MarketForce, the Kenyan B2B e-commerce company, has recently undergone significant changes in its operations across Africa. The company has ceased its activities in three out of its five African markets and is now embarking on the launch of a new social commerce spinout.
MarketForce’s super-app, RejaReja, which facilitates informal retailers, such as mom-and-pop stores, in ordering fast-moving consumer goods (FMCGs) directly from distributors and manufacturers, as well as accessing financing, will now be available exclusively in Uganda. This offering has been discontinued in Kenya, Nigeria, Rwanda, and Tanzania. However, Kenya will continue to serve as the company’s headquarters and as the launchpad for Chpter, a social commerce spinout that MarketForce is developing to help merchants convert social media interactions into sales.
MarketForce’s shift in direction began last year when some venture capitalists withdrew their Series A funding commitments, prompting the company to downsize its operations and implement multiple rounds of layoffs. The financial constraints occurred within the context of a challenging global venture capital landscape, making it harder to secure funding.
Tesh Mbaabu, who will serve as both co-founder and CEO of MarketForce and Chpter, stated that the company is now focused on building a profitable business by catering to areas with strong demand density while discontinuing unprofitable routes. However, due to the capital-intensive nature of their asset-heavy model and mounting liabilities, the decision was made to exit the three markets.
Mbaabu explained, “After we decided to move towards a path to profitability, Uganda has been our best performing market. 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.”
In light of these changes, Dennis Nyunyuzi, the Uganda country manager, has been promoted to the role of managing director and will oversee RejaReja’s operations.
The RejaReja retail marketplace was introduced in 2020 as a brainchild of MarketForce, serving formal markets with a software-as-a-service (SaaS) product. It allows informal traders, including mom-and-pop shops, to place orders directly with manufacturers and distributors for next-day delivery and offers access to financing based on their transaction history. The company aimed to address challenges faced by these retailers, such as stockouts, income instability, and a lack of financing to expand their businesses.
MarketForce initially planned to tap into the informal retail sector, which represents approximately 80% of household trade in sub-Saharan Africa. However, the company has had to scale down its operations due to low margins in markets like Kenya and Nigeria, which are expensive to serve and characterized by intense competition. In response, MarketForce is transitioning towards more profitable and high-margin segments, leading to the development of a social commerce platform.
