing funds. Consequently, MarketForce had to significantly reduce its operational footprint and underwent several rounds of staff reductions.

With profitability becoming the prime objective, MarketForce has decided to channelize its efforts and resources more efficiently. A key strategy has been to focus on areas showcasing strong demand density and sidelining unprofitable routes. However, given the company’s capital-heavy structure coupled with increasing financial obligations, the decision to cease operations in three markets became inevitable.

Highlighting Uganda’s significance, Mbaabu mentions, “Uganda has consistently outperformed other markets for us. We have secured exclusive distributorship agreements with four major manufacturers in the country, allowing us to maintain a healthy profit margin.”

With the reshuffle, Dennis Nyunyuzi, formerly Uganda’s country manager, will now oversee the operations of RejaReja as the managing director.

RejaReja, which debuted in 2020, was MarketForce’s solution to cater to the unique needs of informal traders. It offered them the convenience of ordering directly from manufacturers and accessing credit based on their transactional records. The platform was engineered to tackle issues like stock shortages and financial constraints that these retailers often grappled with.

Yet, the ambition of capturing a significant share of Africa’s informal retail sector, accounting for approximately 80% of household commerce in sub-Saharan regions, encountered hurdles. The profit margins in certain territories, especially Kenya and Nigeria, were dwindling due to high operational costs and aggressive competition.

In light of these challenges, MarketForce is revisiting its strategies. “We are now aiming to explore sectors offering higher profitability and margins. This has influenced our decision to transition towards social commerce,” Mbaabu concluded.