Jumia Kenya on Wednesday reported an accumulated loss of $87.8 million to the end of 2021.

The annual loss was $9 million, the highest since the company established operations in the East African country in May 2013.

By way of comparison, the annual loss for 2020 was $6.1 million from the previous year.

The company says it hopes to see recovery from the increasing adoption of online shopping, coupled with the growth of the digital economy in the country.

Jumia is not the only tech company struggling to make profits in Kenya, as seven promising local startups, such as Kune Food, WeFarm, Notify Logistics, Sky Garden, NopeaRide, Sendy, and Wasoko, have had to shut their doors within the past year.

The percentage of penetration of ecommerce market in Africa increased to 31.6 percent in 2022 According to Statista Digital Market Outlook, compared to China which has the highest penetration at 80 percent, thanks to rapid internet adoption across the Asian country.

There are several reasons for the low rate of adoption and penetration of e-commerce and online shopping in Kenya.

Among them are: highly fragmented markets, the high cost of delivering items, and the lack of a clear physical address system, which acts as a barrier for last-mile deliveries.

During the year, Jumia rated household goods, such as maize flour, cooking oil and sugar, as well as make-up products, as items ordered most frequently. Beauty products accounted for 57% of the total number of goods sold through the online platform by value, an increase from 44% in 2020.

In the same period (2021), electronics and phone orders dropped to 43% from a high of 56% the previous year as the COVID-19 pandemic restricted consumers from purchasing basic items.

Meanwhile, Jumia Kenya named Charles Ballard as its new CEO, charging him with leading business development and transformation in the country.

Ballard joined the company in 2019 as the head of performance and planning before being promoted to the post of chief operating officer in 2021. 

He’s the third CEO in less than two years, having replaced Juan Seco who is leaving to join pan-African payment firm Mukuru. 

Seco was appointed CEO of Jumia Kenya in July 2022, having taken over from Betty Mwangi, who had been the CEO since November 2021.

Ballard says he will focus his attention on the rural market. “I’m excited to continue driving the ecommerce narrative in rural Kenya, where more than 70% of the population lives.

“Access to modern retail is a challenge in these areas, which is a great opportunity to grow our online marketplace. Ecommerce can bring better prices, more choice and convenience to the rural Kenyans,” Ballard said.